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How to Make Money with Airbnb? The Only Guide You Need
So, is being an Airbnb host really worth it? Can you make good money rening on Airbnb? It’s not for everyone, however, this article will help you to decide if becoming an Airbnb host is worth it for you.
Airbnb is a popular online travel agency (OTA) platform that offers numerous opportunities to earn extra income for anyone with a space to share. You don’t need any prior experience to get started, and the platform offers flexibility, allowing you to tailor your hosting to suit your lifestyle and commitments.
So, is being an Airbnb host worth it? Do the pros outweigh the cons? In this blog, we’ll talk about everything you need to know about making money on Airbnb from your property. We’ll cover the strategies that will allow you to run an Airbnb with less effort to enjoy the benefits of passive income and build a profitable business.
Making Money on Airbnb: Factors You Should Keep in Mind
Can you make good money on Airbnb? The short answer to this is yes. DEFINITELY!
But the long answer is, it depends. Making good money on Airbnb isn't as straightforward as creating a quick listing, hitting publish, and expecting bookings to roll in.
In fact, earnings vary, and there are a few key factors that you should keep in mind when thinking about how to make money with Airbnb:
Location: big cities, holiday destinations, and tourist hotspots can command higher rates.
Property type and features: entire homes earn more than private rooms, and investing in premium amenities like game rooms, pools, and gardens that attract guests can potentially make your rental more profitable.
Seasonality: high demand for vacation rentals in peak travel seasons leads to increased occupancy and higher income.
Operational efficiency: the more efficiently you work, the less time you spend on routine tasks like managing turnover cleanings, maintenance, and guest communication. As a result, you have more time to focus on high-value tasks, such as marketing and providing a memorable guest experience.
Your expenses will, of course, impact your bottom line. Some costs are necessary; others result from poor planning and making mistakes. Learn from the mistakes of others! Download our guide on preparing your place for short-term rental to avoid unnecessary expenses.
How to Make Money with Airbnb
It’s not enough to list your space if you want to succeed on Airbnb. You’ll likely secure a few bookings and earn a modest income this way. However, to build a sustainable business, you’ll need to invest a little time and learn how to do things the right way.
In its most basic form, making more money on Airbnb comes down to just two things:
Maximizing revenue
Minimizing overheads.
So, let’s take a closer look at each.
Making Money on Airbnb: Maximizing Revenue
Maximizing revenue means getting more bookings at better rates. Let’s discuss a few ideas that might help you attract potential guests and secure more bookings through Airbnb.
This approach requires a bit more effort—more changeovers, more guest messages, and so on. But you don’t have to do everything yourself. Airbnb automation tools, such as Hospitable, can help you automate various aspects of managing your short-term rental property.
An important metric to consider is your booking rate. It’s the number of people who make a booking divided by the number who view your listing.
This metric is essential for several reasons.
Firstly, a good booking rate means you don’t need as many views on your listing to secure a booking.
Secondly, a good booking rate will increase the visibility of your listing in Airbnb’s search results.
Think of it this way: the more bookable your place is, the more Airbnb will want to showcase it to potential guests.
Optimize your listing to attract more guests
Complete your listing. Guests like to know exactly what they are booking, so provide them with all the necessary information about the rental space, amenities, and nearby attractions.
Create a compelling title and description that let people know what to expect at your place and highlight unique features that set your listing apart, such as a fully equipped chef’s kitchen, a private garden, or an outdoor bathtub.
Use keywords that potential guests might search for. Provide details that evoke emotions to help guests imagine what they would do while staying at your space. Remember that you’re selling an experience.
Upload professional-quality photos of your Airbnb, which showcase your property in the best light because it’s the first thing Airbnb visitors see on the search results page. Great photos sell your place more than anything else.
In 2022, Airbnb introduced a change to its search algorithm, allowing guests to explore unique places to stay worldwide using Airbnb categories. You can benefit from this feature even if your property is outside a tourist destination. Moreover, your listing may appear in several categories to reach different types of travelers. You can try to influence the category or categories for which your home is shown by using relevant words and phrases associated with those categories.
Complete your Airbnb profile to help Airbnb guests get to know you better. It’s a good way to showcase your personality, build trust, and establish personal connections with travelers who might want to stay with you.
Collect positive reviews. Do your best to make your guests happy with their stays, and don’t be shy about asking them to leave a review in your checkout message. Great reviews add trust and social proof, attracting future bookings.
If you haven’t got an Instant Book on, switch it on now to ensure a seamless booking experience. Guests appreciate the ability to book instantly. They don’t like sending multiple booking requests until one is accepted. Additionally, Airbnb prioritizes listings that have Instant Book enabled.
Respond to guests as soon as possible
A fast response signals that you’re an attentive, professional host potential guests can trust for a great experience. Therefore, the sooner you respond to guest inquiries, the more likely they are to book.
