STR Data Lab™ by AirDNA

Economic and STR Industry Risks with Bram Gallagher

Sep 7, 2023

Economist Bram Gallagher discusses the potential risks facing the short-term rental industry and the broader economy. Topics include the impact of hurricanes on markets, the challenges of recovery, potential government shutdown, the resumption of student loan repayments, and changing regulations in the industry.

31:40

Episode guests

Bram Gallagher

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Episode notes

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Quick takeaways

Hurricanes can significantly disrupt the short-term rental industry, impacting supply, demand, and recovery times, with climate change contributing to higher insurance costs and potential insurer withdrawal from affected markets.

Government shutdowns can have adverse effects on the short-term rental industry, restricting spending, potentially leading to a more severe recession, and impacting consumer spending, with the resumption of student loan repayments being a contributing factor.

Deep dives

Potential Impact of Hurricanes on Short-Term Rentals

Hurricanes can have a significant impact on the short-term rental industry, affecting both supply and demand. While Hurricane Adelia had a lesser impact compared to previous storms like Hurricane Michael and Ian, the location and severity of the hurricane play a crucial role. Areas with less dense population and development tend to experience less disruption. Recovery times vary by location, with some areas bouncing back quickly while others take several years. Climate change also introduces additional challenges, such as increased insurance costs and potential insurer withdrawal from affected markets.

Introduction

2min

The Impact of Hurricanes on the Short-term Rental Sector

4min

Recovery after a Hurricane

10min

Discussion on the Rolling Recession, Travel Demand, and the Impact of Student Loan Repayments on Consumer Spending

3min

Impact of Economic Strategies on Student Loan Repayment and Short-term Rental Regulations in New York

12min

In this week's episode, Jamie sits down with Bram Gallagher, a fellow economist here at AirDNA. With nearly a decade of experience as a travel economist, Bram helps us navigate the potential challenges facing both our industry and the broader economy as we move into the latter half of the year.

Hurricane season is upon us, and we delve into how these natural disasters have historically impacted markets, as well as their current effects. Bram notes that while these events can be highly localized, the ongoing impact of climate change is making recovery in certain areas more prolonged. This has led to increased hesitancy to invest or visit affected regions, and has also driven up insurance costs.

Another looming challenge is the potential government shutdown at the end of the month. At the time of recording, there's no budget agreement in sight, which could create a host of issues if not resolved. Additionally, the resumption of student loan repayments could put a damper on travel spending, with average monthly payments hovering around $300 for those who need to settle these debts.

Lastly, we touch on the ever-changing regulations in our industry. Most notably, Airbnb listings in New York will no longer be available for stays shorter than 30 days, a change that could significantly impact hosts and the local tourism economy.

While risks are inherent in any economy or industry, Jamie and Bram believe these challenges could be relatively minor and that the overall landscape remains robust.

You don't want to miss this episode!

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