Is Airbnb profitable in Australia?

What factors affect profitability of your short-term rental in Australia? Learn about pricing, expenses, and strategies to maximise your earnings from your Airbnb.
by Christian Suzon
April 22, 2025

Starting your journey as an Airbnb host can be an exciting way to earn extra income or even transform your property into a thriving business. But the big question is — is Airbnb still profitable? And how much can you actually earn?

While there’s no one-size-fits-all answer, understanding factors that affect profitability is a vital aspect for estimating your potential earnings and setting yourself up for success. Let’s break down the steps to help you optimise earnings and make the most out of your Airbnb hosting experience.

Is Airbnb still profitable in Australia?

Yes, Airbnb is still profitable in Australia. Thanks to its iconic landscapes, vibrant cities, and relaxed coastal lifestyle, Australia has a very strong tourism appeal, making it a prime market for short-term rentals. Demand surges even further during major festivals, concerts, and sporting events, creating ideal conditions for Airbnb hosts to maximise occupancy and returns.

Various Airbnb markets such as Hobart and the Sunshine Coast are experiencing an upward trend in tourist numbers, while others boast consistent demand but are anticipating a tourism boom due to upcoming events: this includes Sydney after increasing the SCG precinct concert cap from 4 to 20 events a year, as well as Brisbane, in preparation for hosting the 2032 Summer Olympic and Paralympic Games.

Is Airbnb more profitable than renting?

Airbnb can be more profitable than traditional long-term renting. With the flexibility to adjust nightly rates in response to seasonal demand, local events, and holiday periods, you can capitalise on peak travel times and earn significantly more than you would through fixed-price long-term leases.

Aside from the higher income potential, other pros for Airbnb vs renting include:

  1. Property maintenance: Airbnbs are generally better-maintained, as they are cleaned and inspected regularly for damage between guest stays.
  2. Flexibility: You have full control of when your property can be rented. This means you can still use it as a holiday home and keep it open for bookings the rest of the year.

Factors affecting Airbnb profitability

However, the profitability of Airbnbs isn't equal across all locations and properties —multiple factors that affect how much you can earn from your short-term rental (STR). These include:

  • Location: Properties located in the most profitable Airbnb locations in Australia such as Sydney, Melbourne, or Brisbane usually have more demand and higher income potential thanks to the appeal to different types of travellers such as tourists, domestic travellers, and business travellers. For cities, short-term rentals in CBDs or in locations well-connected to public transportation routes also receive more demand.

    Other key Airbnb locations in Australia include holiday destinations like the Sunshine Coast and the Gold Coast, where travel peaks in summer but also has steady demand the rest of the year due to off-peak events and business travel.
  • Property type: Though Airbnb accepts all types of properties, entire properties typically earn more than single rooms. If you’re also planning to list your short-term rental on other websites similar to Airbnb, some of them may only accept entire homes on the platform, further affecting profitability. Your Airbnb’s amenities also affect your income — for example:
    • Homeowners who allow pets inside their Airbnbs secure on average 21% more revenue compared with those that don’t encourage pets.
    • Properties with hot tubs and pools can earn up to 38% more
    • Homes with EV chargers, solar panels, and other eco-friendly features can get up to 19% more income
  • Photography and listing optimisation: You only have a few seconds to stand out from the competition on the Airbnb search results — this is where good photography and an optimised listing come in. A good cover photo, or hero shot, can determine whether or not a customer will click your property’s listing or if they’ll scroll past it and check others instead. This makes it the most important photo of your listing.

    But how much is a good Airbnb photo really worth? According to Airbnb, bookers spend 30% of their time looking at photos when viewing listings. Airbnb data also shows that properties with high-quality photos lead to on average 24% more bookings than listings with non-professional photos, helping them earn more. Getting professional Airbnb photos done can be a smart move to help you present your property in the best light to get more bookings and increase your occupancy rate. And though the cost of professional Airbnb photography may seem steep, the cost pays for itself over time by generating more bookings in the long-term. 