Airbnb hosts are expected to respond to all guest inquiries and reservation requests within 24 hours. If you fail to do so, your potential guests will have to resume their search and explore your competitors' properties.
Guest communication can be very time-consuming if you type and send each message manually. A smarter approach is to automate your Airbnb messages with short-term rental software like Hospitable. Our system automates 90% of your guest communication with AI, from initial inquiries to checkout messages and beyond.
Start by setting scheduled messages. Your guests will receive the information they need at the right time, triggered by dozens of events. Still, guests will have questions.
Hospitable uses AI to detect questions on more than 20 common topics and automatically send your pre-written responses.
You can use Suggest with AI in your Inbox to generate a draft response to your guest message based on booking details and past replies. You can use the draft as is or edit it before sending it to your guest. You can also create a digital guidebook and upload it to our Knowledge Hub to educate the system about your rentals, making the suggestions more accurate.
You can also use the Improve with AI feature to rewrite a message when manually messaging your guests. Just provide a few bullet points as guidance, and our system will craft a personalized reply.
Finally, when you’re confident in the quality of our AI suggestions, you can opt for Auto Inbox. In this case, we will respond to guests’ questions without your review. You can set specific time frames when this feature is on, or keep it on all the time and enjoy 100% autopilot.
Make your listing stand out
Earning Airbnb Superhost status is one way to stand out on the platform. A small badge resembling a military medal serves as a booking magnet, signaling to potential guests that they can expect excellent customer service.
Requirements for achieving Superhost status, such as maintaining high review ratings and a low cancellation rate, are strict, but meeting them will also benefit your Airbnb SEO.
Striving for excellence to ensure an exceptional guest experience may also help you earn the Guest Favorite badge awarded to individual listings. This dynamic badge is displayed in search results and on listings’ pages to recognize the most-loved properties.
The Guest Favorite properties are chosen automatically every 24 hours based on guest ratings, reviews, and reliability data. Airbnb listings featured in Guest Favorites can gain increased visibility and attract more guests.
Since May 2024, Airbnb has also launched a new highlight to help top listings stand out. The top 10% of eligible listings are highlighted with a gold trophy, a gold Guest Favorites badge, and a label indicating the listing’s ranking within the top 1%, 5%, or 10%.
Optimize your pricing strategy
The quickest, easiest way to increase revenue is to optimize your listing's nightly rate. It means adjusting the amount you charge per night to be competitive at all times.
The first, intuitive approach most hosts take is to prioritize occupancy by lowering prices. It’s a good approach if you’re starting your hosting journey—it will help you get your first guests and secure your first positive reviews. Charging too low in the long run means you leave money on the table. Moreover, with high occupancy, you increase the natural wear and tear of your property.
Going forward, you should prioritize RevPar (revenue per available room). In simple terms, you must balance occupancy and high margins. This requires a significant investment of your time, especially if you conduct your own market research, set your pricing strategy, and adjust prices manually. The easiest way to get pricing right is to use a dynamic pricing tool that leverages sophisticated algorithms and data-driven insights, enabling prices to be adjusted in real time.
The good news is that Hospitable's dynamic pricing is included in the Host, Professional, and Mogul subscription plans at no extra cost, so you can use it to optimize your rates.
As soon as you enable this solution, it will automatically adjust your Airbnb rates in real time to maximize revenue and occupancy. You can maintain full control over your rates by setting a base price and minimum and maximum price thresholds. You can also manually adjust rates for special dates as needed.
Increase your revenue through upsells
Upselling is a straightforward way to increase profits per customer while ensuring the best possible guest experience. The key is to select the right add-on services or products that will bring genuine value to your Airbnb guests and enhance their stay.
You can offer your guests various additional services for an extra fee, such as early check-ins, late checkouts, luggage storage, local experiences, and extra cleanings.
Although it may seem like a lot of work, you can automate the upsell process using technology. Hospitable users can take advantage of our Upselling feature. Just build a list of your offerings. Your guests will see available options in their guest portals.
In addition to the services and amenities that hosts can provide themselves, Hospitable users can earn extra income by offering Trip Insurance to their guests. This upsell is automatically enabled for all eligible US properties, so you don’t have to do anything to start offering it to guests. Your guests can purchase trip insurance in their guest portal, and you receive commission for each policy sold.
Use different channels to market your property to make more money
You don’t have to rely only on Airbnb to market your property. Being visible on multiple platforms will extend your reach and attract more guests. This includes other OTA platforms, such as Vrbo, Booking.com, or Agoda, as well as social media and your direct booking website.
Managing listings across multiple channels manually is time-consuming and error-prone, leading to double bookings. However, you can avoid this by using short-term rental software with channel manager functionality, such as Hospitable.
You can also use the Hospitable Direct service to create a direct booking website using easy-to-customize templates. Then, your property will get listed on Google Vacation Rentals, and you’ll be able to get direct bookings without paying high third-party fees.
