Between changing bedsheets and checking-in guests I often peruse the listings of my fellow Airbnb hosts. Partly to get a feel for who’s charging what in the market, partly to steal ideas for making my listing look more attractive.
A very price sensitive market
How much of a price sensitive market is Airbnb? Very I feel. Especially at the sub £50 a night level. A simple search reveals a £5 increase per night from £35 to £40 the number of listings jumps from 149 to 317, more than 100% increase. For anyone looking to make some serious money being a airbnb host then this is not very encouraging.
I’m not going to get rich anytime soon from Airbnb
Being an Airbnb is not an easy path to riches. The level of competition in my city of London is so high that nightly rents are at rock bottom. Supply is currently well in excess of demand. Demand is rising quickly as far as I can tell; I guesstimate as many as 50% of my guests are first time airbnb users. It may take some time for either demand to equal supply or enough disappointed airbnb hosts give up on the hope of easy hosting cash.
I get the feeling I joined the airbnb hosting party a bit late (I started hosting late 2014). The market is saturated. In this persons blog post he make $22,000 in 132 days in 2103. That’s $169 a night. A quick look for whole apartments in London with a price per night of £100 are 3 bedroom apartments for 6 guests. Thats less than £35 per room. A normal long term 3 bed rental for those living and working in London is at the lower end £500 a week and there is no vacancy period and the tenant pays all the energy and cleaning bills etc. You might ask why bother?
Ideally you will have a 100% occupancy rate or near enough to have any chance of making a decent profit. Cutting your nightly rate to a rock bottom price can help you achieve full rental but can eat into your profit. I sometimes cut my prices to ease my cash-flow over a certain period. Less money is maybe better than no money. It’s surely easier to ensure your as full as possible as far into the future as possible. Don’t rely on last minute bookings to keep you afloat. For popular listings I suspect the average vacancy to be about 20%.
Reading this article in the Telegraph makes Airbnb hosting seem like easy money and even a lucrative lifestyle choice. The lady being interview charges £60 a night for singles and £70 for doubles in Oxford. Definitely at the top end for a private room listing for Oxford. I couldn’t find her listing in Oxford but a quick look at the empty calendars for current listings in that price range suggests that she has either dropped her prices or dropped airbnb.
Too many hosts and not enough guests
This airbnb group post says it all. If you can’t read it the hosts says her views have dropped to almost nothing and so have her bookings (she charges £300 a night for a whole apartment). A fellow airbnb host says she has dropped her prices 25% because of the competition. Another Airbnb hosts comments on another thread “too many hosts and not enough guests, thats the long and the short of it”