LSOI_260112_Airbnb Bust.mp3

Intro [00:00:00] A lot of people are saying Airbnb bust. Airbnb bust, it's not what it used to be. No, it's not what it used to be. I agree with them on that point. But what we are seeing as a whole is the industry is professionalizing and people who honestly had no business hosting to begin with are getting squeezed out of the market and I think that's a good thing.

Madeleine Raiford-Holland [00:00:23] Hey there, I'm Madeleine and welcome to The Luxe and The Short of It podcast. I'm a military wife, mom, and entrepreneur that went from a stressed out nine-to-fiver to now a present-minded seven-figure business owner and investor, all through the power of short-term rentals. Here we believe the Luxe life means having the time and financial freedom to be present for the moments that matter most. And I'm here to teach you the exact mindset shifts, insider expertise, and business strategy to make that a reality for you today. So are you ready to actively create the life you want? I'm Madeleine and this is The Luxe and The Short of It podcast.

[00:01:05] Welcome to 2026, my friends. We have made it. I hope you all had a lovely holiday season and are ready to crush it this year. Today on this episode, I am going to answer one of the burning questions that many of you have. Well, maybe not many of your guys because I think you're probably entrenched in the short-term rental space. But a lot of people who are on the fringe have been asking me this question. When I've guested on other podcasts, it's always presented as like this gotcha moment. But knowing me, I got them typically when I answer this question, but the question is, is the short term rental market actually saturated? Is there an Airbnb bust happening? What is the status of the whole thing in 2026? I'm going to give you my take on it because it's probably not what you're hearing most of the places because a lot of the people out there-- and this is just a cautionary tale for anything, is examine what they have to gain from the conversation. And that goes for me as well here. I am a short-term rental operator. I'm a property manager. I also run a short-term rental coaching business. So I do have my own opinions on this and I do you have something to gain, but I am going to tell you the same things that I'm telling anybody who asks me what's going on in my portfolio and what I'm seeing as a market as a whole. Because people like Pace Morby, BiggerPockets, a lot of people are saying Airbnb bust. Airbnb bust, like it's not what it used to be. No, it's what it used to be. I agree with them on that point. But what we are seeing as a whole is the industry is professionalizing and people who honestly had no business hosting to begin with are getting squeezed out of the market and I think that's a good thing.

[00:03:11] I think it's a really, really good thing. So the challenge with the whole blanket statement of Airbnb bust is people aren't understanding that the macro view of the whole thing. Back in the early 2016, 2017, when this was just becoming a new thing, people could throw any old listing up there. It started as like a couch-surfing situation. You could rent out a room. You could rent a room in your house and make some money. You can put literally anything up because it was countering the hotel situation. People were not having to put a lot of effort into it. And so that's what I mean when the industry is professionalizing. The early adopters came in, they made their quick money without a lot of effort because they were new. And then more and more people started coming into it. And then there was COVID when demand was just off the charts because nobody was having to come into the office and people were just traveling, wanting to be remote. It was a different, different time. And so, interest rates were low, investors started flooding the market because you could get money pretty cheap and get into the short-term rental space where these people may not have understood what it really took to be a quality host. And they saw cheap money, I can get a vacation house, somebody else will pay for it. The demand was there, cheap, money, they're just flooding, flooding, flooding. And now what we're seeing that we're people getting into balloon type loans, where interest rates are going up.

[00:04:55] One, they didn't really have any desire to be a short-term rental host. But now, in the current climate of things, and since demand has dropped some since COVID, the demand coming down is the normalizing of the market. It's not necessarily a big drop, it was just artificially inflated by COVID, and so demand is coming back to a normal range. But the people who were half-assing it, if you will, half-assing it is no longer cutting it. It doesn't mean the entire business model; the entire industry is crashing. It just means that we're normalizing from the COVID demand and the industry is professionalizing. So the people who are treating it like hobby hosting, they're not doing as well because they shouldn't be doing as well because they're not treating it like a business. So that's actually really, really, really good news for the rest of us who are putting forth an extremely high quality product, who are treating this like a business, who owns their own book of business with a direct booking website, who have all of these different things in place to actually run it like an actual business. Because we are standing out from the pack and we are showing up as professionalized in this industry and not just hobby host, which are the ones that are also giving people the bad name. So here's what I'm seeing the traits of hosts that are successful in the current climate.

