November has been an unusually busy month for the vacation rental industry—no reassurances that “we’ll revisit it next year” here.
Instead, we’re seeing new proposed legislation at both the local and national levels, conforming loan limits, and updates from Airbnb.
Curious? Pour yourself some coffee—it’s time to review the biggest industry updates from the past month.
Could short-term rentals solve Maui’s housing crisis?
That’s what Maui County Mayor Richard Bissen is hoping.
On November 28, Bissen proposed a new bill that would incentivize short-term rental owners to offer their units as temporary housing for displaced local residents. Housing insecurity continues to be an issue for victims of the August 8th wildfire—one that Bissen believes warrants a “shared sacrifice.”
The proposed bill would exempt short-term vacation rental owners from paying real property taxes from February 20, 2024 through June 30, 2025 if they rent to displaced residents.
What this means for Maui’s vacation rental hosts
The Maui County Council will hear the proposed bill at a meeting on December 5th, and it will go into effect on January 1st if approved.
If you own one of the 12,000-14,000 short-term rentals in Maui County, the bill will give you two choices:
- Make your unit available to displaced residents and receive the tax waiver.
- Or, if you choose not to participate and have a short-term rental property valued at over a million dollars, contribute more in taxes to make up for the loss of tax revenue.
The FTC’s quest for fee transparency
The Federal Trade Commission (FTC) has proposed a new “Trade Regulation Rule on Unfair or Deceptive Fees” that would apply to various industries, including hotels and short-term rentals.
The justification for their proposal comes down to time and cost savings. According to the FTC, something as simple as more transparent fees could save U.S. travelers who use hotels and short-term rentals $1 billion per year.
The hefty document calculates savings for each specific industry and then proposes new regulations to promote fee transparency.
Do I need to update my fees?
First, keep in mind that this is only a proposal. The FTC is welcoming public comment through January 8th, at which point they’ll decide whether or not to move forward.
If the rule does pass, it’s true that hosts will have new regulations to comply with when it comes to fee transparency. But this boils down to ensuring that you’re not hiding or miscommunicating any fees in your listings—and that’s certainly a benefit for hosts and guests alike.
For the time being, this is a good reminder to revisit your listings and check your fees. Ask yourself, is the price advertised the price that guests end up paying?
New loan limits from Fannie Mae and Freddie Mac
The Federal Housing Finance Agency (FHFA) has announced that the baseline conforming loan limit for Fannie Mae and Freddie Mac-backed mortgages will increase from $726,200 to $766,550 in 2024.
This increase is welcome news to anyone looking to purchase a short-term rental property in the new year. It will now be that much easier to secure financing for higher-end properties without having to meet the more stringent requirements for jumbo loans.
And if you’re wondering why the increase is so much lower than last year, it comes down to home prices.
Home prices were higher in 2022 thanks to lower mortgage rates, so the FHFA increased loan limits by over 12% in 2023. Prices only increased by about 5.5% between 2022 and 2023, though, prompting a loan limit increase of the same amount.
Airbnb’s 2023 Winter Release
November 8th brought Airbnb’s much-anticipated semi-annual product release, packed with new features aimed at improving the user experience.
The new features in the 2023 Winter Release are of special interest to hosts. We explain all of the updates in detail in a separate blog, but for now, here are a few quick highlights:
- Listings tab: A new Listings tab makes it easier than ever for hosts to manage their listings. Easily add amenities and edit descriptions in the Your Space section, and control what guests see in the Arrival Guide section.
- AI photo tool: Airbnb’s custom AI tool can now organize all your photos into a room-by-room tour to more accurately represent your space to guests.
- Smart lock integration: You can now connect your Airbnb app directly to your smart lock account to seamlessly generate and communicate unique codes to your guests.
How the release affects Airbnb hosts
The good news is that these updates don’t require any immediate action on hosts’ part. In fact, they’re designed to make it easier for you to manage your listings while also enhancing the user experience for guests.
That being said, you have to actually use the new features to take advantage of their benefits! That starts with understanding what they are and how to make the most of them, so head over to our review of the release for full details and tips.
Airbnb’s latest acquisition
And that’s not all that’s been going on with Airbnb. Less than a week after releasing its winter product updates, the company announced that it has acquired AI company GamePlanner.AI.
Not much is known about GamePlanner.AI, a stealth startup that has been quietly developing its technology since 2020. However, Airbnb’s purchase of the startup is telling about where it plans to go as a company.
AI will rapidly alter our world more than any other technology in our lifetime, but we need to ensure that it augments humanity in a positive way. Airbnb is one of the more humanistic companies in technology, and I believe that, together with [the GamePlanner.AI team], we can develop some of the best interfaces and practical applications for AI.
For now, Airbnb simply says that the GamePlanner.AI team “will focus on accelerating select AI projects and integrating their tools into [the Airbnb] platform.” In the meantime, we’ll be (impatiently) awaiting more news.
2023 holiday booking trends revealed
November also saw the release of Lodgify’s latest industry report. This latest release focuses on 2023 holiday booking trends, analyzing reservations made for the period between December 23rd and January 2nd.
The report is packed full of interesting insights that point toward one major pattern for the season: budget traveling.
For example: average daily rates (ADR) for the 2023 holiday season have decreased by 2% since 2022, yet average trip length is still down by over 9%.
But don’t worry—there are also important takeaways that hosts can take advantage of to increase longer stays and direct bookings. Head over to the report to see all of the findings.
Until next time!
As you can see, the vacation rental industry is truly the industry that doesn’t sleep.
We look forward to seeing what happens with the proposals from Maui County and the FTC, as well as Airbnb’s new acquisition. And don’t forget to check out Airbnb’s new product features as you prepare your vacation rentals for holiday guests!