    You may also consider working together with an Airbnb stylist who can help you make strategic upgrades to your property to make it more eye-catching and justify higher nightly rates. It could be as simple as just moving things around, replacing linens, or adding a fresh coat of paint, or they could replace specific pieces of furniture if needed (think of a more comfortable bed, replacing a squeaky couch, or similar
Airbnb photography: non-professional vs professional
Airbnb photography: non-professional vs professional
  • Pricing strategy: While it’s tempting to price your property high to try to earn more, you’ll want to find a balance that attracts bookings without undervaluing your space. Pricing too high can deter guests and lead to too many unbooked nights, while pricing too low may result in paying for maintenance and upkeep costs at your own cost. When determining your Airbnb pricing strategy, make sure to:
    • Factor in all your expenses: Cleaning fees, restocking supplies, utilities, insurance, and maintenance, among others.
    • Use dynamic pricing or adjust your prices often if you prefer to do it manually: Watch out for seasonal trends and local events to price higher, and offer lower prices during off-peak periods when bookings slow down.onsider using Airbnb’s Smart Pricing, a free tool built into the Airbnb platform automatically update a listing’s prices based on Airbnb’s pricing algorithm. However, if you’re finding that Airbnb’s Smart Pricing is too high or too low, consider using third-party pricing software such as PriceLabs or working together with an Airbnb manager in your area who has in-depth knowledge of your market to tailor your pricing accordingly.
    • Use our recommended minimum night settings: To avoid any gap days in your calendar, it’s best to optimise minimum night stays. Aim for at least two-three night stays, or longer for bookings further out, and avoid one-night stays as much as possible.
  • Marketing strategy: Though Airbnb is still the most popular short-term rental platform, it’s worth hosting your property on various Airbnb alternatives in Australia such as Vrbo, Booking.com, and Hometime. Listing your property on multiple platforms is an easy way to reach a wider audience with minimal effort. Note that each platform will have different sets of fees, and that listings across different platforms aren’t automatically-synced, with potential to have conflicting information or even double bookings. We recommend working together with a channel manager to automate the process and avoid these issues entirely.

    You should also consider social media marketing for your short-term rental properties to reach a wider audience. This way, you’re not relying entirely on Airbnb to get bookings.
  • Guest reviews: Getting good reviews is integral to getting more bookings, and you’ll need to make sure that you can respond to your guests’ concerns as quickly as possible. This starts with good guest vetting: check if the guest has good reviews from other hosts. An effective guest screening procedure can help you weed out potential problem Airbnb guests and avoid having to file damage claims.

    Offering thoughtful touches like a local guidebook, complimentary snacks, or a friendly welcome note makes a guest’s stay more memorable. These small gestures can lead to glowing reviews, repeat bookings, and a higher overall income.

    Prompt responses to inquiries also make a big difference in getting good Airbnb reviews and more bookings. You can use automated Airbnb messages ensure that you don’t miss out on any information and respond to common questions about your property.

The most important thing in running an Airbnb is to be proactive. Monitor your performance over time and identify what you can improve, whether it’s adjusting pricing, updating your listing, or buying new furniture.

Maximise short-term rental revenue with Hometime

While managing a short-term rental comes with more responsibilities than a long-term lease, it doesn’t have to be overwhelming. Partnering with an Airbnb management company like Hometime makes it easy, and hassle-free. We handle the day-to-day operations like:

  • Property onboarding: We’ll help you set up your short-term rental as quickly as we can so you can start getting bookings ASAP. This includes navigating the local Airbnb rules for hosts in your area.
  • Listing optimisation: Our team constantly works on improving your listing through great content showcasing the best of the property with property styling, high-quality professional photos, and creating detailed guides for your guests.
  • Dynamic pricing strategy: Hometime’s pricing analysts and market experts will help optimise your revenue while increasing occupancy at the same time. We also list your property on multiple STR hosting platforms to further enhance your reach.
  • Airbnb cleaning services: We’ll find the best cleaners for regular cleans and restocking between stays, paid for using the built-in cleaning fee from the booking. No need to pay out of pocket between guest stays.
  • Guest communication and management: We go the extra mile to ensure your guests enjoy every part of their stay, from making the booking, checking in, checking out, and everything in between. This includes taking care of maintenance issues quickly, providing alternatives for late-night arrivals, and even meeting them in person when needed!
  • Property maintenance: Hometime’s local Airbnb experts will sort out all your maintenance needs to make both you and your guests happy. We’ll also do our best to get you the best rates for services in the area due to our close relationships with local businesses.
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