How to start an Airbnb in a pandemic

“It was the best of times, it was the worst of times.” Dickens may as well have been writing about Airbnb hosting in a pandemic when he penned this classic line. The truth is, Airbnb hosting is fundamentally different now. Travel is different. Covid has changed what people want and need when they’re away from home. If you’re wondering how to start an Airbnb today, it’s important to pay attention to these differences. To ignore them is to risk failing early and failing hard. In this post we’re going to cover some of those key differences, and share our 6 best tips on how to start and Airbnb in a pandemic (and still make money).

How to start an Airbnb in 7 steps

The steps that you need to take to start an Airbnb in normal times are no secret. You can find them on other sites. But what about in a pandemic?

In our experience, Airbnb success is not in the ‘what’ you do. Instead, it’s in the ‘how’ you do it. Especially in uncertain markets. The truth more than ever is, how you execute each of these steps below will ultimately determine whether you make money or lose it. You just can’t start an Airbnb today as though everything is normal and expect to succeed.

But we’ll get into that more as we go. Firstly, let’s start with the ‘what’ to do to start an Airbnb:

  1. Find a property to list. This is all about market research and due diligence. There are 4 paths to take.
    • a) you already own property and want to list it on Airbnb.
    • b) you want to invest in a property specifically to list on Airbnb.
    • c) you want to rent a property and list it on Airbnb (otherwise known as rental arbitrage).
    • d) you manage an Airbnb for someone else (as a cohost).
  2. Set the property up for Airbnb guests. This is all about the furniture, linen, utilities, appliances, utensils and everything else you need to host short term guest. It’s also about the condition of your property and how you turn it into a space that guests actually want to book and stay in.
  3. List the property on Airbnb. Once you have set up the property you have to list the property on the Airbnb platform. It’s a simple but extensive process and a good test of whether your place is actually ready for guests. Not all listings are equal. You need to target your guest and make sure you satisfy all of the Airbnb algorithm requirements to the top list of Airbnb searches for your area.
  4. Set up guest communications, nightly pricing, your booking calendar, and House Rules. These take time, research and thought. There are loads tricks to making sure you’re not picked off in peak pricing seasons, that you’re providing great guest experiences, and that you’re optimising booking opportunities.
  5. Organise cleaning, laundry, maintenance and restocking of supplies between stays. Can you run a 4 hour turnover between guests? Either you’ll operate the listing yourself or you’ll set up a team of people around you to help you. Some folks chose the hybrid option.
  6. Review guests. Reviewing guests will encourage them to review you back. Reviews are essential to get bookings from other guests. Lots of good reviews will also improve your ranking on the Airbnb platform.
  7. Monitor and manage. Rinse and repeat numbers 4 – 6. Monitor pricing, calendar settings and guest communications. Operate the Airbnb. Review guests.

This is all pretty high level but it gives you an idea of what you’re in for, if you’re thinking about starting an Airbnb. If you’re comfortable with the idea of these tasks, maybe hosting is for you!

In our experience – especially over the last 2 years – some steps here are more critical to your success than others. If you don’t get Step 1 right the remaining steps can become irrelevant. The rest of this post will focus on why that is and how to find the right type of Airbnb listing when you’re just starting out, so that you will make money. Even in the midst of a pandemic.

Let’s dive in!

The pandemic impacts on Airbnb – a tale of two market trends

The pandemic drove people apart. Physically I mean. Contagion thrives in dense populations. We all had to stay apart to stay well!1.5 meters distance in public spaces. Self isolation requirements and quarantine.

Contagion also drove us into lock down. Our travel was restricted. And when we could move around, snap lockdowns always had us wondering when we might be stuck somewhere and for how long.

These two recurring themes of the last 2 years fundamentally changed the Airbnb market almost over night. Global lock downs caused booking cancellations across the board. 90% of bookings were lost and it was bloodbath out there from April to June 2020. But what happened as the pandemic prolonged and people could move about, with restrictions in place? Let’s look at the US data…

1. Falling urban demand

Once of the major pandemic impacts was on urban centres. AirDNA data tells us that demand for Airbnbs in large cities fell off a cliff in 2020 (down 43% in the US). Not surprisingly, once initial lockdowns lifted people chose to stay clear of dense urban centres where all the ‘people’ were, for fear of getting Covid.

It’s not reflected in the data, but in our view it wasn’t just the population density that killed bookings in these locations. It was also the type of listings most typical in these areas: high-rise apartments. Shared ventilation, cooling systems, common areas, and elevators all became very unappealing to those who did need to travel.

2. Small city / rural renaissance

Small cities and rural locations are where people chose to travel to instead. To get away from population centres and harsh restrictions. Demand for travel to certain holiday destinations also picked up. Destinations with low populations, large and spread out properties with plenty of space to move about were exceedingly popular. Here’s the AirDNA data to back this up:

What about other countries?

Trends comparable with these were found across the UK and Europe in countries with similar paths through the pandemic.

Australia, because of the way it handled Covid during 2020 and 2021, didn’t see as strong a drop in urban demand for Airbnb stays. Cities like Brisbane and Adelaide were able to remain open, for the most part, at least to travellers from within their own state. But as in other countries, destination locations, smaller towns and regional locations were undoubtedly the winners in terms of demand for stays in 2020 and 2021. Once again, it’s all in knowing the numbers. With 71% of Australians living in ‘major cities‘, there’s just a bigger pool of travellers heading to the regions for holidays or time away.

What’s in store for 2022?

No-one has a crystal ball, but in an attempt to help you start your Airbnb income we’ve done some research, reviewed the data, and had a crack at some predictions for 2022.

