Arbitrage vs. Co-Hosting: The Real Winner Isn’t Even Close | The STR Scale Show with Mike Reilly | Ep 34

The arbitrage era is cracking — fast.

With Sonder filing bankruptcy and operators across the country getting crushed by fixed leases, the truth is clear: the STR model you choose determines whether you scale… or sink.

In this episode, we break down why arbitrage is failing, what Sonder’s collapse teaches every host, and why co-hosting remains the most profitable, low-risk, scalable model in 2025 and beyond.

Inside this episode:

• Why arbitrage collapses under pressure

• The hidden costs operators never calculate

• Why co-hosting produces higher margins with lower risk

• How boutique operators beat centralized “big brand” models

• What the fastest-growing hosts are doing differently

• The shift every STR operator must make in 2025

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00:01:00 – The Real Cost of Arbitrage: Leases, Debt & Cash Burn

00:02:30 – Why Arbitrage Margins Collapse in Today’s Market

00:03:45 – Co-Hosting vs. Arbitrage: The Risk Difference

00:05:10 – Arbitrage at Scale Becomes a Cash-Flow Death Trap

00:06:15 – Real Examples of Small Operators Losing Money

00:07:10 – The Tiny Margin of Error That Kills Arbitrage Deals

00:08:30 – Why Co-Hosting Wins: Low CAC, High Lifetime Value

00:10:20 – How Operators Are Scaling Co-Hosting With $0 Spend

00:12:20 – Centralized vs. Local: Why Guest Experience Matters

00:15:00 – Why Arbitrage Can’t Keep Up With Industry Changes

00:17:00 – The Bankruptcy Wave: Small Operators Getting Hit

00:18:30 – How to Pivot Out of Arbitrage Before It’s Too Late

00:20:10 – What a Healthy Co-Hosting/PM Business Looks Like

00:22:00 – No Get-Rich-Quick: The Reality of STR Success

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