THE Montego Bay real estate market has witnessed a substantial shift in the wake of the global COVID-19 pandemic as short-term Airbnb listings have surged alongside a corresponding increase in long-term rental prices. Through interviews with three seasoned real estate professionals the Jamaica Observer delved into the intricate relationship between the Airbnb industry and the wider real estate market in Montego Bay.

Although the realtors held diverse perspectives on how and why Airbnb listings are again proliferating, and their impact on long-term rental prices following the global health crisis, they unanimously acknowledged the Airbnb industry’s undeniable influence.

Despite the challenges posed by the pandemic the Airbnb market in the area has quickly regained momentum, resulting in a surge in listings. According to AirDNA there were 1,146 listings available in the Montego Bay area in April 2023, representing a 23 per cent increase compared to the previous year and a 37 per cent increase compared to April 2018.

Garfield Gourzong, managing director and realtor/owner of the Gourzong Realty Group, believes that returning residents have played a significant role in the growth of Airbnbs.

“What we are finding is that for those persons who were thinking of coming home, the pandemic really influenced a lot of them to consider that [course of action] more seriously,” Gourzong explained. “And when you look at the cost of real estate in comparison to Florida, which is their next best option, we are still very competitive in our real estate prices.

“Now that prices in Florida have escalated to a point where it is now more expensive than flying to Jamaica and investing and getting more for your money here, people are looking at Jamaica as a more lucrative place to retire and invest in,” he elaborated. “And because [Air]bnb is so huge here it is a win-win situation for those persons who want to buy now in preparation for retirement and know that it can facilitate some income for them in the meantime.”

Regarding local property owners, Gourzong pointed out that the pandemic pushed a lot of them into the Airbnb market as a number of long-term tenants suffered the financial effects of the global health crisis.

“The pandemic really affected a lot of people who were renting long-term, and of course you would immediately have a problem if your tenant got laid off, fired, or got a reduction in salary – which is what had happened across the board,” he said. “As a property manager I had to do payment plans and do certain things to make sure that it didn’t go totally terrible for the landlord and have the tenant pretty much homeless.

“So, that in itself brought more interest into the bnbs, especially after the pandemic ended. And now we have a lot of long-term inventory transferred to bnb.”

Sonia Morris, realtor associate at Jackson Clarke Realty, expanded on the attractiveness of the Airbnb market to local owners.

“I have a client in Ironshore, and when he checked out what his property would get for Airbnb for two months, he wouldn’t get that in six months with a local,” she said. “He is more game for taking Airbnb than taking a local person.

“People who can’t sell their houses, they just turn them into Airbnbs,” she continued. “People who can’t rent and get what they want, they just turn it into Airbnb. Some people are even doing Airbnb in their own living space, with a room or two.”

Remax Elite realtor Joan Lee related that in the most upscale areas of the city she found that during and after the pandemic new Airbnbs were being driven by foreigners rather than returning residents.

A number of these foreigners, according to Lee, had selected Jamaica as a remote work destination during COVID.

“Some people were working remotely from home during the pandemic so they came to Jamaica to do that and then sublet in the times they were not here.” she said. “Let’s say they go back to Florida and for the two weeks or four weeks they are not here, they would sublet the apartments.”

The Remax Elite realtor disclosed that she had a number of foreign clients who began renting Airbnbs in very upscale locations in the middle of the pandemic, who later began buying property to rent as Airbnbs.

The rise in Airbnbs, according to Gourzong, is one of the primary factors that has driven up long-term rental prices in residential areas that now cater to the tourism market, reducing long-term inventory.

“The prices are higher while the inquiries on those places have also increased,” he said.

While agreeing that Airbnbs have reduced long-term inventory, Lee, again citing the most upscale areas in the city, believes that in these particularly wealthy neighbourhoods long-term rental prices have increased for other reasons.

She points to the fact that the safety and comfort of a high-value location such as Freeport drives up the long-term rental prices.

“The demand for Freeport is crazy,” Lee emphasised. “People feel safe walking on the road and it has attracted a wide variety of personalities. You have the hotels around there too, so there is that added security as well.

“So Freeport prices would have gone up anyway,” she assures. “It isn’t about Airbnb.”

Lee also mentioned Spring Farm as another area where demand and prices have not been influenced by Airbnbs.

“Spring Farm is an upscale neighbourhood but there is not that demand [for rentals] because you are talking about estate homes, basically,” she stated, essentially reinforcing the point that the extent of the influence of Airbnbs on rental prices is area-specific.

Garfield Gourzong noted that the proliferation of Airbnbs has also generally resulted in improved maintenance of properties.

“The Airbnb market directly influences that [improved maintenance] because the people who buy for the intention of Airbnb want to make sure that the clients don’t complain, that they don’t have to refund people because the pool is not working or the gym is not working,” he explained. “Those are the things that we were plagued with previously.”

Sonia Morris echoed this sentiment, pointing out that with Airbnbs “in order to get good ratings and to keep your property in good stead you have to maintain it, so yes, your property is being maintained much better”.

“Developers now are looking more keenly at amenities and what people are looking for, not just in Jamaica but overseas,” Gourzong added. “You will find that a lot of developments have a much more modern feel now. Lighting, window-size, gated with gym and pool and walking trail, and close proximity to other [amenities].

“Also, being able to be managed by a proper management company is important so that the standard of the units are upheld. For many years tenants were also hesitant because the development started off nice but would diminish in terms of the way it was upheld.”

The three realtors interviewed by the Jamaica Observer, through their professional experience, have revealed some of the dynamic interplay between the Airbnb market and the wider real estate industry in the city of Montego Bay.

Despite the temporary disruption caused by the pandemic to tourism on the island, the growth of Airbnbs has swiftly resumed, gaining momentum and emerging as a fundamental pillar within both Montego Bay’s real estate and tourism sectors.