Since its creation in 2008, the American platform Airbnb has transformed (on a global scale!) the tourist accommodation sector, offering unique stays ranging from city apartments to the most atypical accommodations. However, the crucial question for potential investors and current hosts remains: is it still profitable to rent on Airbnb today?
The travel industry has experienced major challenges recently, especially with the global pandemic from 2020 to 2022. Nevertheless, the demand for unique accommodation experiences (and even described as “Icons” by Airbnb) is regaining strength, this which is a good sign for current and potential hosts. Airbnb sees an increase in bookings every year.
The profitability of an Airbnb depends largely on its location.
Properties located in tourist areas, cities with major attractions, or places with few hotels can command higher prices and maintain consistent booking rates.
On the contrary, properties in less popular or rental-saturated areas face stiffer competition and potentially lower earnings.
To assess the profitability of your Airbnb rental, you need to know and list all the costs associated with Airbnb management:
Finally, keep in mind that an Airbnb rental must not only cover these expenses but also generate sufficient income beyond these costs.
Success on Airbnb is heavily influenced by guest reviews and ratings.
Highly rated hosts (also called Super Hosts) can charge more and attract more guests.
To achieve and maintain a 5/5 rating, you must including investing in quality furniture, offering impeccable cleanliness and exceptional communication with customers.
Airbnb hosts often succeed with dynamic pricing strategies, adjusting prices based on demand, season, local events, and even day of the week. Using pricing software and algorithms can help maximize occupancy and revenue.
Here is a TOP 5 dynamic pricing software dedicated to Airbnb owners:
The appeal of Airbnb lies not only in the accommodation but also in the experiences offered. Hosts who create unique and memorable stays can stand out in a crowded market. This can include local advice, personalized touches or additional services such as guided tours or special equipment.
The Airbnb platform has also created special accommodation sections: icons, treehouses, OMG!, trending, play area ; or a space dedicated to the sale of unique activities organized by local experts (tastings, cooking classes, drawing/sculpture/photography classes, guided tours, sports or well-being activities, etc.)
It's important to distinguish your short-term gains (annual revenue) from long-term profitability (profitability of your Airbnb).
Although some hosts may see immediate returns, the true value of Airbnb hosting is often realized on the long term thanks to the appreciation of the property, the construction of a solid brand (thanks in particular to customer reviews of 4.5 stars and above) and the development of a loyal clientele (who may come back, recommend you or even rent your property directly and thus avoid the 15% commission from the Airbnb platform).
The travel sector (and indirectly short-term rental) is subject to fluctuations in the French and global economies. Economic slowdowns, new travel trends, regulatory and tax changes (particularly with new short-term rental laws): all factors that can reduce the profitability of your Airbnb.
Our advice: keep yourself informed and above all, adapt your strategy accordingly!
Investing in automation tools for reservation management, communication and cleaning schedules can save you a lot of time and significantly reduce your management costs. You can even do without the services of an Airbnb concierge!
Of course, for hosts who cannot manage their property(ies) themselves, hire a concierge or a real estate agency specializing in seasonal rentals, although expensive, can simplify operations and improve the guest experience.
Again, the most important thing is to prioritize the satisfaction of your guests to sustain your revenue.
Hosting on Airbnb can therefore still be profitable, but it requires a calculated approach. It's not just about owning one or more property(ies). You have to understand the market, manage operational costs, deliver exceptional experiences and adapt to change. Like any investment, there are risks and rewards. Those who stay informed, invest wisely, and continually adapt are best positioned to reap the benefits of Airbnb rentals in today's market.
