Albuquerque’s Airbnb industry approaching saturation point

Airbnb has been connecting hosts and traveling guests since its creation in 2008, while also assisting in tourism growth in cities across the world.  But while the Airbnb market in Albuquerque and New Mexico has been rapidly growing for the past few years, new data suggest the Albuquerque market is on its way to becoming saturated.

According to market watcher AirDNA, the Airbnb market in Albuquerque grew about 30 percent last year (listings for entire homes). However, the total revenue per listing increased by about 15 percent.

AirDNA said this suggests a saturation in the market and they predict growth will slow down in Albuquerque soon.

Promotional materials from Airbnb give no hint of over-competition ahead. On the contrast, in an article from Airbnb Citizen, Airbnb said that New Mexicans “increasingly embrace the home sharing platform as an opportunity to earn meaningful extra income and make ends meet.”

According to Airbnb, Bernalillo county was second to only Santa Fe county in terms of largest market in the state. The data shows Bernalillo county, where Albuquerque is located, had nearly 95,000 guests staying in an Airbnb in 2018, only slightly lower than Santa Fe’s 99,000 guests.

There is a large difference between the counties in total host income, a gap of about $7 million, indicting that rentals in Santa Fe are more expensive than in Albuquerque.

Loves the Idea, but not the return

Airbnb host, Mallory Reviere, said she has been renting two of her properties out on Airbnb for around two years now.

Reviere said the income is similar when she compared leasing the home at a monthly rate on her own, versus as a short-term rental through Airbnb.

“I would say, personally…  it’s not a money maker,” Reviere said. “We don’t really make any more money when we do it than maybe just renting it monthly.”

That doesn’t mean Reviere is down on the Airbnb concept.

“The experience overall has been really positive,” Reviere said. “(As a guest) you kind of have to have an element of adventure and openness to do it, but I think a lot of times, once people actually try it, they feel pretty comfortable doing it.”

Both of Reviere’s properties are two-bedroom, one-bath homes near the University of New Mexico. Casa Elise is currently listed at $80 a night Casa Frontier is currently listed at $86 a night. She said her properties aren’t occupied 100 percent of the time.

“I’d say it’s over half, over 50 percent,” Reviere said. “Maybe three weeks out of the month.”

Reviere said visitors are a reflection of the Albuquerque tourism industry. She said her guests are attracted to the Balloon Fiesta, New Mexico State Fair, even visitors of UNM Hospital.

“I personally love the whole idea of Airbnb,” Reviere said. “I think about the people who are coming. They put a little blurb about maybe why they’re coming, I just think its really a neat thing to see what brings people here to Albuquerque.”

In comparison to an average cost of 15 hotels in the same area with the same bed and bath count, the Airbnb is the cheaper option. The average price for a two bed, one bathroom hotel room in the same area costs around $92 a night.

One of the common arguments against the use of Airbnb’s is that it takes money away from the hotel and motel industries. However, this is not the case according to the data.

Total Airbnb occupancy was consistently about four percent lower than hotel occupancy last year, according to data from AirDNA. A report from the New Mexico tourism department also showed an increase hotel revenue last year as a result of higher rates and increased  occupancy.

“Statewide data indicates that Airbnb and its host community appear to be complementing — rather than competing with — the New Mexico hotel industry,” according to Airbnb Citizen.

Although Airbnb has not had an effect on the hotel industry, Albuquerque City Council still wants to regulate Airbnb and other short term rentals for various reasons.

Regulation of Short-Term Rentals

Last year, the Albuquerque City Council unanimously approved a taskforce that would recommend ways to regulate short-term rentals in the city.

Albuquerque already has a lodger’s tax in place which also applies to Airbnb and other short-term rental owners. The total amount of money the city received in lodgers tax increased almost 6 percent from fiscal year 2017-2018 according to the City of Albuquerque.

“We certainly do it with a lot of other service industries for safety reasons and other…reasons including casting a good light on their experience here in Albuquerque” said City Councilor, Dianne Gibson.

Gibson is the councilor who sponsored the legislation which created the taskforce.

The task force was given a March 1 deadline, but Gibson said that it would give it’s recommendations to the city council at a later date.

“I’m absolutely fine extending that,” Gibson said. “Sometimes when you start on a project and turns out that there are things you wanna look at that you had not discovered.”

The task force was a reaction to the rising growth of the short-term rental industry in Albuquerque and because there had been complaints with safety, nuisance and compatibility with short-term rentals.  

The task force is comprised of public officials, community members, representatives from relevant industries, according the City of Albuquerque website.

Gibson said she did not know what specific policies they could recommend to city council.

“I don’t go to their meetings,” Gibson said. “So, I really don’t know [what specific policies they would recommend]. I don’t think they know.”

Reviere said that the proposed regulations on short-term rentals in Albuquerque by Councilwoman Gibson would not impact her decision to rent her homes though the site. She went as far to say that she is in support of regulating the industry.

“If there was ever like a open forum, a public forum to go and speak in favor or not, I would love to go and speak in favor from the point of view of I think it’s really good for the city and even the state,” Reviere said.

Despite Reviere’s support for the regulations, she said she is considering removing her properties off the popular hospitality site.

“We end up putting a lot of work in it so we’re really sort of considering, now after two years, not doing it anymore,” Reviere said.

Shayla Cunico and Makayla Grijalva can be contacted on Twitter @ShaylaCunico and @MakaylaEliboria.