6 Things Most People Don’t Know About Airbnb
Almost everyone has heard of Airbnb especially those who are in the real estate industry. The story of how a group of friends thought about renting out their air mattress as a place to crash because the hotels in the area have been fully booked has been told countless times. Fast forward to today where Airbnb is practically a household name that grew into a multi-billion dollar firm, and we can say that it’s definitely here to stay. If you’re interested in renting out your property and creating a listing on this platform, here are some facts about Airbnb that may help you decide to go for it.
Host protection insurance
Most property owners are wary of renting out their homes because of the misconception that Airbnbs are mostly used for parties. Based on our own experience here at Hometime, there are many reasons why guests book short-term rentals and it varies from professionals on extended business trips, families looking for temporary accommodation due to renovations in their own homes, to those who are looking into purchasing a property within the same area but testing out the surrounding neighbourhood first. If this isn’t enough to soothe your mind, the good news is that Airbnb provides every host with a[million dollar liability insurance policy. This policy is offered for every incident and for every property a host lists on Airbnb to make sure that their rental business is protected.
Booking trends and popularity
Another outdated notion about Airbnb is that a lot of guests are international backpackers. Most backpackers nowadays prefer hostels and shared rooms and our data shows that 70% of the bookings made in 2019 are actually from Australia and New Zealand. What’s true, however, is that[most bookings made are for 2-4 guests per stay which means that making your property available for multiple persons will help increase your monthly earnings. In addition, New Zealand was listed as one of the most popular locations for Airbnb back in 2019. Australia has also been reported as one of the top countries that have seen the biggest financial impact brought about by the platform. The short-term rental business brought in over $4.4 billion in revenue, making Airbnb a great economic force that brings financial stability to most hosts.
Affordability
More and more travellers are using Airbnb and other short-term rental platforms with each passing year and for a good reason. On average, the price of short-term rentals vs hotel rooms is cheaper by around 21% for groups of guests choosing to stay in whole apartments and 49% cheaper for those who are renting private rooms. Besides affordability, staying in Airbnbs also offers guests a more local and immersive experience, making STRs the choice accommodation for many.
Airbnb arbitrage and experiences
You don’t need to own a property for you to become an Airbnb host. Airbnb arbitrage actually allows tenants to lease their landlord’s properties on Airbnb. It’s a completely legal business strategy that has been around for some time but has just not been talked about often. Of course, the property owner will have to know but once a landlord allows his long-term tenants to do this, they can start benefiting from the rewards that hosting offers.
Besides Airbnb arbitration, Airbnb experiences are also available on the platform. It focuses on tours, online experiences, social events, and other fun and meaningful activities that are designed to enhance a guest’s stay. Those who run businesses related to these can definitely leverage the opportunity to connect to a broader community when they create a listing on the platform.
Valuation and total listings
Even during the height of the COVID-19 pandemic from January to May 2020, Airbnb’s valuation still remained at 18 billion USD. This also didn’t stop investors from contributing an additional 2 billion USD to the company’s IPO fund at the end of March of the same year. Currently, Airbnb still has more than 7 million listings around the world and provides lodging to over 2 million guests on any given day. These listings span over a hundred thousand cities and more than 200 countries across the world.
Host and guest demographics
Many homeowners over the age of 55 are taking up Airbnb hosting as a source of income. This may be because most property owners are over 40, giving them a lower barrier to enter the business. What’s more, having a secure source of passive income allows these groups of people to retire early.
Notably, the majority of Airbnb bookings are made by people from the ages of 22 to 37, a younger generation who are open to modern and alternative technologies that provide the same time-tested services but in a new way. This surge of younger users would likely mean that the platform will continue to see more customers in the foreseeable future, thereby increasing the chances of success of those who opt to get into the short-term rental business.
All these statistics, trends, and data are pointing to a clear conclusion. That Airbnb and the broader short-term rental industry are helping property owners and people from all walks of life create not only meaningful experiences but successful businesses from the comfort of their own homes.
If you’re interested in our Airbnb management services or need to learn more about hosting and the short-term rental market, reach out to us. We’ll be happy to answer any additional questions you may have.
