If you have ever planned a business trip or vacation, you would be familiar with Airbnb. Initially known as “Airbed and breakfast,” Airbnb started as a way for founders to make extra bucks for their rent in 2008. Later the company grew so big hosting over 10 million guests all around the world. With the help of technology, Airbnb filled the gap between travelers and hosts, so that people can monetize the space and choose to stay in a comfortable space just like a local without comprising comfort.
Table of Contents
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 easily available. Most customers would 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 both personal and business-related.
How do Airbnb Businesses Make Money?
To learn how to run a successful Airbnb for business, you must know how businesses like Airbnb make money. The primary source of Airbnb’s revenue mainly 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 for 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 for setting up and 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 stage 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 great 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-peer world. It is also recommended to build trust on the supply side.
Airbnb, in fact, has built a solution for backpackers around the world to find preferable accommodations that are 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 way of booking accommodations; they offer a more authentic experience.
We all know that online marketplaces thrive and die in 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 Airbnbbusiness, 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 plans to be 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 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
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. Whereas a mission is entirely based on the present that tells your customers 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 this statement- Belong anywhere. You can gain inspiration from their tagline and they prove again short, sweet and concise statements can strengthen your brand identity as it is easy to grasp and recognize.
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 identified 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 had also been successful in creating a unique and strong business association that helped in creating a space in consumer minds.
Besides your logo and slogan, you can put your message forefront through your features too. 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 at 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 a lot effortless. By automating the most complex parts of your business, you save a lot of effort and time that you can channel to other areas of your business.
For example, you can offer a platform that automates management tasks, guest messaging, and synchronize 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 juggling through 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.
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 speak the rest.
To wrap it up
We all perceive Airbnb as an amazingly successful story, but that was not the case always. The brand has struggled to get to the position where it is now. Starting an Airbnb business is not easy. But if you familiarize yourself with the market needs, customer interests, 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 people who are interested in it are committed to the brand and trust each other.