Airbnb, Inc. is an American vacation rental online marketplace company based in San Francisco, California, and was founded in 2008 by Brian Chesky, Nathan Blecharczyk, and Joe Gebbia. Airbnb is a shortened version of its original name, AirBedandBreakfast.com.
Airbnb can be accessed by its consumers on its website or via an app. It maintains and hosts a marketplace in which users can arrange lodging, mainly homestays, tourism experiences or list their properties for rental. Airbnb does not own any of the listed properties, it may profit by receiving commission from each booking.
Airbnb Occupancy Rate
The Airbnb occupancy rate can be calculated in regards to the number of booked nights divided by the total number of nights that your Airbnb listing was made available for booking and reservation.
For a more accurate representation of your Airbnb's occupancy, here's how to calculate the occupancy rate:
Occupancy Rate
Formula = Number of Booked Nights / Number of Available Nights. The number of Available Nights = Available Nights + Booked Nights.
Airbnb Rental Income
Airbnb rental income can adjust dramatically depending on your origin or where you're from, how often you rent out your place, the quality of your home, and the services you make available.
Airbnb Trends
The Coronavirus pandemic has significantly changed travel last year and looking ahead, those impacts will still be felt much into 2021. This year, travel will be less about traditional tourism and more focused on safe living, working, and connecting while away from home.
While, many in the Airbnb industry are back to accepting bookings and generating their income, owning an Airbnb can still be a profitable business in 2021. And to succeed as an Airbnb property owner, you need to be aware of the following Airbnb travel trends:
#1. An Increase in Domestic Travel
Due to cleanliness and safety concerns, domestic travel will become a major trend in the Airbnb industry in 2021. There will also be a shift to more socially-distanced and remote spaces such as cabins, cottages, barns, tree houses, and Cycladic houses. Domestic travel also continues to be favored over far-flung, international destinations, and travelers continue to prize cleanliness and safety more than ever, which in turn drives business to private rentals where contact with other people is minimal. Indeed, doctors say that private vacation rentals are generally a low-risk form of travel, especially compared with hotels.
#2. Stringent Health and Safety Requirements
Airbnb has come up with a set of compulsory COVID-19 safety protocols for both guests and hosts of Airbnb listings. These rules are based on the US Center for Disease Control directives and the World Health Organization. Health protocols such as social distancing, mask-wearing, and washing of hands are strictly observed to enhance safety.
The following are Airbnb enhanced cleaning protocols that a host must adhere to:
You must not host or travel if you suspect that you are sick or have tested positive for coronavirus within the past 30 days.
Regularly wash hands with soap and water. Alternatively, use a hand sanitizer that has at least 60% alcohol.
Common areas of your Airbnb income property such as kitchens and bathrooms must be cleaned and sanitized as often as possible.
#3. More Remote Workers Staying in Airbnb Rental Properties
Work from home (WFH) has become a popular work set-up in 2020 due to COVID-19. Due to this trend, many people are using Airbnb rental properties to test new cities and neighborhoods before making a permanent move. People are booking stays in locations that have wide-open spaces and immersive natural surroundings.
According to findings, remote work and schooling have altered traditional vacation periods, and even blur the line between traveling and meeting the everyday commitments of life.
#4. The Rise of Pod Travel
Due to the risk of COVID-19 infection, traveling in a ‘pod’ is going to be an increasingly popular trend in the Airbnb industry in 2021. This is where a group of family or friends take a trip together to minimize the risks of socializing with others. The participants can rent several cabins or a villa to stay together. And finally, so-called "pod travel," or, gathering in an isolated space with loved ones, continues to rise in popularity.
Airbnb Properties
Airbnb serves as an intermediary between those who want their space to be rented out and those in search of space to rent, thus it does not own properties. Currently, Airbnb has more than 6 million listings in roughly 190 countries around the world.
The first step is to become an Airbnb host and register your property by sending photos and descriptions of the space for rent. Once a property is listed with Airbnb, travelers looking for accommodation in the host area can view it.
Airbnb Market
Since 2010, Airbnb's market share has risen dramatically. Statistics from 2019 estimate that Airbnb now accounts for upwards of 20% of the vacation rental industry as a whole. With the entire market valued at roughly $87 Billion in 2020, this puts Airbnb's total revenue in the realm of $20Billion. Though the company began as a privately owned business, it went public in 2020.
Airbnb does not own the properties it offers for rent on its website, but rather generates its revenue through service fees to hosts and guests. In 2019, Airbnb was valued at 35 billion U.S. dollars.
Income Property
Airbnb and other short-term rental platforms can be very profitable, patience and willingness are needed to do the work to attract renters and make them happy. However, operating costs are likely to be higher than for a traditional rental property, and regulations have made investing in Airbnb hard or even not legal in many places. Make sure to do your research before investing in Airbnb.
Where to Invest in Airbnb in 2021 – “Famous Destinations”
Airbnb has listed many “trending destinations” in 2021, and if you want to ensure that you choose the best location for your Airbnb investment property, there are 7 major cities based on a survey with good Airbnb cash on cash return.
#1. Palm Springs, CA
Median Property Price: $595,597
Price per Square Foot: $328
Average Airbnb Daily Rate: $380
Monthly Airbnb Rental Income: $5,002
Airbnb Cash on Cash Return: 4.9%
Airbnb Occupancy Rate: 67%
#2. Richmond, VA
Median Property Price: $383,031
Price per Square Foot: $192
Average Airbnb Daily Rate: $137
Monthly Airbnb Rental Income: $2,705
Airbnb Cash on Cash Return: 4.9%
Airbnb Occupancy Rate: 62%
#3. Indianapolis, IN
Median Property Price: $268,899
Price per Square Foot: $124
Average Airbnb Daily Rate: $142
Monthly Airbnb Rental Income: $1,744
Airbnb Cash on Cash Return: 3.4%
Airbnb Occupancy Rate: 53%
#4. Durham, NC
Median Property Price: $362,750
Price per Square Foot: $201
Average Airbnb Daily Rate: $112
Monthly Airbnb Rental Income: $2,035
Airbnb Cash on Cash Return: 2.9%
Airbnb Occupancy Rate: 59%
#5. Greenville, SC
Median Property Price: $433,543
Price per Square Foot: $209
Average Airbnb Daily Rate: $137
Monthly Airbnb Rental Income: $2,224
Airbnb Cash on Cash Return: 2.9%
Airbnb Occupancy Rate: 57%
#6. Santa Fe, NM
Median Property Price: $663,937
Price per Square Foot: $305
Average Airbnb Daily Rate: $248
Monthly Airbnb Rental Income: $2,035
Airbnb Cash on Cash Return: 1.5%
Airbnb Occupancy Rate: 55%
#7. Boise, ID
Median Property Price: $605,193
Price per Square Foot: $270
Average Airbnb Daily Rate: $99
Monthly Airbnb Rental Income: $1,954
Airbnb Cash on Cash Return: 1.1%
Airbnb Occupancy Rate: 59%
*The above data is derived from Mashvisor’s Airbnb analytics.
CONCLUSION
With the existence of Covid-19 that is greatly affecting many parts of the world even now, the future of the Airbnb industry is still uncertain. However, with necessary preparations, a host can still run a short-term rental property this 2021. As in being resilient, Airbnb hosts were still able to generate revenue and have managed to keep high occupancy rates even during the pandemic.