a lot of hosts from BNB Formula don't make it they quit often in under a year they cite
various reasons why they don't want to be hosts anymore including Robuilt or uncompromising guests
the rising costs of housekeeping the rising cost of unexpected repairs Airbnb violating their own
terms of service the uncertainty of the industry wild swings in price and occupancy unexpected pets
and pet damages and Airbnb always taking the side of the guest many of these on this list won't ever
go away and although there are many hosts that can handle these brutal Hospitality conditions
there is one straw that always seems to break the super host's back and that's when the juice is no
longer worth the squeeze if you crawl across the internet forums Reddit threads Facebook groups my
YouTube comments you'll see hosts talking about how bookings just dried up some will call it slow
season some will blame the algorithm and some believe that air Bean is retaliating against
them for something that they did as a host and even though at times it could be air Bean be's
overreaching Shadow band no matter how you slice it all of these add up to two things no booking
no money these reasons aren't all preventable but they are all manageable slow season is one
of these unpreventable events regions around the world have different Peaks and valleys of demand
and lack of demand whereas some areas there will only be customers 3 or 4 months of the
year but all around the world in most major cities everyone feels some version of a rise and fall of
demand but host Supply doesn't rise and fall the same way host supply for those of you out of the
know is the number of listings in a market and how host Supply works is much slower moving than
just regular guest demand it takes time to create a listing it takes time to furnish it it costs
money these people are getting into a business in good faith hoping to survive long enough years to
make money they invest good money with optimistic expectations and in a boring American dream style
playout nothing weird would ever happen there's enough customers for everybody and everybody
wins but the many events that cause guests to not spend money happen fast the buyer locks up their
wallet and money just doesn't come it it could just be slow season buyers have spent all their
money in Christmas presents and they just don't have enough money left for travel or it could be
a global pandemic or economic crisis but in all scenarios Airbnb hosts are left holding the bag
scrapping for customers that no longer exist because there's not enough pie left for all of
that Supply there are smart hosts that know their way around the industry enough to survive even
when that happens because short-term rentals is a low barrier to entry business almost anybody could
get in and itn't doesn't take a lot of vision or preparedness to become an Airbnb host it doesn't
take a lot of skill to list a place online what you will find if you search on Airbnb is a lot
of the same philosophy list a property set a price raise your price on weekends give 10% off if they
book by the month and call it smooth sailing what is interesting about slow season in any market
for any supplier of product whether it's Airbnb or turo or hotels or Airlines is people plan to
make money when the getting is good you can have 10 suppliers selling the customers in good season
and they all have a similar strategy when the market falls apart and there's no customers left
all 10 suppliers still hold on to the same strategy hoping to get customers like they
did when the getting was good what's interesting about this and this gets a little bit high level
so hold on as I try to explain this is in peak season when the getting is good everybody was
leaving some customers behind this is a product Market fit problem some customers in peak season
will pay the most money they'll book for 2 days or 3 days just on the weekends and they'll pay
Handover fist money for your BL in peak season there still are customers who would book by the
week or by the month but they have a budget and they can't afford your high-priced weekend place
so those customers tend to not get booked in your property if you were a host running a
peak season strategy but when slow season comes and all the high-paying customers are gone those
budget wielding customers still do exist to some degree and the best and smartest hosts go into
slow season with a strategy that allows them to get weekly or monthly bookings before the other
nine figure it out this my friends is called Game Theory in Revenue management and because very few
people even know the phrase Revenue management that's why you'll see the data shows that people
quitting Airbnb tends to be in the wake of their slow season now this slow season doesn't just have
to be summer winter it could be an economic winter that could last for a year or longer this happened
during covid-19 I was hosting in Philadelphia when Co shut down the Northeast if it wasn't for my
Dallas Fort Worth Houston Austin properties if it wasn't for Texas we would not have had the money
to hold on in Philadelphia by the time there was healthy demand in Philadelphia there just wasn't
a lot of host Supply left so when the demand went up the money was good that summer the money was
