Getting initiated into Airbnb

What does it mean to be a successful Airbnb host?

It’s been almost a year since I’ve been an airbnb host and I recently spent some time reflecting on the experience. Just like any other club, group, or tribe, there’s an initiation process. It’s a test, to see if it’s meant to be. Some parts of it are heavily saturated, making it very competitive. There are ways to double down on the beneficial aspects while minimizing the negative.

Operating on a scale generally allows for greater efficiency, lowering costs. My location has 4 bedrooms, 2 baths, 1 kitchen, and one huge common area that functions as the dining, chill, and office areas. It is also highly advantageous to minimize the amount of time that it takes to operate at full capacity, to further lower startup costs. Having 4 bedrooms allows me to further experiment on variables I had at my disposal. These variables, in order of importance, include nightly price, weekly/monthly discounts, minimum nightly stay, self-check in procedures, additional persons fee, cleaning fee, and provided amenities. Each of these variables cater to a different market and it is up to the host to decide which market they want to cater to.

  • nightly price
    • Higher price = premium
    • Lower price = frugal
  • weekly/monthly discounts
    • Short term vs long term
  • minimum nightly stay
    • Lower = more turnover
    • Higher = less clients
  • self-check in procedures
    • Lowers startup cost on client acquisition
  • additional persons fee
    • Accommodates for the additional maintenance cost associated with the additional person
  • cleaning fee
    • Accommodates for shared responsibility, lowers risk
  • provided amenities
    • Accommodates for shared responsibility, lowers risk

It is important to note that I would alter these variables according to external factors in order to accomodate for a certain type of guest, maximize revenue, and minimize operating costs at any period of time depending on priorities. Some of the factors include:

  • Periods of time with high operating costs (winter)
  • Periods of time with less overall demand (winter)
  • Periods of time with extremely high demand (festivals)

The most important variable to control in order to be able to take advantage of these seasonal changes is the length of guest stay. This is best controlled with the minimum stay requirement, the weekly discount, and the monthly discount. The price stays fairly constant but gets lowered 1 or 2 days before the weekend if there is no booking.  It is very important to pay attention to the suggested market trends for the different periods of time in your local area. Speaking of area, location is one the biggest factors that leads to your different types of clients. Others factors include physical layout of the listing, city vibe, and time of the year.

We can also take certain precautions to minimize risk. Most notably of my risks were financial. I was able to outsource my income so that my income goes further relative to the local economy. This gives me more time to cover operating costs when my Airbnb has periods of time when it might not be operating at maximum capacity.

Accomodating for failure and redundancy is very important. The self check in procedures accommodates for both of these significantly relative to the startup cost per client. This also allows for the check in procedures to be outsourced easily when needed. In my particular area, utilities can be unreliable. I have 2 forms of heating in my location. This also allows for flexibility, allowing me to further lower my operating costs by prioritizing one form of heating over the other, depending on demand. This flexibility allows for more control over the temperature of the various rooms, which leads to part of the vibe of the place.

TLDR: Leverage the features that the Airbnb platform gives you in order to adapt to the market.

http://transylvaniancoliving.com

2 thoughts on “Getting initiated into Airbnb

  1. Very helpful lessons and insights here. Thanks! Could you please clarify this excerpted passage:

    “I was able to outsource my income so that my income goes further relative to the local economy. This gives me more time to cover operating costs when my Airbnb has periods of time when it might not be operating at maximum capacity. ”

    The missing puzzle piece is that I don’t know what you mean by ‘outsource my income.’ Once I have that piece, I can probably figure out the rest of the paragraph. Could you give an example please?

    1. Sure!
      Rather than sourcing your income locally, I’ve chosen to outsource it.
      For example, I could teach English locally or I can outsource the job. I’d do that by teaching English online. Doing it online allows me to teach clients that are willing to pay more than the local clients.

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