With the current situation for the global tourism and travel industry, why is Airbnb still profitable for hosts and property managers in 2020? Watch this video to find out 2 main reasons driving the platform’s success.
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Right now in 2020, in the midst of a tourism meltdown and crisis on a level that the world has never seen before, Airbnb, a tourism-based company, is still profitable. And not just profitable, but it is becoming increasingly profitable, experiencing higher rates than it has in the past few years. Why is that? How does that make sense for it to be thriving instead of struggling?
When we’re talking about Airbnb being profitable, we aren’t talking about the company and CEO itself making more money. We are talking about Airbnb being increasingly profitable for us, the hosts and property managers making a living off of the Airbnb platform.
There is really a twofold reason that’s behind this increase, and we’re going to look at both of those reasons to really understand why Airbnb is remaining profitable despite (and actually because of) the current world situation.
It all goes back to simple supply and demand. Let’s look at demand first. Back at the beginning of the pandemic, demand for Airbnb properties went down fast. That made sense, because with a huge tourism crisis, it was expected for demand to go down as tourism and travel was on the decline.
But now, we are seeing an unprecedented increase in demand, and a huge uptick in Airbnb bookings in many places, especially in the US market. The first reason for that is the increase in domestic tourism we are seeing. People still want to travel, they still want a vacation, and they still need to get away. But because international travel is mostly at a standstill, domestic travel is increasing like never before.
Specifically, people are looking into vacations close to home, somewhere they can drive to in order to avoid plane travel. So we are seeing a large amount of domestic tourists within a 200-mile radius of their home.
What that means is there is a huge stimulus to the domestic tourism industry in the US, because on average, Americans spend $144 billion dollars on tourism annually. Normally, that money is spread out over many different areas and countries. But now, people are still spending money on travel, but that same money is staying within the US.
And instead of staying in a crowded hotel full of people, many people are interested in renting a private Airbnb where they can stay with their family to enjoy their vacation. What we’re seeing because of this is Airbnb bookings in the US going up dramatically in the past few months, with bookings actually increasing year-over-year from the numbers we were seeing last year.
In fact, one of the property managers we work with had her best month ever on Airbnb in July, bringing in over $16k on a single listing!
Now, when we look at supply, we can see a second reason why Airbnb is still profitable for hosts and property managers in 2020. Supply of Airbnb properties have gone down in recent months, meaning there is less competition than ever before on the platform!
When things started going bad early this year, many hosts were anxious, and we saw a large number of hosts remove their bookings from Airbnb in order to explore long-term rental options for more security. For those hosts who were struggling financially and needed to make ends meet, the safer route was necessary.
But now that Airbnb demand has gone up, the supply has remained low due to so many properties having been removed from the platform. When you combine those two factors together, you can see a really huge opportunity that has been created on Airbnb as a host or a property manager.
If you’re interested in this opportunity, even if you’re a total beginner, check out the link in the description for more information, and free tools and training to help you get started and see if it’s the right option for you!