so good and this happened again just recently was something we call the airbn bust too many hosts
entered the market and entering into the summer there just wasn't as much money as a normal peak
season would have so these hosts hoping for a good slice of pie found out that there's too
many hosts getting the pie and there wasn't enough money even in peak season and then winter the real
winter came and crushed everybody you'll still see it all over the internet if you scroll back
a year about a year and a half ago I made a video warning hosts that this was going to happen and
if you were a host of the situation the only thing that you could have done was to start running your
property yourself this is another truth of the Airbnb world is there are a lot of passive Real
Estate Investors who will hand off their property to a professional someone like me but what that
does is that costs 25% of Revenue and imagine if you bought a business and gave somebody else 25%
of your Revenue to run that business you could have run it yourself but now you have a passive
business the cost of that passive business is a 25% inefficiency meaning if the market dies
any of your competitors that have a better cost structure than you will make more money than you
they'll survive longer than you so the hosts that died off during the airbn bust were passive Real
Estate Investors with co-hosts and they could not afford the squeeze Airbnb just made another
change that is putting hosts out of business again this year just like last year Brian chesy updated
the algorithm during the winter release this took hosts with great listings full calendars
and put them at the bottom of search causing their calendars to go empty Brian chesy does
this because the airb B algorithm is designed to chase interest and Chase Trends and Airbnb twice
a year updates their priorities inside of the algorithm to push up listings that they think
are going to be new or interesting every listing is capable of making key adjustments to stay at
the top of search but Brian chesky doesn't do a public release on what their new priorities are
so it's hard for you to know what changes to make if you would like to get back to the top
of search by learning how the Airbnb algorithm Works attend my program re algorithm 3 where I
will teach you how the algorithm works and there will be a live webinar where you can ask me your
questions if you miss the webinar you'll get the replay don't worry but join re algorithm
3 now so you have time to ask me your questions back to the video this cycle will repeat itself
there will be booms where the money is good there will be busts where people go out of business and
it is in those down cycles that hosts quit and what happens in those down Cycles well if you
look on Facebook you'll see people selling their Furniture they'll get out of the industry you'll
see a lot of negative sentiment for example here on YouTube people tend to only click on videos
that are negative they outperform positive Airbnb videos by roughly a margin of 3 to one
because host sentiment is negative when things are hard and they just want to validate their
negative experience but that bleeds over to the guest experience and the guests don't get five
star quality those negative hosts stop making money and those negative hosts they go out of
business this creates a beautiful opportunity for people who want to get into the business
people who have not been scorned by slow season people who would like to buy furniture for cheap
and people who start business businesses in times of hardship tend to outperform their competitors
forever that's because the best and most tenacious business owners are bred during hardship there are
hosts that over the past few months especially the ones in my mentorship program who are convincing
landlords to give them 8 weeks or 12 weeks of rent for free because of the softening Rental Mark and
then going to Facebook and finding people selling their Furniture offering monthly payments private
party for that furniture at a slight discount from the price the previous host paid for it so
you have amazingly lightly used furniture that you didn't have to have credit for but you got
private credit from the host who's going out of business and their biggest problem is if
they sold the furniture cash like that they'd have to sell it for half so a host says they'll
give you 85% but I'll take a year to pay you and that other host is like you know what I'd rather
not lose $4,000 on this furniture you have a deal this example of creativity is the reason why some
hosts are not going out of business but it is financially at the dark St that you can expect
any host or any business owner to give up and that's precisely the best time to get started
if you're curious about the numbers and how this industry works I did a video comparing
buying properties or just renting them and the playouts of different Market scenarios
including a Black Swan event where we all just die I walked through those numbers concisely
and clearly in the next video that I think you should watch but thank you for watching this
video I hope I earned your subscribe click and as always I'll see you on the other [Music] side