Airbnb bookings have declined over the past year in cities like Austin and San Francisco that have historically been popular destinations for short-term rentals, prompting concern over the economic uncertainty wracking urban areas and the prospect of a “doom loop” developing.

Nick Gerli, the CEO of Austin-based Reventure Consulting, recently tweeted that the “Airbnb collapse is real” and that, “Revenues are down nearly 50 percent in cities like Phoenix and Austin.”

He went on to say, “Watch out for a wave of forced selling from Airbnb owners later this year in the areas hardest hit by the revenue collapse.”

Gerli cited AllTheRooms data which showed a 48.6% year-over-year decline in the average revenue per available listing in the three-month period ending in May for the Austin metropolitan area. 

He attributed the decline to the end of pandemic-era migration, tweeting: “The pandemic is over. Fewer people are working from home / vacationing in states like Montana, Texas, and Tennessee. So the demand is way down. Just as the Airbnb supply went way up. So you get a crash.”

An Airbnb spokesperson told FOX Business, “The data is not consistent with our own data. As we said during our Q1 earnings, more guests are traveling on Airbnb than ever before, with Nights and Experiences Booked growing 19% in Q1 2023 compared to a year ago.”

Jamie Lane, the chief economist and SVP of analytics at AirDNA, also pushed back on the notion of a major decline in short-term rentals.

Lane tweeted an analysis using AirDNA data of the same metro areas covered in Gerlis analysis which found an average decline of 3.6% rather than 40%.

The AirDNA data showed the Austin metro area experienced a 7.2% year-over-year decline in revenue per available listing for the same three-month period ending May 2023.

The San Francisco Standard reported that data from AirDNA found that nights stayed in vacation rentals in San Francisco were down 29% in May 2023 compared to May 2019.

The outlet also spoke to several Bay Area homeowners who rent out rooms through Airbnb, including host Keith Freedman, who estimated that prices for San Francisco Airbnbs are down about 40% from last year and occupancy has declined 20% to 25%.

Separately, Gerli tweeted data showing that median rents in the Austin metro area declined 6% year-over-year while the San Francisco metro area experienced a 4% decline, which he said could also contribute to owners being forced to sell in the second half of this year.

Some of the decline in rents could be attributed to slowing population growth in those metro areas. 

While the Austin area has seen rapid growth over the past decade, particularly in the suburbs outside the city limits, the Census Bureau estimates that Austins population grew 1.3% from April 2020 to July 2022.

Unlike Austin, San Francisco’s population growth has been on a downward trend in recent years.

The Census Bureau estimates that San Francisco Countys population declined by 7.5% from April 1, 2020, to July 1, 2022. 

Slowing population growth or overall declines in a citys population raises the prospect of an “urban doom loop” developing.

An urban doom loop involves a decline in workers in offices in city centers, which results in businesses shrinking their office footprint and their rental overhead. 

The decline in demand causes real estate prices to fall, which in turn reduces property tax revenue while other sources of tax revenue, like sales tax, also take a hit due to the reduced traffic in downtown areas.

As the overall tax base declines, it becomes harder for city governments to fund services like law enforcement, which can lead to a rise in crime that makes downtown areas less desirable, worsening the “doom loop.”