Is running an Airbnb business Profitable? Here is what you need to know?
With modern technological advancements, the sharing economy has evolved to help buyers and sellers transact businesses easily. The peer-to-peer industry allows users to share resources, which include the collaborative consumptions of products and services of shared ownership and value. Airbnb is a popular name in the peer-to-peer business world. An online rental business that not only connects hosts and travelers but also facilitates the process of renting.
On one side, the platform allows users to list their living space and earn additional income. On the other side, it allows backpackers to book homestays by local hosts, saving them money and offering an opportunity to live like a local in a new city. Catering to the on-demand travel industry, Airbnb offers convenient vacation rental services in over 190 countries across the globe.
How Airbnb make money?
Airbnb allows the free listing of properties and lets travelers search listed spaces and choose the best matches as per preferences. The Airbnb business model offers both bookings and transactions on the website itself. This is how the business generates revenue:
Commission from Hosts– Airbnb takes around 10% of commission from property owners for every booking they get.
Transaction fee from Guests- Airbnb charges a percentage of the fee as transaction charges from guests for every confirmed booking.
Promoted listings– Hosts can pay and listed as premium properties for better visibility.
Is running an Airbnb business profitable?
Airbnb received over $1 billion in revenue for the second quarter of 2019. However, how easy it is to make a profit from a website like Airbnb?
We know Airbnb did not have a smooth journey over the year since its start in 2008. Airbnb had its own difficulties, which might apply to any new business in the same niche. To understand how rental marketplaces make money, you have to understand how they work. Let us see in detail how easy and profitable running an Airbnb-like business is.
Determine your start-up costs
The most important part is to know how Airbnb works and determine your startup cost, which mainly includes the app development. The development phase itself divides itself into several stages and each has its own price depending on the complexity of the process. Though developing an on-demand vacation rental platform like Airbnb from scratch involves more effort, time, and money, an Airbnb clone script can help you to obtain the same at a minimal cost.
Why build a website like Airbnb from scratch when you can actually get a ready-made script with same functionalities at fractional costs. The cost to build an Airbnb like the website it using a ready-made script will cost you somewhere around $1000, apart from the additional costs of customizations. There are ready-made scripts in the market that come with several free add-ons like social integrations, social logins, pay pal integrations, etc. and you save a couple of hundreds more on the go.
A world where you can belong anywhere is the powerful slogan of Airbnb, which makes boundaries between different cultures look a bit simpler. A similar idea like this can transform the way a service presents itself when it comes to the right marketplace at the right time.
While Airbnb is just an online rental business that offers accommodation-booking services, it describes itself as a peer-to-peer marketplace. It is because Airbnb offers the same basic functionalities like any other booking platform, but with one significant difference. While most booking sites offer hotel rooms, Airbnb connects travelers looking for accommodation with people who want to earn additional income by renting their own living spaces.
Airbnb has two types of users- The guests, hosts, and admin who ensure the interactions between guests and hosts are smooth. The success of the Airbnb business model lies in the fact that the business can match the expectations of both guests and hosts while offering a seamless user experience to both.
Covering your bases
Once you have a fully functional platform, the next job is to get people to visit your site and make their listings. It involves having compelling photos of the listings. Having high-quality and professional-looking pictures of properties can influence the bookings positively. To achieve this, Airbnb has partnerships with thousands of photographers who help hosts putting up their properties in the most appealing way.
When hosts list their properties on Airbnb, they are eligible to use Airbnb’s free professional photography service. Hosts running an Airbnb are visited by professional photographers to get the properties framed and shot properly. Airbnb has revealed that great quality photos made a significant difference in their bookings and business growth. If you want to create an Airbnb-like website, make sure to have crisp, well lit, and composed images that accurately convey the look and feel of the space.
Airbnb is an on-demand travel platform for vacation rental opportunities all over the world. It serves as a tempting marketplace for property owners and travelers who tend to look for apartments. By offering captivating opportunities for both guests and hosts, Airbnb has changed the way people booked vacation rentals.
The actual scope of running an Airbnb business is that guests prefer homestays to hotels. The reasons for this are many, and the major one among this is the cheaper cost. Airbnb is much cheaper than hotel rooms and this varies based on the locality. It also offers you an opportunity to live locally in a peaceful and quiet space. When compared to a hotel where you can just see common images of similar rooms, Airbnb provides high-quality images and descriptions of the actual space. It also offers enormous diversity in terms of accommodations where you can choose to stay in castles, yachts, or even boathouses.
The scope of making great profits lies in the number of hosts and guests you can bring to your platform. The reality is that there are many benefits to running an Airbnb-like platform, but you have to invest time and perhaps some hefty money to reap in desirable profits from your business.