By The Hospitable Team
Whether you’re an experienced Airbnb host or have just started renting out your property short-term, understanding key Airbnb metrics is imperative to running a successful business. Don’t know where to start? Read this guide to learn more about what metrics and KPIs you should monitor to ensure you are on the right path to achieving your short-term and long-term business goals.
What Are Airbnb KPIs?
The word KPI is an abbreviation for “key performance indicator.” It’s a measurable value that shows how effectively a business achieves its key business objectives.
Airbnb KPIs indicate the performance and progress of your Airbnb listing. They help you gain insights that allow you to identify and understand the trends. Then you can see if you are on the right track to meet your goals or if you need to make some adjustments to make your vacation rental business better.
Airbnb Success Metrics: Why Do You Need to Track Them?
Tracking the performance of your Airbnb listing is just as important as doing your best to attract new guests. That means you need to have accurate data that you can measure. Airbnb success metrics offer quantitative evidence to help you understand how your business is doing.
As a result, you get a realistic view of your business and can make strategic decisions faster based on facts and not on your gut feelings. Tracking KPIs will give you an understanding of where you should improve your processes and operations, helping you maintain business efficiency and growth.
Another way to make your Airbnb business more efficient is to use vacation rental software like Hospitable. With Hospitable, you can automate your daily hosting tasks, which will have a positive impact on all your KPIs.
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Airbnb Key Metrics
There are several critical metrics that short-term rental hosts and property managers should keep an eye on. Let’s take a look at Airbnb key metrics that you should measure to stay on top of things.
The occupancy rate of your vacation rental is the percentage of nights that guests stay in your listing. You can manually calculate your average occupancy rate if you divide the number of booked nights by the number of available nights and multiply it by 100.
For example, if your rental was booked for 20 nights out of a 30-day month, then your occupancy rate for that month was 67%. If your rental was closed for maintenance for 5 days, there were only 25 available nights. That brings your occupancy rate to 83%.
Occupancy rate is a key metric that determines the cash flow and can be used to adjust and compare prices. If your listing’s occupancy rates are too high compared to similar properties in your area, it might indicate that your prices are too low.
Average daily rate
This metric indicates what guests are paying for a specific period in your short-term rental property. It can tell you about your earnings potential and is useful for identifying seasonal trends.
You can calculate the average daily rate (ADR) if you divide the total revenue received from your bookings for a specific property by the total number of nights booked. If numbers are too low, it may be a sign that you need to adjust your prices. You may consider upselling or cross-selling additional services if you want to increase your average daily rate.
Average length of stay
This metric shows how many nights one guest stayed at your place. You can calculate it if you divide the total number of booked nights for the month by the total number of bookings. The average length of stay may be influenced by how welcoming and comfy your rental feels to your guests. That’s why it’s important to go the extra mile to provide your guests with popular amenities.
RevPAR is short for revenue per available room. It’s one of the most popular metrics in the hospitality industry, providing a more holistic view of a rental property’s performance. You can calculate RevPAR by multiplying your average daily rate by your occupancy rate.
RevPAR will help you compare the performance of your business to that of your competitors. Tracking this metric is also useful if you manage multiple Airbnb listings and want to see how your different rental properties stack up against one another.
Net operating income
The net operating income is the revenue that a rental property has generated after you have deducted the operating expenses, such as the Airbnb commission fee, cleaning, and maintenance costs, etc.
This metric allows you to examine your Airbnb’s profitability and get a more accurate idea of your expenses. If you notice a significant difference between your total revenue and net operating income, it might be time to examine your operating costs and take measures to reduce them.
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Revenue per property
If you have multiple Airbnb properties, it’s important to know how much each property generates. You can do it by measuring the revenue per property. Tracking this metric can help you determine which properties are the most cost-effective. You can calculate it by dividing your gross rental revenue for the specific period by the total number of your properties.
Total revenue for all your vacation rentals
Your total revenue is the amount of money you have received from all your bookings during a specific period. This information can help you to gauge how much money you can potentially make in the future. To calculate this metric, you need to add all the costs your guests paid, including nightly rates, cleaning fees, etc.
Revenue per channel
If you list your property on multiple channels, such as Airbnb, Vrbo, and Booking.com, and also have your direct booking website, it’s critical to track your rental revenue per channel. Managing all these platforms requires time and effort, so by analyzing the data about the revenue generated by each of them, you can make informed decisions and better allocate your time.
Inquiry-to-booking conversion rate
While receiving a lot of inquiries from potential guests is great, they are useless if you don’t get any bookings. If your inquiry-to-booking conversion rate is low, it could mean that you take too long to respond or your property doesn’t meet travelers’ expectations. You can calculate this metric by taking the number of distinct inquiries you received and dividing it by the total number of bookings for that rental property.
Average response time to an inquiry
Airbnb expects hosts to reply to inquiries within 24 hours, but it’s better to reply to your potential guests as soon as you get a new message in your inbox to ensure a pleasant experience. You can calculate your average response time to an inquiry by adding up the time it took to respond to all your different inquiries and dividing it by the total number of inquiries.
Response rate is one of the ranking factors on the platform, so having a good response rate helps your Airbnb listing appear higher in guests’ searches. You’ll be able to reply to booking inquiries faster if you use vacation rental software like Hospitable to automate Airbnb messaging. With Hospitable, you can schedule sending automated replies after new booking requests and much more.
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Airbnb Performance Metrics for Professional Hosts
If you have more than one listing, you can manage them and track your hosting performance by opting into Airbnb’s professional hosting tools. One of them is Insights which offers a number of KPIs to track your progress as a host.
If you go to the Insights section, you’ll find Airbnb performance metrics for the following areas:
- Conversion—in this section, you can find information about your booking conversion rate, booking lead time, average returning guest rate, average page views, and wishlist additions
- Occupancy & rates—four sub-sections will show you data about your occupancy rate, cancellation rate, length of stay, and nightly rate
- Quality—this section is based on the reviews you have received from guests across such categories as accuracy, amenities, check-in, communication, cleanliness, location, and value
- Earnings—the section gives you a full overview of your earnings for each month, which might reveal patterns and seasonality for your Airbnb property
- Hosting progress—this tab provides data you need to go further in your hosting business; it indicates your current status and what you need to do to meet the criteria of the Superhost program.
Keeping track of all Airbnb metrics is vital for hosts and property managers to stay informed about the status of specific processes. Knowing the precise data, you’ll be able to reach the decisions that serve the best interests of your vacation rental business. That can help you maintain efficiency and scale more quickly and easily.
Find out how to use Airbnb analytics and market intelligence tools to gather and analyze accurate data to help you build a successful Airbnb strategy and boost your short-term rental profits.
The bookings are trickling in, but you want more bookings and more money. We always want more, that’s just human nature.
There’s a whole lot you can do to maximize your occupancy on Airbnb, and most of them won’t cost you a dime!
Start with these 15 tips!
This article will help you determine how to evaluate vacation rental property to inform your buying decision. We’ll also talk about evaluating ROI on a rental property and determining whether the rental is worth the investment.