Airbnb’s revolutionary business model — which ranked the home-sharing company third in 2018’s Disruptor 50 list — has now dominated a total of 191 countries. And with its more than 5 million listings, 300 million customer reservations, and a value of $31 billion, it’s tough not to ride and surf in Airbnb’s rapid and continuous growth. However, it would not be an easy journey and will indeed take a lot of time and effort.
Setting up an Airbnb startup is not straightforward. You need to make a carefully considered plan first as it will provide you a clear idea how you should run and market your business as well as to see what other requirements you need to enhance it further.
To help you, we will discuss in this article some of the crucial elements entrepreneurs need to look after to start a profitable Airbnb business.
Make sure your space is allowed to host
Before you list your space, check first if it is legally permissible to be a host. There are laws, regulations and etiquette concerning hosting with paying guests and they vary depending on the location. In some cities, for instance, owners are subject to pay an occupancy tax. Landlords, mortgage companies, and condominium owners association often have rules and regulations regarding the matter as well. And say, your mortgage company caught you red-handed, they may subject you for additional fees.
That said, visit your local council beforehand or ask your landlord or mortgage provider about the legality of becoming a host. It is essential to ensure that your space or apartment can be used as an Airbnb host. Otherwise, you will be penalized for breaking the law.
Licenses & maintenance
- Business license. As what was mentioned above, it is critical to stay legal always. Some states and cities now require all Airbnb hosts to have a business license. As such, do not forget to apply and get one beforehand.
- Insurance. Incidents are unavoidable. And as an entrepreneur, protecting your property from unforeseen damage is crucial. Airbnb provides a free host protection insurance program wherein a host’s space is covered with $1million against any injury. On the one hand, it is only available in some countries like the U.K, U.S, and Canada.
If your city is not covered with the said insurance, contact a specialist broker or an insurance agent to get proper advice regarding the matter. And if you think that your homeowner insurance policy can help you cover such accidents, don’t be complacent because typically, it does not cover premises used for business purposes. Hence, the wisest thing to do is to get liability insurance.
- Cleaning and repair. Regular and thorough maintenance is another essential aspect of a successful Airbnb startup. It keeps your place’s quality, value, and host rating at a prominent level. Furthermore, if you are a not so busy person and you want to maximise your revenue, you can do the said tasks on your own. You can also opt to subcontract such tasks, especially if needed. It will, however, add to your expenses.
Pricing and listing
As what was mentioned, the home-sharing company has more than 5 million listings all around the world. And apparently, the competition is high. When it comes to listing, always remember this: describe your space explicitly but make sure that it will stand out as well.
To do that, try searching all Airbnb listing in and near your area. Check and take note of the amenities as well as the prices. After that, start writing your listing description. Make it as detailed as possible and make sure that you include any feature or amenity that makes your place unique.
Uploading detailed photos of your space would help you rank high too. You can opt to hire a personal photographer if you prefer. Or you can use the company’s professional photography services. It is, however, not free and they will deduct the payment on your first booking. Moreover, take note that the accuracy of your listing description can affect your host ranking both positively and negatively. If your details are not accurate and will only disappoint your guests, for instance, then chances are you will have a low ranking.
Optimise your host ranking
There are several ways to optimise your host ranking. Trustworthiness, on the other hand, tops it all. Customers often check if the listing is verified and if it has satisfactory reviews.
- Accreditation. Verification is one of the most crucial components for a new host like you. It will help your potential customer that you are a trustworthy host. As such, make sure that you update your profile. Add all essential and useful information like email address, mobile or telephone number, or Facebook page. You can post anything you want, as long as it will serve its purpose.
- References and reviews. Another essential component of a profitable Airbnb business is references and reviews. Again, its purpose is to build trust and to show to your potential prospects that your space is worth a try. You can start by posting references from your friends, family, and relatives, business partners, or co-workers. Apart from that, you can also ask other Airbnb members to write reviews.
While an Airbnb business is a plausible and worth-a-try venture, it would not be easy to compete with existing and established property rentals. It would cost you a considerable amount of capital, time, and effort to comply and complete all requirements.
Apart from that, you will need to have good market research as well as a well-thought business plan. It will allow you to have a clear concept on how you should manage your startup as well as to see what other necessities you need to improve it further. Otherwise, your startup will eventually fail.