‘My Airbnb income has halved this year’: Why holiday lets are losing business ...Middle East

For the first nine years that Sarah Warne let out her holiday cottage in Norfolk, she was often fully-booked. But over the past few months, demand for her annex, which is attached to her main home, has dropped off a cliff.

Sarah, 60, relies on the cottage for a large part of her income. But this year, she has seen bookings via Airbnb fall by as much as 50 per cent, meaning her earnings have halved.

“The downturn I have seen this year is extreme – it’s been down 50 per cent on last year, and 2024 wasn’t a great year to begin with,” Sarah told The i Paper. “I’ve seen far fewer bookings recently, and any I do get tend to come last minute.

“I’ve had to drop my minimum nights to two, down from four, and I haven’t put my prices up in three years. Even so, December is empty except for Christmas week and this involves three changeovers, which means more costs for me,” she added.

“This is my main income, so without an increase in business I may have to absorb the annex back into my home and close.”

Sarah is one of hundreds of holiday let owners around the country who faced a huge drop-off in business ahead of the festive period, at a time when accommodation is usually fully-booked at top rates.

The i Paper has seen dozens of holiday let owners sharing stories about low numbers of bookings on social media, and have spoken to several who have all experienced the same decline in interest towards the end of this year.

Alistair Lawes, 55, listed his four-bedroom townhouse in the heart of Solihull, Hollyhocks House, on Airbnb last year, and initially business was booming.

But over the past few months, he has seen the number of bookings plummet. Last winter, the home was fully booked over Christmas and New Year, but this year it remained empty.

“I’m suffering a big fall in bookings here in Solihull after a successful first year, and I don’t know how to attract people back – I’m not doing anything differently,” he said.

And Catherine Lane, who operates several holiday lets in Brighton, said she has seen a huge fall in bookings this year.

“I’ve been doing this for a long, long time and I personally have never known such a hostile environment for tourism in the UK,” she said.

“I’ve seen bookings really drop, I’m having to work much harder for them and I’ve had to reduce my prices to the extent that I’m wary about how I’ll afford to keep going.”

Experts say the UK tourism sector has faced rising costs and several policy changes that have forced business owners to put up prices, while increased demand for UK-based holidays since the pandemic has driven prices up further.

But the tourism industry is now facing a “correction”, with holidaymakers put off by higher accommodation costs, as well as concerns around the Autumn Budget, tax rises and the cost of living.

Accommodation prices in the UK have risen by around 7 per cent over the past year, while hotspots like London have seen prices rise by as much as 17 per cent – despite an 11 per cent fall in occupancy, according to data from PriceLabs.

Kate Allen, owner of holiday home letting agency Finest Stays, said: “The industry is facing real headwinds, and [holiday let] owners will inevitably look to agents to bridge the gap. But the answer isn’t a token 2 per cent price rise – it’s securing more bookings at realistic rates.

“This isn’t the correction the [UK hospitality] sector needed, as margins were already tight. The harsh truth is that the people who will lose out are the guests simply trying to enjoy a British holiday.”

The impact of the Autumn Budget

Experts are now warning that new measures targeting tourism in the Budget last November could see accommodation get even more expensive.

For example, the Government announced in the Budget that it would give local mayors the power to introduce overnight visitor levies, branded a “tourism tax”. This would be charged via a visitor’s accommodation bill, pushing up costs.

Wesley Brown, chief operating officer at holiday let franchiser Pass the Keys, said: “This visitor levy decision is the latest in a raft of policy changes that risk making holiday letting far harder to sustain.

“From new licensing rules and city taxes to council tax hikes and minimum night stays, short-term rentals are being burdened with measures that claim to fix housing – but end up penalising tourism and the people who rely on it.”

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He added: “In many towns and cities, visitor taxes simply push up costs for guests, and that includes domestic travellers who already pay their share through existing taxes and local spending.

“In places like Edinburgh and Glasgow, where levies have already been approved, our local managers are stuck between absorbing the extra cost or risking fewer bookings due to higher charges.”

Eddy Leviten, executive director of the Tourism Alliance, added: “Tourism businesses are already at breaking point from higher wage, energy and finance costs.

“Handing mayors the power to impose a new overnight tax risks turning visitors away, including British families trying to afford a short break in the UK.”

Other measures targeting second homeowners in the UK have also driven up holiday let prices include the introduction of the council tax premium on second homes, which has led thousands of Airbnb hosts to switch to business rates to avoid the levy.

However, The i Paper revealed this surge in demand has caused wait times for business rates applications to soar, leaving many holiday let owners stuck paying double council tax bills.

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