Airbnb investors jolted

WESTERN BUREAU:

A travel ban on incoming passengers triggered by the COVID-19 pandemic has dealt a thunderous blow to Airbnb home-sharing investors locally, real-estate tycoon Angella Whitter has said.

The international real estate agency market has projected a decline from US$913.3 billion in 2019 to US$908.9 billion in 2020 at a compound annual growth rate of minus 0.5 per cent.

There are also projections that the market is expected to bounce back with a growth of seven per cent from 2021, with an expected increase to approximately US$1.2 billion in 2023.

“The Airbnbs, which took the market to a different level in the past two years, are being affected very badly,” said Whitter, chief executive officer of the Whitter Group, an influential Montego Bay business leader.

“Persons who bought those properties for that particular business are now not having any businesses at all.”

Whitter, who owns Whitter Village and several prime real estate properties along the north coast, said that many Airbnb investors have now been left with hefty mortgages and no guests in sight.

“It’s really a challenging time. COVID-19 has affected the real estate industry severely, and investors have taken a big blow,” Whitter told The Gleaner.

FINANCIAL FALLOUT

The tourism sector, which is Jamaica’s second-largest earner of foreign exchange, is expected to haemorrhage approximately J$76 billion, but those losses could soar. More than 200,000 workers have lost jobs nationwide.

Sheree-Ann Anderson, president of the Homesharing Association of Jamaica, said that Airbnb hosts stand to benefit from a US$17-million relief fund to help cushion tourism losses.

The Airbnb US$17-million relief fund is set up to give support to member hosts in every country and region, except China, where Airbnb has already launched a dedicated assistance programme.

“This specific fund supports hosts in Jamaica, and those eligible for this programme will receive an invitation from Airbnb by May 15th to apply. Hosts who are eligible will receive this no-strings-attached relief grant of up to US$5,000,” said Anderson.

Brian Chesky, Airbnb’s CEO, said that 25 per cent of its global workforce – or 1,900 employees – will be laid off because of the coronavirus crisis. Airbnb’s worldwide workforce is approximately 7,500.