(HostWell CEO and Founder Keith Freedman shares his thoughts on the state’s recent suspension of the CDC’s Covid 19 restrictions.)

California has officially reopened so, what does this mean for hosts? There are still Covid related health orders in effect for the state, and many cities have additional precautions that continue. The cities serviced by HostWell in California are all open for business.

Before June 15th, “hosted” short-term rentals, hosting in a part of the residence which the host was residing in another part of the residence, were not allowed under the State Health Order.  That health order is no longer in effect.  In addition, the remaining health orders recommend mask-wearing in shared spaces, but they are not required.  Still, it is a good idea to check your local City and County to see if they have additional restrictions that remain.

Does this mean you will get more business now that California is open?

In major cities like San Francisco, a good portion of the short-term rental guests were business travelers.  And business travel is not expected to rebound until 2022. However, many workers are experiencing “zoom fatigue” and are finding team cohesion suffering during the pandemic.  While it is unlikely many big corporations will force everyone back to the office (perhaps ever), Keith Freedman, HostWell’s CEO, predicts that this will drive more business travel.  Instead of working together daily, people will be flown in for periodic team-building get-togethers.  These trips may allow businesses to reduce their corporate office space as they rotate in-person groups, but this is good news for those providing accommodations.

In the past, we have seen companies prefer to book several employees into a 3- or 4-bedroom house where they can share transportation, relax, and spend time together outside the office, share meals, and have a more “homey” environment to reside in during their work trip. It is also usually cheaper than four separate hotel rooms while providing much more value and amenities.  In some cases, the short-term rental becomes the team-building venue.

The pandemic has hastened some trends and forced businesses to explore new ways to maintain employee morale and build productivity.  They were already exploring “alternative” lodging, but this trend appears to be accelerating.

While these trends are increasing revenue for hosts, we have another issue we are facing.   Reopening means that hotel room inventory is likely to return to pre-pandemic levels, and many other short-term rentals that were closed (either due to health orders or other factors) will be available as well.  All of this means a lot more inventory and choices for guests. Given the loss of business travel, hosts and hotels will be competing for tourist travelers.  Experts predict there will be an uptick in travel since people are itching to get away after spending 15 months cooped up at home. But there are other factors impacting tourism.

Summer 2021 likely won’t see the return of European tourists either. Last Friday, at a news conference in Paris, U.S. Secretary of State Antony Blinken said offering reciprocity in lifting travel restrictions currently imposed on EU citizens since March 11th, 2020, would be “premature.”

Major US-based airlines are struggling to meet new flyer demand. United Airlines will only be returning to 80% of pre-pandemic capacity in July. If this happens to the entire airline industry, we could have only 80% of the travelers.

We expect Luxury listings that typically appeal to tourists to fare well, and budget listings that appeal to bargain hunters will also stay busy. Still, the mid-range is where we expect to see most of the pressure.

The vacancy, after the long months of revenue loss, may drive people to lower prices.  We encourage hosts to maintain their pre-pandemic pricing strategy. Reducing nightly rates to compete for bargain-hunting travelers typically only negatively impacts reviews and is often more trouble than the revenue is worth.