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Going on vacation could become even more expensive in the wake of the coronavirus pandemic.
According to reports, the cost of hotel rooms and Airbnb rentals could double as the travel industry reopens over the following months. Both hotels and Airbnb hosts have been significantly impacted by the spread of COVID-19 and it’s likely they will continue to feel the effects even after lockdown and travel restrictions are lifted.
Hotels will be facing a series of new safety measures post COVID-19, the Telegraph reports. Establishments will need to increase cleaning budgets, install new equipment and possibly leave rooms empty to leave enough space between guests. These steps will come with extra costs, an experts in the travel industry that spoke with the Telegraph believe the costs will be passed along to the customers.
One expert told the news outlet that they expect that some costs could double or even quadruple.
Airbnb rentals could also become harder to find.
Glenn Kelman, CEO of Redfin, a real estate brokerage company, spoke with MarketWatch and explained the current climate for some Airbnb hosts. According to him, they may be looking to liquidate their assets at the moment.
He discussed property owners problems during the coronavirus pandemic, saying, “You could get pretty deep into debt and still have somebody pay your mortgage every month because Airbnb and other travel websites were so good at finding someone to rent it out.”
Pointing out that many Airbnb hosts likely don’t have the same financial reserves that larger hotel chains can access and they may be looking to sell their properties as a way to make some money.
While owners or multiple properties used for Airbnb rentals may be able to apply for forbearance programs, those might not be enough to stave off serious financial consequences, Money.com reports. Carlos Garriga, vice president of research and industry at the Federal Reserve Bank of St. Louis, told the outlet that owners of properties used for Airbnb rentals may have to sell their properties, possibly for below market value.
“There’s going to be a lot of correlated sales in certain areas because there are desirable locations or vacation homes,” he explained. “There could be a massive number of units sold in these areas.”