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5 Things To Consider When Setting Up An Airbnb Business

If you have ever planned a business trip or vacation, you will be familiar with Airbnb. Initially known as “Air Bed and Breakfast,” Airbnb started in 2008 as a way for homeowners to make extra bucks for their second homes. Latterly, the company has grown massively, now hosting over 10 million guests all around the world. With the help of technology, Airbnb filled the gap between travelers and hosts, so that hosts can monetize their space, while travelers can choose to stay in a comfortable space and feel like a local, without compromising comfort. 

What is the target market?

Typical customers of Airbnb are searching for a more personal travel experience than what a hotel offers. Your customers might also be looking for a living space in places where hotel accommodations are not so readily available. Most customers will be looking for a brief stay, generally between 2-5 days. For hosts who offer their house, clients may be individuals, or groups staying for special events, which can be either personal or business-related.

How does Airbnb make money?

To learn how to run a successful Airbnb business, you must know how Airbnb itself makes its money: the primary source of Airbnb’s revenue comes from bookings and service fees. Depending on the size of the reservations, guests are required to pay around 6-12% of the service fee to the platform.

5 Things to Consider when Setting Up an Airbnb Business

Starting an Airbnb business sounds like easy money. But it’s not that simple. As your business grows, so will customer expectations. Hence, you need to make sure that you do some research to understand the market and customer needs, so that you can take your business to the next level in no time. Here are some important things to consider when setting up an Airbnb business.

1. Know your customers

Airbnb’s algorithm emphasizes the customer experience. The search results aren’t chosen randomly. There is a complex algorithm that works behind the scenes to bring you the results. Airbnb’s search algorithm is based on KPIs, which makes it imperative for hosts to offer guests a great customer experience. The way previous travelers have experienced the stay, and the way hosts treat them, actually plays a huge role in the decision-making process. The following are the different categories of the search algorithm:

  • Effortless booking: This is determined by how the host interacts with the guest and how fast they respond.
  • Quality of listings: Accurate and detailed information, high-quality pictures, guest reviews, verifications, etc. determines the quality of the listing.
  • Preference of guests: This is determined by the details of what a traveler is looking for.

What do these have in common? All of them are based on the experiences and requirements of travelers.

2. Foster trust among customers

It’s difficult to build trust among your customers through your online platform. If you plan to start a vacation rental business, building trust among your target audience should be your primary strategy. You have to make sure that the user experience is phenomenal and people get the right updates. Positive user reviews and online ratings are also critical to earn the customer’s trust and to generate leads. Indeed, transparency is the key to success in the peer-to-peer world. It is also recommended to build trust on the supply side.

Setting Up An Airbnb Business

Airbnb, in fact, has built a solution for backpackers around the world to find comfortable accommodation that is local, diverse, authentic, and inclusive. Instead of simply offering a shelter, Airbnb strives to offer an exclusive world where travelers can live in a place as opposed to simply traveling there. Airbnb transformed the method of booking accommodation; they offer a more authentic experience.

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We all know that online marketplaces thrive and die on trust. Building trust can be tough, especially in the travel industry. You may compensate for a bad travel experience, but the holiday of your customer is still ruined. In the online world, trust is mainly established through online reviews, but online reviews are tricky. Most sites become victims of fake reviews. If you are planning setting up an Airbnb business, ensure that reviews are moderated by your platform and it comes from actual hosts and guests.

3. Have a strong brand identity

Brand identity refers to how the business is recognized by its customers. The goals of your business must blend in with your brand image and brand identity. Make sure cultivating a brand identity is there in your Airbnb business plan. From the tagline to your logo, it communicates what a brand truly is and it is what differentiates you in the market. A strong brand identity is more than just symbols. Design your website as a platform that reflects your core values. Continue to listen to your customers while growing beyond the limits.

Here are the main elements of brand identity:

  • Vision and mission
Setting Up An Airbnb Business

A vision of a company is a future-based statement that tells your customers what you plan to achieve with the mission of your brand. A mission is entirely based on the present, and tells your customers about your brand’s intention. Both of these statements together should inspire and inform your audience.

For example, Airbnb beautifully communicates their vision and mission with the statement: “belong anywhere.” You can gain inspiration from their tagline and they prove that short, sweet, and concise statements can strengthen your brand identity, because they’re easy to remember and recognize.

  • Logo
Setting Up An Airbnb Business

The logo is a unique element that is a part of your brand identity. The logo must look great on different materials, from billboards to flyers. Airbnb has a minimalist yet meaningful logo that is recognised by anyone, anywhere. If you take Airbnb’s logo, it is a combination of four different symbols: a head to represent people; a location icon to represent places; a heart symbol to represent love; and an A for Airbnb.

  • Core values

In general, customers are interested in brands that they can share values with. Airbnb’s success comes from the essence of humanity. Just like big brands Google and Apple, Airbnb was also successful in creating a unique and strong business association that appealed to consumers in a way which hadn’t been seen on the market before.

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You could show your core values through your additional features. Allow customers not just to book vacations; let them create their entire vacation. Airbnb makes this possible with their “experiences and places” page. Airbnb also allows you to find activities like scenic hikes and activities near your location, which allows them to establish an identity that connects with people on multiple levels. While setting up an Airbnb business, ensure that you offer additional services that customers will love.

4. Automate tedious tasks

Businesses like Airbnb automate some of the tedious parts of property management to make the job almost effortless. By automating the most complex parts of your business, you save a lot of time and effort that you can channel to other areas of your business.

For example, you can use a platform that automates management tasks, messages guests, and synchronizes your calendars for multiple listings from different booking channels. As a new brand in the market, automating some of your tasks will eliminate the need to manually manage the bookings, adjust prices, and juggle different rental calendars.

5. Focus on strategic listings

The fundamentals you have to know if you are looking for ways on how to start an Airbnb business is to have a user-friendly and appealing platform that connects both hosts and guests. As your website is the first point of contact, it can be decisive in making or breaking your business. While a good title and description are extremely important for a listing, absence of a good image complementing the written text can break the deal.

Setting Up An Airbnb Business

When it comes to listings, images are perhaps the most significant element that prompts a customer to choose a place over another. Adding high quality and detailed images is one of the major factors in Airbnb’s success. It has a complimentary photography service which you can utilize to make sure your listing is professional and appealing to customers. As we live in an era where pictures and videos are often more significant than words, you must create a strategic listing by marketing the cool and unique features of your space. Keep the most compelling features alone in the description and let the pictures say the rest.

To wrap it up

We all perceive Airbnb to be an amazingly successful story, but that was not always the case. The brand has struggled and worked hard to get to the position it now finds itself in. Starting an Airbnb business is not easy. But if you familiarize yourself with the market needs, customer interests and preferences, and automating or outsourcing some of the tasks, it will make things simpler. The essential elements of a successful business like Airbnb are community and density. Airbnb types of businesses don’t work without the people who are interested in it being committed to the brand and trusting each other.