By Peter Abualzolof
The Airbnb "phenomenon" has widened the sharing economy culture and is becoming more accepted legally and socially. The results are proving to be lucrative for hosts and for travelers, who are now enjoying the extra space for a lower price. Despite some controversy, Airbnb is revolutionizing the hotel business; similar to what Uber did to the taxi business. Airbnb has also created a rise of Airbnb investors and a new industry targeting Airbnb users and hosts.
Changing the Hotel and Travel Game
Airbnb has changed the hotel and travel industry by changing the way guests travel and by giving anyone the opportunity to be a host and make additional income. Travelers benefit from an authentic local experience by staying in a private home instead of a hotel. They are able to feel what it is like to live in a city, rather than just feeling what it is like it to visit. However, the experience can be completely unique from local life because of the ability to discover properties and homes that might have never otherwise been heard of, such as the Mushroom Dome Cabin or The Seashell House.
Whether listing a rare property in the middle of the woods or an extra bunk bed, anyone can host on Airbnb. Some have even bought homes just to list them on Airbnb, creating an increasing number of Airbnb rental properties. The international platform makes it easy for people to post their listing and profile, welcome guests from all over the world, and then get feedback from reviews. The number of Airbnb reviews actually helps increase a host's occupancy rate. The review system is not only helpful to hosts, but to travelers as well because reviews provide comfort when selecting a listing.
Inviting Investors to Play
Now one might ask, "Hotels make money, but do Airbnb hosts?" Some hosts have been able to pay 93% of their monthly rent from sharing their space. They are able to make this type of extra income from the convenience of their own home.
Yet, hosting has been even more rewarding for those renting out entire properties, allowing some host investors to make over $20,000 per year. Some have gradually come to this level; first starting off by listing a room in their property to hosting an entire property. For those who put great efforts, they end up hosting multiple properties. Hosts have been able to capitalize on their Airbnb nightly rate because it is more than what their daily rent or daily mortgage payment would cost.
Related Startups
Fortunately, a flock of resources has emerged adding value for the Airbnb community. For investor hosts who want to determine if Airbnb or traditional leasing makes more money, many have found that they can do so by using Mashvisor. It is an online platform that provides real estate predictive analytics and can forecast if an investment property will have a higher return on Airbnb or through traditional leasing. The analysis also includes pricing, occupancy rates, seasonality trends, revenue potential, cost assumptions, cash flow calculation, and financial and purchase investment analysis to enable investors to make intelligent investments.
To determine prices for the rental, hosts use sites like Beyond Pricing which automatically adjusts and sets prices for hosts, similarly to the technology hotels and airlines use. Beyond Stays is an Airbnb property management company that takes care of bookings, cleanings, maintenance, and concierge services. This startup claims a property will make 30% more by using their services.
Some startups have been successful by offering to resolve minor but difficult issues like key exchanging and housekeeping. Lockitron is a device created by the startup, Apigy, and allows hosts to lock and unlock deadbolt locks from a remote control or through the app. Handy is a home cleaning and home improvement company in and has become popular in Airbnb community.
Here to Stay
It seems the Airbnb revolution will continue to dominate as the sharing economy continues to flourish all over the globe. It has created a means of providing millions of people with additional income that would have otherwise been lost. It has also created a way of uncovering areas that would have otherwise never been seen. Although not a perfect model, Airbnb has created a domino effect motivating tourists, hosts, and companies to try or create something new
Guest, host, company, or investor – Airbnb is changing the way we do things we do things.
