OTAs
How to Make Airbnb Profitable
Learn about key strategies that will help you balance costs and revenue and set your business for success.
Running an Airbnb has become a popular way to make extra income, but becoming a successful host isn’t as simple as listing a property and waiting for guests, especially in crowded markets. You should treat hosting not as a side hustle, but as a real business that requires investment of time, thoughtful planning, and hard work.
So if you’re eager to build a sustainable short-term rental business, in this blog, you’ll find key tips on how to make your Airbnb profitable and position yourself for success.
How to Make Airbnb Profitable
In general, the profitability of Airbnb properties centers on balancing your revenue and expenses. In other words, your profitability depends not only on how much you earn from renting your space to guests. It also depends on how much you spend to set up your property for Airbnb and to keep your business running.
This means that when considering how to make your Airbnb profitable, you should focus on two key areas: minimizing Airbnb expenses and increasing your revenue.
In this article, we’ll take a closer look at both aspects.
Making more money on Airbnb is also about minimizing the effort required to manage your Airbnb property, saving both time and money. All-in-one property management software like Hospitable can help you automate repetitive tasks and streamline every aspect of your business, freeing up your time to focus on delivering exceptional guest experiences.
How to Make Airbnb Profitable: Minimize Expenses
Here are some ways to reduce your ongoing expenses for running a vacation rental property.
Prioritize practicality when setting up your home for Airbnb
You’ll need to redecorate and refurnish your home, and equip it with essential amenities to make it perfect for your potential guests. Your goal is to create a welcoming atmosphere and ensure comfort, so guests have a seamless, enjoyable stay.
It’s important to invest in practical, durable, and high-quality items that are easy to clean and maintain. Look for furniture pieces with strong construction that can withstand frequent use and have removable, washable covers. This will help you streamline your turnover cleanings and avoid frequent replacements or repairs, which can increase operational costs.
Download our free guide for practical advice on preparing your place for short-term rental and avoiding unnecessary expenses.
Perform routine property maintenance on time
Guests expect spotless, safe, and well-maintained rental space. However, short-term rental properties experience more wear and tear than traditional long-term rentals, so you need to perform regular proactive property maintenance to keep your property in top shape. This is key to securing 5-star ratings and repeat bookings.
Preventative care also helps reduce Airbnb maintenance costs. Regular checks help extend the life of your furniture and keep appliances running smoothly, preventing costly replacements. And addressing small issues, such as HVAC servicing, prevents minor issues from escalating into costly repairs.
Install smart thermostats to optimize energy use
Smart thermostats offer a convenient way to remotely monitor and adjust the temperature at your rental property. Smart thermostats help maintain a consistent, comfortable temperature for guests year-round and optimize energy use at your rental.
The best smart thermostats for Airbnb can save you up to 12% on heating and 15% on cooling costs, reducing unnecessary energy use. You’ll benefit from thermostats even more if you sync them with your booking schedule using a PMS like Hospitable and automate temperature control at your property. As a result, your guests will be able to enjoy a comfortable stay, and you will be able to save money on utility bills and reduce your Airbnb expenses.
Choose the right automation software
In today’s highly competitive STR market, using an Airbnb PMS to simplify listing management and improve operational efficiency is no longer an option; it’s a necessity. Choose your property management automation software wisely—make sure it provides the features and tools that fit your needs, reduces your workload, and offers the best value for money.
Not all short-term rental PMS providers are upfront about their pricing, and hidden fees can quickly add up, negatively impacting your bottom line in the long run. Make sure you have a clear understanding of exactly what is included in the subscription price and what is extra.
Most PMS offer dynamic pricing and smart lock management as paid add-ons. Hospitable offers built-in dynamic pricing at no extra cost on Host, Professional, and Mogul plans. Smart lock and smart thermostat automation are included in the Professional and Mogul plans.
Ask your guests to sign legal contracts
Hosting on Airbnb means opening your home to strangers who may not treat it with the same care as you do and may cause damage to your property. That’s why it’s always a good idea to ask guests to sign an Airbnb rental agreement to get extra protection against legal and financial risks if a guest fails to follow the house rules or causes damage. Moreover, this legally binding contract may even help filter out troublesome guests and avoid potential problems.
Implementing vacation rental agreements for your property doesn’t necessarily mean doing time-consuming paperwork and creating a new contract for each booking. Hospitable can help automate this process and ensure a seamless experience for you and your guests.
You can create a rental agreement template, and Hospitable will populate it with guest and booking data to generate an agreement for each new reservation. Your guests can sign their rental agreements digitally through their guest portals. You may also opt to ask your guests to verify their IDs when signing rental agreements.
How to Make Airbnb Profitable: Take Steps to Increase Revenue
Implement dynamic pricing
Finding the right nightly rate for your Airbnb rental can be tricky. If you charge too little, you can get bookings, but you will lose out on revenue. If you charge too much, you’re likely to miss out on bookings altogether. Either way, your revenue will suffer. So the right Airbnb pricing strategy is about keeping your property booked while maintaining strong nightly rates that cover your expenses and let you make a profit.
The easiest way to optimize your pricing is to use a dynamic pricing tool that adjusts rates in response to real-time market conditions, including demand, seasonality, and local competition. Dynamic pricing helps ensure you get the most out of your peak seasons, while keeping your property booked year-round.
To help you save money on third-party pricing tools, Hospitable offers a built-in Dynamic Pricing solution that is included in the Host, Professional, and Mogul plans at no extra cost. If you enable this solution for your property, Hospitable will automatically adjust your rates based on demand fluctuations, competition, and seasonality to maximize your property’s revenue potential.
Make more money with upsells
Upselling is a great way to increase your revenue per booking, as vacation rental guests are ready to spend on extra services and amenities that enhance their stay. You can offer your guests early check-ins, late check-outs, gourmet food baskets, picnic kits, bike rentals, mid-stay cleanings, and other value add-ons for an additional fee.
Upselling doesn’t require much work if you use the right technology. With Hospitable, you can offer paid upsells to your guests in their guest portals automatically, without requiring any third-party tools. Create a catalog of your offerings and send your guests the link to their guest portals in messages.
List your rental on multiple channels
Relying on a single OTA platform isn’t enough; it limits your reach and reduces your booking opportunities. By adopting a multi-channel strategy, you’ll put your property in front of more eyes, helping increase bookings and maximize revenue. A strong distribution mix typically includes a combination of major OTAs, such as Airbnb, Vrbo, Booking.com, niche platforms that cater to specific traveler segments, social media, and a direct booking website.
Managing listings on multiple channels won’t be a problem if you use Airbnb property management software with a channel manager functionality like Hospitable. As a channel manager, Hospitable can help keep your calendars in sync across your connected major booking platforms, including Airbnb, Vrbo, Booking.com, Agoda, Google Vacation Rentals, and your direct booking website.
Our STR super app also offers iCal Import functionality that lets you sync bookings from niche sites, including Houfy, Hopper, Hipcamp, and many more, and avoid scheduling headaches.
With Hospitable, you can easily create a direct booking website, and we’ll list your property on Google Vacation Rentals, so you’ll have an opportunity to get direct bookings without paying high third-party fees.
Final Thought
Renting your property on Airbnb can be rewarding and profitable if you approach it strategically. Balancing expenses against revenue and using automation tools to streamline property management are key to maintaining healthy profit margins. Hopefully, our tips on how to make Airbnb profitable will help you turn your property into a successful short-term rental business.
