If anything, in many ways it’s served as something of an accelerator in what to expect in the future from some of the world’s biggest tech companies and certainly has switched the steady decline of some of the high street heavyweights into hyperdrive.
Let’s consider for a second that the British high street, as we understand it today, has been struggling for some time now. COVID-19 didn’t, for example, see off BHS or Debenhams which met their end last year before any of this happened.
In many ways what we’re seeing now is just a sped up conclusion to what was happening anyway. After all, now that the core customer base of many high street businesses have experienced the ease and convenience of online shopping for nearly half the price, who are they expecting to now venture back out into the rain and cold to try clothes on?
Which brings us on to some of the tech giants not just in retail but across the board. Bafflingly, the NASDAQ (the tech stock exchange) in the USA has hit record highs despite one of the deepest recessions in American history.
This has broadly been driven by the likes of Microsoft, Apple, Google, Amazon, Facebook and Tesla which have all seen their share price soar throughout the pandemic thanks to this new hyper-speed transition into the online world.
So then, to another heavyweight that was hit hard but is now learning to adapt to the crisis – Airbnb.
The BBC reported recently that the app-based property rental company has been forced to ban house parties and gatherings to ensure that customers were being COVID-compliant.
Airbnb acknowledged that some of its guests had chosen to “take bar and club behaviour to homes sometimes rented through our platforms”.
Ultimately, this is another footnote in what is proving to be an absolutely disastrous year for the company. In an article for The Guardian, the subject is discussed by Stephen Colman, who was an Airbnb host and ran an Airbnb management business up until last year, who says “the whole industry has fallen through”. The article continues that ‘Many hosts are either pulling out of Airbnb to find cheaper long-term tenants or have been offering “14-day isolation suites”’.
So where does this leave Airbnb in the long term? You have to assume that they’ve got the cash reserves to ride out any immediate issues until a vaccine arrives but the long-term implications for hyper-short rentals could be falling away from underneath them.
The point remains that property remains a very lucrative and stable income stream and where landlords who had previously been earning solid and stable yields from long term tenants there were some who decided it was easier to turn to Airbnb.
Property values have been increasing regardless, so in some ways it makes sense to chase higher short term returns when it means a possible increase in yields but this remains a fairly robust and illustrative example of the frailty and inherent flaws of such a strategy.
The potential for crippling disruption is never far away in this model, as with investment into holiday properties. Bad weather, local disruption, global uncertainty and economic downturns are all a danger to these types of income streams in comparison to landlords who have stuck with strong and stable returns from tenants with demand increasing sharply since the economic downturn.
Ultimately nobody can say for certain what the future holds for Airbnb, but at this moment in time it’s probably safe to say that buy-to-let landlords are in the more enviable position.
Interested in buy-to-let? Take a look through our portoflio of properties and speak to a consultant about your options!