DENVER (BusinessDen) — The deep freeze weighing down the hospitality industry is wreaking havoc on a local Airbnb market that’s grown to more than $10 million a month.
Seattle-based Loftium, which said one-third of its 600 properties are in Denver, is negotiating to reduce lease payments to landlords. The company, which raised $15 million last year, leases homes with two units and then has one long-term tenant help manage the Airbnb unit like an innkeeper. Loftium typically pays property owners more than market rent for a long-term rental.
But now that business model is broken.
Loftium CEO Yifan Zhang, 31, said her startup is not making any money right now.
“Travel is gone. … Whatever a (long-term) rental is able to pay is the income that’s available,” Zhang said. “We’re trying to just make something work.”