A Town That Became 'One Giant Airbnb' Is Now Facing a Reckoning Before the pandemic, there were about 400 properties for rent in the area. Now, there are 2,400.

^{This article originally appeared on Business Insider.}

It's the town that Airbnb built.

Thousands of rental cabins have descended upon sleepy, 219-person Hochatown, Oklahoma — a popular vacation spot on scenic Broken Bow Lake that's a three-hour drive from Dallas, the New York Times reported.

Before the pandemic, there were about 400 properties for rent in the area. Now there are 2,400, according to the short-term-rental-tracking website AirDNA, as reported by the Times.

"The town is basically one giant Airbnb," David Francis, an Oklahoma state official, told the Times.

But with Hochatown's Airbnb boom comes challenges and growing pains. The influx of travelers was responsible for $456,000 in tax revenue the town collected in September — and local officials hope to hit $1 million a month in the near future. But Hochatown will need the money: It has no professional firefighters, police officers, or garbage collectors. Unpaved roads plague rental owners, as does unreliable water infrastructure, which is essential to maintaining the hot tubs that keep guests happy.

Some cabin owners who bought properties recently, when prices were high, also worry that there aren't enough traveler bookings to make their investments worthwhile. That's one hallmark of the so-called "Airbnbust," which happens when the supply of homes for rent outpaces demand in some areas, cutting into owners' profits.

Airbnb Director of Communications Jay Carney emphasized to the Times that the platform has been able to generate tourism dollars for more remote locations like Hochatown.

"The dispersal of tourism, often to places where there are no hotels, has major economic benefits," he said.

How Airbnbs took over Hochatown

Hochatown is just one of the more rural areas that saw an explosion of short-term rental listings over the last few years.

At first, the boom was unexpected: Hochatown resident Todd McDaniel, who owns 60 rental properties in the area, said when the pandemic first hit, owners had to refund thousands of dollars to guests canceling reservations. But when Americans began to travel again, the floodgates opened.

"Then somebody flipped the switch, and we were running at 95 percent occupancy," he told the Times.

The Airbnb boom fueled a campaign to officially incorporate the town, which was successful last November.

There may be too many Airbnbs for some hosts to make the money they dreamed of

In similar towns and cities across America, the gold rush to make money off Airbnb is slowing down.

Investor enthusiasm has translated into market saturation in some areas. Airbnb itself reported in its third-quarter earnings call that supply increased 19% from 2022 to 2023, outpacing traveler demand (which still increased by 14%).

It's enough of a gap, though, to deflate some new rental owners' dreams.

Take a Hochatown cabin called "California Dreaming," which sold in 2020 for $590,00. It changed hands shortly after, in 2021, for nearly double that price: $1.1 million. In 2022, it listed for an all-time high of $1.299 million. However, since then, its price has been cut repeatedly; it's now on the market asking just $899,000.

Dallas resident Leo Winegar has also gotten dinged in the slowdown. Winegar bought a piece of land in Hochatown at the end of 2021, with a dream of recreating childhood memories of his uncle's cabin in Idaho.

"We scrimped and saved to buy a plot of land and get a construction loan," said Winegar. "At the time, the numbers were so amazing, it seemed like there was no way I could lose."

But now, he told the Times, he's unsure about his ability to recoup his investment. Just this summer, Winegar got laid off from his tech job; he now works night shifts at Costco and is starting a handyman business in Hochatown.

"I hope I don't have to sell the cabin," Winegar said.