Before embarking on your Airbnb journey, it’s understandable you want assurances that…

  • The short-term rental property game is a lucrative opportunity
  • Airbnb represents the best opening into that opportunity for you; and that
  • Your efforts and investments will translate into riches and rewards to your satisfaction

Here are some facts and figures that should validate the Airbnb opportunity and what you stand to personally gain…

An Idea Unlikely to Disappear Any Time Soon

Since Airbnb’s founding in 2008, there have been over 250 million total guest arrivals to Airbnb listings all around the world. Total guests have grown more than 5,000x in under 10 years.

On any given night, 2 million people are staying in other people’s homes around the world on Airbnb. Airbnb currently operates across 81,000 cities and 191 countries. There are more than 5 million active listings globally on Airbnb - more listings than the top five hotel chains combined have rooms.

More guests traveled on Airbnb over the summer of 2015 than the entire populations of Greece, Sweden or Switzerland. 20% of the 600,000 people who went to Brazil for the 2014 World Cup stayed in an Airbnb. And throughout Thanksgiving 2015, one quarter of a million Americans chose to stay in an Airbnb too.

According to a recent Morgan Stanley report, half of those who used Airbnb in 2016 used it to replace a traditional hotel stay. In the graph below, you’ll see how the search term “Airbnb” has now caught up to the same search volume for traditional hotels (e.g. Hilton and Marriott) as well as travel-booking brands (e.g. Expedia).

Airbnb also remains the more cost-effective option, with an Average Daily Rate $16 cheaper than hotels ($160 vs. $176).

Travel and tourism now account for almost 10% of global GDP ($7.2 trillion in revenue), making the sector bigger than the oil industry. Airbnb also benefits from the rise of the sharing economy and increased adoption of (both travel-specific and general) digital platforms. In 2016, the number of sharing economy users in the US was 44.8M. This is expected to almost double to 86.5M by 2021. In 2014, the number of US adults using lodging-specific sharing economy services was 7.7M. This is expected to almost triple to 19.3M by 2020. As for Airbnb... In 2016, the number of Airbnb users was 30.4M. That number is expected to double to 60.8M by 2021!

Within the US, the number of Airbnb homes almost doubled in Los Angeles, New York, San Francisco and Washington throughout 2015. In cities like Paris, San Francisco and Seattle, the size of Airbnb’s host and guest community have now exceeded 20% of the general population. And throughout 2015, there was a 259% annual growth rate of people staying in Airbnb properties whilst on work trips.

These impressive statistics are reinforced by Airbnb’s stellar brand awareness. Airbnb's consumer awareness sits at 76%, ranking it above almost all other online vacation booking portals for consumer awareness, and exemplifying why it has become one of the world’s leading accommodation websites.

By 2020, Airbnb’s revenue is projected to be as much as $8.5 billion, which would place it at #325 on the Fortune 500 and make it more valuable than other blue-chip companies such as News Corp, Charles Schwab Bank and JetBlue Airways. These funds will fuel its continued growth and entrench its dominance within the vacation rental industry.

Gain Additional Income

You’re probably thinking… that’s great for Airbnb, but what’s in it for me? Well, if you’re like the majority of other Airbnb hosts, then the primary motivation for listing your home on Airbnb is to gain an additional and lucrative source of income.

Airbnb hosts now receive an average of $174 per guest arrival, representing an 11% increase from 2016. An Airbnb host renting out a full two bedroom apartment or house in a major US city can expect to earn an average annual profit of $20,619, and your typical US Airbnb host (across all property types and rental offerings) makes an average of $7,300 each year.

An Airbnb host renting out a full two bedroom apartment or house in a major US city can expect to earn an average annual profit of $20,619. Click To Tweet

US Airbnb hosts make more than 2.5x the average incomes of Uber drivers, and far surpass the incomes of other sharing economy service providers on other platforms too (eg. 6x the average incomes of Etsy users and 9x the average incomes of Fiverr users).

So how do hosts from all around the world use this supplementary income?