[00:06:31] And I want to give you guys this very clear list because you can determine whether or not you fit into that or get yourselves the tools that you need to fit these criteria to continue to be successful in the short-term rental space in 2026. The first thing that I'm noticing of host and operators who are successful in 2026 is they are brand aware, not listing aware. What do I mean by this? I always encourage our mentorship clients to think about property number five, even if they're starting with property number one, meaning having a brand standard. Think about how Weston has their heavenly bed. And so anytime you stay at a Weston property, you know that you can expect the duvet cover, the certain type of sheets, all of the things. A Four Seasons, St. Regis, think of any of the bigger brands. You choose to stay with them because you know what to expect. There are very little variables. I have the exact same things at my properties and I've talked about it many times before, but we have the same organic cotton white sheets. We have a down comforter with a duvet cover over the top of it. Everything is sanitized. Our cleanliness standards are there. We have a fellow kettle, which is an electric kettle that coffee lovers love, a Smeg toaster, we have a record player. There are 10 to 12 things in my brand standard that anytime somebody stays at our property, they know that they can expect those things. We have people who call us and say, hey, have you opened a property here yet? Because I only want to stay at your properties. That's the beauty of the brand standard. So when you are starting to think about success moving into the future of the short-term rental space, you become brand aware. Reason being, we can refer to our other properties, like that guest calling to see if I have a location open, because it is the same standard and the same level of quality all the way around.

[00:08:44] The referral business starts coming because of that. The next trait that I'm seeing of operators that are going to be successful moving forward is they are focused on these systems. Systems processes, operations, the automations that make the business run at scale without compromising on quality. This is what ensures that the check-in messages, the communication, all of the things needed to provide a seamless stay happen without your involvement. The third thing that I am noticing is experience-driven, focusing on that elevated guest experience. In order to stand out from the pack, in order to show up as a professional host, you have to become obsessed with the details and the experience that you are providing for your guests and have the systems to deliver on them consistently. The average folks, the people who are not competing on experience and elevated experiences, they're just going to have a race to the bottom on price. At the end of the day, if you are not making money in your saturated market, it's because someone else is. If you have a quote "saturated market" that means the demand is there, you need to take a good hard look at your listing because there's something about it that isn't stacking up against the competition and somebody else is getting the booking. Fourth thing that we are noticing is that you have to be comfortable using AI tools and delegation. You need to get familiar with just beyond the asking chat GPT a general question. In order to leverage your time and the best use of your time and create the best guest experience, you need to be comfortable leveraging AI to do that. If you need help with that, I have an AI bootcamp that we can help you. Cut the learning curve there if you want.

[00:10:56] And then this is a little bit woo-woo, a little bit subjective, but folks that are emotionally regulated, not panic-driven. I shared in our 2025 business audit as well as the 2026 vision casting episode back in December. December 1st, I give you guys a workbook and a tool set to do that. You have to be comfortable looking at your data for what it is. It is information that is going to give you the keys and the tools to combat the quote "market saturation". Take a good hard look at your listing and what that data is telling you and pivot before it becomes a problem. Know how to read the tea leaves my friends, but really the tea leaves are just the data. Know what the numbers are telling you, make adjustments and pivot and move on. People ask me, even with these interest rates, are you seeing people be successful? The answer is absolutely. Because when we are analyzing and underwriting deals with our clients, we want people to win on four things. We want you to win on the equity piece of the property. We want to win on cash flow, absolutely. So that means at the end of the day, after all of your expenses, your mortgage, that includes your interest rates, your taxes, everything at the of the end day, you are still bringing home cash flow. So we are taking into account the interest rates at the seal. So equity, cash flow, appreciation- meaning that your property increases in value over time. And then we want you to win on taxes and depreciation too. So that bonus depreciation and offset that active income with your short-term rental tax loophole like you can't with any other aspect of real estate. But we are noticing and looking at all of these factors and deals in 2026.

[00:12:59] So yes, you have not missed the boat completely. There are plenty of clients, hundreds of clients in 2025, towards the end of 2025, who have closed on deals, who are cash flowing, who are winning on all of those fronts. So it is not too late to get into short-term rentals. You have not missed the boat, but you have to keep those other factors of mind. And you have to get into a short- term rentals because you want to be a real estate investor. This is not a get rich quick scheme. There is absolutely work involved in it, but you have to understand how to leverage the current market and the current environment in order to be successful. Otherwise, you will be caught in an Airbnb bust situation. In my personal portfolio, we are performing better year over year. 2025 was our best year yet. We're crushing it and we're continuing to do better. The cream is rising to the top and those who are in the middle and below are going to be squeezed out of the market. And frankly, I'm kind of okay with that. So really, at the end of the day, guys, what it boils down to is if you are willing to build this as a real business, not a side hustle that you babysit, there has never been a better time to get into it because folks who got into this for the wrong reason are being squeezed out and who aren't willing to put the effort in are getting squeezed out. So if you have the right mindset, the right know-how, the right support, if you need that, you know where to find us. We're ready and you should be ready to dive in with both feet because I have never seen a better time to come in and absolutely crush it in the space. I hope this helps. Happy 2026!

[00:14:50] Hey y'all, if you're loving the show, be sure to hit the follow button or the plus sign on your podcast app to subscribe. This will ensure you don't miss a single episode and I'll see you next week.