Making Money on Airbnb: Minimizing Overheads
It’s no good increasing revenue when your overheads are spiraling out of control, so close attention to outgoings is a must.
Regular property maintenance
As a host, you are responsible for keeping your rental in good condition to ensure a pleasant living environment for your guests. That means you need to perform routine property maintenance on time to prevent minor issues from escalating into more significant problems.
Preventive maintenance will help you identify and address small issues, minimizing the need for extensive, costly emergency repairs. To save on operating expenses, create a maintenance calendar and follow it diligently.
Save on taxes
Operating an Airbnb is a great way to earn extra income, but it has tax implications. The good news is that there are legal ways to reduce your taxable income by claiming Airbnb tax deductions.
If you are actively involved in managing your Airbnb, you can deduct certain expenses associated with running your short-term rental property, including costs of repairs and maintenance, utilities, insurance, cleaning services, and more. Claiming tax deductions will help you lower the operating expenses of your STR business.
Minimize the risk of dealing with problem guests
While most Airbnb guests are great, even one bad booking can disrupt your business. By letting just anyone stay at your property, you risk expensive property damage, legal issues, potential liabilities, and neighbor complaints.
So you need to take preventive measures to safeguard your income and minimize the financial risks posed by troublesome guests. It’s essential to screen your guests to identify red flags before they arrive and to ask them to sign a rental agreement for additional legal protection. These are effective ways to filter out problematic guests before check-in.
With Hospitable, preventing problems doesn’t mean doing more administrative work. You can request ad hoc verification for any guest who booked your property and confirm their identity without extra work. This helps assess potential risks before check-in.
You can also ask your guests to sign an Airbnb rental agreement right after their ID checks. Just create an agreement template, and Hospitable will populate it with guest and booking data to generate an agreement for each new reservation and add it to the guest portal as a registration task.
Your guest can review the rental agreement and sign it digitally. We will capture the timestamp, generate a unique document ID, and save the signed agreement as a PDF.
Accept direct repeat bookings to save on commission fees
Airbnb is a great platform to list your property when you start your hosting journey. Maintaining a strong presence in this global marketplace provides a unique opportunity to reach a broader audience and secure first bookings without investing in marketing.
Airbnb charges hosts a commission for each booking, so to maximize your revenue, you should also build a direct repeat booking strategy. You don’t need any coding skills to create a fully functional direct booking website with Hospitable.
Do your best to ensure your Airbnb guests enjoy their stay so they want to return next time, and encourage them to book directly with you.
Tools like StayFi allow hosts to collect guest data for direct bookings through WiFi marketing. With StayFi, you can create your own custom-branded WiFi splash page that every guest will use to log in to your short-term rental’s WiFi. This way, you can collect the contact information of all guests who log in to your property’s WiFi, not just the booker, and create an email list.
Use email marketing to stay in touch with your past guests and remind them about your property. You can send personalized emails with news, behind-the-scenes insights, and information about local events. Offer your past guests discounts or customized gifts to encourage them to book directly with you and share a link to your direct booking website.
Reusables & buying in bulk
You are expected to stock your property with the necessary Airbnb supplies to provide your guests with everything they need for a comfortable stay. Toiletries such as shampoo and soap, as well as washing-up liquid and other cleaning products, can all be refilled and purchased in bulk.
It’s an easy way to save money, and these small savings add up over time. You may also consider using multi-purpose cleaning products to save on supplies.
Damage & breakages
Without a doubt, you’re going to experience damage and breakages: glasses, furniture, ornaments, basically everything.
They’re unavoidable. But with a little forethought, they can be minimized.
Things like furniture, for example. What’s going to require more maintenance: an upholstered couch or a wipeable leather/PVC couch? The wipeable couch, right?
So, when preparing your home to welcome guests, it’s always a good idea to invest in durable furniture that’s easy to clean and maintain. Decisions like these can save you a significant amount of money over time.
Take flooring, for example. Carpets get stained and dirty, need to be cleaned regularly, and should be replaced when they are old and worn. Not only is this expensive, but it’s also a lot of hassle. A simple change to hard flooring solves all of this. It’s easy to wipe, hygienic, and virtually never needs replacing.
See more examples of this approach in our guide for reducing operations costs in short-term rentals.
Conclusion
Making money on Airbnb can be a rewarding experience, although it comes with some challenges. But with the right approach, operating an Airbnb can be very lucrative. By leveraging automation, you can establish a sustainable, passive income stream while managing your properties remotely.
Table of contents
Making Money on Airbnb: Maximizing Revenue
Optimize your listing to attract more guests
Respond to guests as soon as possible
Make your listing stand out
Optimize your pricing strategy
Increase your revenue through upsells
Use different channels to market your property to make more money
Making Money on Airbnb: Minimizing Overheads
Regular property maintenance
Save on taxes
Minimize the risk of dealing with problem guests
Accept direct repeat bookings to save on commission fees
Reusables & buying in bulk
Damage & breakages