  • 53% say it has helped them stay in their home
  • 48% say it is used to pay for regular household expenses (like rent or grocceries)
  • 6% say it has been used to start a new business

And here are some of the ways that hosts in 10 big cities all around the world use their Airbnb earnings…

  1. Amsterdam: 30% say the money they earned using Airbnb has helped them launch a new business or pursue a new project
  2. Barcelona: 53% say it has helped them stay in their homes
  3. Berlin: Hosts spend 48% of their Airbnb income on essential living expenses, such as rent or mortgage payments
  4. London: 63% say their Airbnb income has helped pay bills they would otherwise struggle to pay
  5. Los Angeles: 33% say they have avoided eviction or foreclosure by hosting their homes on Airbnb
  6. New Orleans: 71% say their Airbnb income was used for typical household expenses like rent/mortgage, bills and savings
  7. New York: 62% say their Airbnb income has helped them stay in their homes
  8. San Francisco: 42% use their Airbnb income to pay for regular living expenses
  9. Sydney: 60% say that their Airbnb income has helped with monthly rent and mortgage costs
  10. Toronto: Hosts spent 39% of their Airbnb income towards paying monthly mortgage and rent payments

So how much do hosts all around the world make? How many guests are visiting their countries looking for a place to stay? And how frequently are hosts renting out their homes? Here are some current numbers and figures to help gain a ballpark perspective of the opportunity for you…

These figures tell only part of the story. Current and prospective hosts often want to compare the money they could make on Airbnb against their financial obligations like rent or a mortgage. On average, a typical Airbnb host in a major US city is able to pay 81% of their rent just by listing one room in their two bedroom home on Airbnb. What about renting out their entire place? Below is a revenue-to-costs comparison for 50 US cities.

SOURCES: Airdna, Apartment List, RENTCafe   |   METHODOLOGY: See bottom of page

There’s an entire section dedicated to pricing your place which will provide you with detailed insights into how much you personally stand to make by renting out your home on Airbnb.

But if Airbnb is something you’re considering with any degree of seriousness, it’ll be worthwhile doing some back-of-the-envelope calculations of your probable costs, likely revenue and potential profitability.

When it comes to costs, think about the “hosting essentials” you’ll need to stock and furnish your place with. Some of these will be one-off costs associated with starting up your Airbnb; such as furniture, bed linen and dinnerware. Others will be recurring costs such as rent, utilities and laundry.

When it comes to revenue, don’t just think about how much you’ll be charging for each night, but also how many nights you anticipate your place will likely be occupied (your “occupancy rate”). Will you have a weekend vs. weekday rate? Will you offer a weekly or monthly discount? Do you plan on charging a cleaning fee? All of these things will influence how much you stand to make and may also vary at different times of the year or by season too.

Social Benefits

Beyond the allure of making money on Airbnb, many hosts simply enjoy the opportunity of sharing their home with interesting people from all walks of life. Airbnb provides the opportunity for hosts to form connections with colorful personalities they would otherwise not have met.

Unlike hotel-stayers, Airbnb guests are not looking for “cookie cutter” accommodation options. Many guests are looking for more than just a roof over their heads – they’re also looking for experiences and an opening into local cultures and communities too.

In fact, 79% of Airbnb guests claim that they choose to stay in an Airbnb so they can live like a local

79% of Airbnb guests also specifically want to explore a particular neighborhood and 89% of guests said that they choose Airbnb because it was more conveniently located throughout the city than hotels. And as a side benefit, Airbnb guests choose to stay 2.1x longer in their destinations than non-Airbnb travelers.

All of this adds up to an opportunity for not only turning a decent profit, but also having some fun and meeting interesting people along the way too.

METHODOLOGY FOR AIRBNB PROFITABILITY, INCOME & EXPENSES TABLE: To calculate the Average Monthly Rent + Utilities, this single figure was first separated into two expenses: (1) Rent, and (2) Utilities. Rent was calculated as the average of the Median 1BR rent and Median 2BR rent for each respective city. Utilities were then estimated to be 20% of this new averaged monthly rental figure. All other data was acquired directly from the sources listed (as at 07/17/18).

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OTHER ARTICLES IN THIS SECTION:

What Type of Airbnb Host do you Plan to Be?
Legality and Regulations to Consider
How Safe is Opening up Your Home to Strangers?
Create a Space that Will Appeal to Your Target Guests
Essentials for Your Home
Smart Homes