Cathryn Blum has lived in her San Francisco home in Potrero Hill for nearly three decades. For the last 13 years, she has rented out her spare room on Airbnb to help with the cost of her mortgage, maintenance and property taxes.
But when looking at her calendar for the typically busy summer months this year, Blum is seeing a whole lot of "nerve-wracking blank space." Last year, she had 21 days booked in July and August. This year, she only has three and zero days for those months, respectively.
"It just suddenly dropped off, and that's really not usual," Blum said. "We're collateral damage from the bad press. We support our neighborhoods; we support our neighbors; we support our small businesses. And when we're hurting, they're hurting too."
When she sent out a message to fellow hosts to gauge their experiences, the answers came back nearly uniformly negative. One widespread concern has been that the sustained focus on a negative "doom loop" and issues around crime and public safety has colored the way travelers view the city as a destination.
"Put it this way, if you searched for Barcelona online and all the results were about how it's not doing well, you're probably going to find somewhere else to go," said Airbnb host Keith Freedman.
Freedman is the owner of HostWell, a company that helps manage properties for short-term rental hosts across the Bay Area. He has a simple formula for what determines the two major revenue factors for hospitality businesses.
"Tourism drives occupancy and business travelers drive the price," Freedman said. On both counts, San Francisco is struggling this year.
‘Revenge Travel’ Taps Out
According to data from SFTravel, convention room nights for 2023 are off around 30% compared with 2019. There's also continued consternation around remote work. Office occupancy in San Francisco, according to access card company Kastle, has not budged past 50%.
On the tourism front, international travelers from Asia—who spend more money on average than other visitors—haven’t fully returned.
Perhaps ironically, 2022 was a banner year for most Airbnb hosts. Business essentially matched pre-pandemic numbers or, in some cases, surpassed them. Pent-up demand, colorfully dubbed "revenge travel," helped fill booking calendars, tours and hotels last year. But for short-term rentals, that momentum has not continued.
Based on his numbers, Freedman estimated that pricing for Airbnbs in San Francisco is down about 40% from last year, and occupancy has declined by roughly 20-25%. He's noticed that the properties his company manages out in the Avenues are faring better than locations Downtown, due in part to steeper discounts provided by the city’s hotels.
Travelers have been taking advantage of the situation, shopping around for better deals, waiting until the last minute for bookings and trying to negotiate directly for lower prices.
According to short-term rental data company AirDNA, nights stayed in vacation rentals in San Francisco in May 2023 were down 29% from May 2019.
The depressed state of local Airbnbs have led to some gloating among short-term rental opponents who have blamed platforms like Airbnb and VRBO for worsening the city's housing shortage.
San Francisco, however, has imposed a number of regulations meant to limit the impact of short-term rentals on an already limited housing stock. Hosts in San Francisco are required to register with the city and pay a $550 application fee, and are only allowed to list their primary residence on rental platforms. Short-term rentals are also subject to the same 14% transient occupancy tax as hotels.
Approximately 2,400 hosts are permitted by the city as of June, according to San Francisco's Office of Short-Term Rentals.
Blum said the majority of hosts she knows are much like her: aging homeowners who are using revenue gained from the platform to defray the cost of their mortgage or make a little side rental income.
Linda Litehiser and her husband, Joe, have 13 grandchildren between the two of them. They rent out extra rooms on Airbnb for additional income while keeping space open for traveling family members. But that source of revenue has been limited this year, with no bookings for Memorial Day weekend or the Fourth of July.
"It used to seem like the minute I opened the date, someone would be there to take it," Litehiser said. "That just hasn't been happening this year."
Damage Control
Most of the bookings Litehiser has had this year are from travelers coming from relatively close by or looking to stay close to family living in the city. What's more, Litehiser has found more of her communications with guests centering on vigilance and guarding against property theft.
She highlighted one guest who had a rental car window smashed while parked near Fisherman's Wharf, who actually thanked her because her advice meant that none of their luggage was stolen from the vehicle.
"I'm always saying, 'Be careful where you park, don't do this and don't do that.' And then, of course, the next sentence is 'It's a beautiful city,'" Litehiser said. "I used to make it more of a sentence or two. Now, I really harp on it."
As a resident of San Francisco for more than 50 years, Litehiser has seen the ebb and flow around perceptions of crime in the city, noting periods where home break-ins or violent crime were worse.
"I don't think it's really any worse. It just feels less controllable and more in your face," Litehiser said.
Peter Kwan, a retired law professor, is the co-chair of the Home Sharers Democratic Club, which represents a few hundred short-rental hosts in San Francisco. He says that his message to members is that they have to work a lot harder to get the same reservations as before.
He's advising members to review their rates and make sure they're competitive with other hospitality options and spruce up their listing or offer perks like high-speed internet. Kwan uses a hotel close to his North Beach residence as a benchmark for his own pricing, and has lowered his price 15% accordingly.
"This is sort of a wake-up call for those who have been coasting successfully for quite a few years to think about freshening up what they offer," Kwan said. He also pointed to changes made by Airbnb to increase transparency around costs to avoid concerns about hidden cleaning fees.
To Kwan's point about boosting competitiveness, short-term rental hosts are a new addition to the San Francisco Tourism Improvement District and will start paying fees in January to aid with marketing and promotion efforts for San Francisco as a destination for travelers.
His organization is also supporting lobbying efforts against state Senate Bill 584, a state bill that would add an additional 15% tax on short-term rentals and direct the proceeds toward labor-force housing. Opponents say the fee would disproportionately disadvantage short-term rentals compared with hotels.
Ultimately, Kwan said he's optimistic about a turnaround in San Francisco, perhaps led by AI and supported by the city's plethora of natural gifts, but he admits it may take a bit of time to dig out of the hole.
To hosts like Blum, though, the pace of that timeline could mean the difference between staying in the city that she's called home since 1979.
"I'm house rich and cash poor. Airbnb has been a blessing," Blum said. "I'm not a native, but I am an old-timer in San Francisco. I've been here a lifetime.”