What history tells us about how a Pandemic ends

According to this 2020 Washington Post article, the last pandemic – the Spanish Flu of 1918 – ended slowly. The virus – H1N1 – is still with us today. But people developed an immunity to it over time, and it became less lethal as the pandemic carried on in waves.

The key ingredient here, if you’re wondering how to start an Airbnb, is time.

If history is any guide, we think life will be uncertain for a while yet. Maybe we’ll continue as in previous pandemics to have waves of different Covid variants wreaking havoc until illness subsides over time.

So if you’re starting an Airbnb, expect people to make decisions accordingly. This includes decisions about if, when and where to travel and what type of accommodation to stay in. Think about how to start an Airbnb where bookings are insulated as much as possible from pandemic impacts. Understand the trends looking forward, so you can mitigate your risks and take advantage of new opportunities. Here are our 2022 predictions, based on AirDNA data and analysis.

Pent up demand for travel will play out (in waves)

We’ve all been wearing masks and staying home for 2 years now and WE’RE EXHAUSTED!!! It totally makes sense that people want to get out and about again.

According to Destination Analysts, “Nearly 80% of American travellers have trips currently planned in 2022.”

But we are also still worried about catching Covid. This survey data from Destination Analysts shows that 40% of Americans with intent to travel have cancelled or postponed a trip due to the latest Omicron wave.

So people will continue to want to travel. And the good news is that many Airbnbs are better positioned than hotels and resorts to take advantage of pent up travel demand. This is due to the type of accommodation typical of Airbnbs and in many cases, their dispersed location. Huzzah!

While we think guests will book more trips and they’re more likely to look to Airbnbs than to hotels and resorts, they’ll also cancel quickly if Covid safe travel is at risk. We know our cancellation rates are up since the pandemic due to traveller uncertainty.

The Airbnb ‘go rural’ trend will not end

Urban Airbnb demand in the US only recovered 8% in 2021 according to AirDNA, possibly due to the waves of new Covid variants like Delta and now Omicron upending travel plans. But that number means bookings are still down over 30% on 2019 levels. And that is enough to turn most Airbnb properties from a profit making venture to a loss making one. By our estimation, you’d need to have been booked at over 80% average occupancy in 2019 to sustain a 30% drop in bookings and still turn a slim profit. The average Airbnb occupancy rate in 2019 was closer to 50%. Supply of Airbnb listings in urban locations has dropped as a result.

Expect this theme to continue until people feel safe travelling to highly populated areas once again. AirDNA predict that demand for urban Airbnbs will not return until 2023.

We also think that if the pandemic goes on in waves, the Airbnb ‘go rural” trend will not end. Not just yet anyway. Be aware though that new supply has already moved into this market so you will find more competition for ongoing booking demand. If running a rural Airbnb listing appeals to you, leave room in your due diligence for bookings to drop off when the pandemic does end. Look at 2019 occupancy rates and nightly pricing on AirDNA to understand what your bookings might look like if ‘things return to normal”.

A new class of Airbnb guest has emerged: flexible workers

With waves like Delta and now Omicron, we’re predicting that flexible work arrangements will not phase out anytime soon. Employers just can’t have their staff all in one place and at risk of all getting ill. Diversifying staff accommodation is now a risk mitigation strategy. So there will continue to be a cohort of employed people who can live anywhere and still work remotely. We think that a portion of these folks will chose to move out of heavily restricted population dense areas, at least temporarily. They’ll situate instead in smaller cities, rural areas, or even in countries less impacted by Covid. And because they need temporary lodgings, flexible workers might just book your Airbnb to stay in.

AirDNA data shows an increase in the number of longer term stays (28 days +) to 15% of total bookings, which they attribute to flexible workers.

6 tips on how to start an Airbnb in a pandemic

Before 2020 there was no ‘right’ type of Airbnb property to list. If you put up a great looking property on Airbnb with good amenities you could make money just about anywhere. But Airbnb data during 2020 and 2021 shows that listing type now matters A LOT. Picking the right location and type of property is critical if you want to start an Airbnb in 2022.

Breaking down the trends, reading the data, and learning from our own Airbnb host experiences over the last 2 years here are our top 6 tips on how to start an Airbnb in a pandemic and still make money.

  1. Stay away from large city listings. We can’t see these coming back during 2022.
  2. Look at destination locations and rural areas. Just plan for booking demand to dampen at some point in the future. Factor this into your numbers!
  3. Small and mid-tier cities are a pretty safe bet during and post pandemic. We suggest looking for:
    • Mid tier cities people travel to for multiple reasons.
    • Gateway cities to regional areas as rural dwellers need access to major services.
    • Satellite cities with tourist attractions as lots of people can travel there by car.
  4. The type of property you list is now more important. Data shows that larger homes are more in demand as families fear snap lock downs in small spaces. Unique stays in less populated areas are rocking it. Stay away from small apartments in buildings with more than 2 stories.
  5. Make sure you can accommodate longer stays (28 days plus). Amenities such as wifi, cooking facilities, clothes storage, a washer and dryer, a place to work and an outdoor space are all really important to longer term guests. Proximity to services like medical care and supermarkets are also critical.
  6. Pandemic proof your listing. Make sure you have a property with a separate walk up entrance (no lifts), no shared utilities, no common areas, self check-in, and private outdoor spaces.
How to start an Airbnb
US data

The final word

The good news is that AirDNA data shows you can start an Airbnb in a pandemic and still make good money. Booking demand has increased for certain listings in certain locations with certain amenities, and so have nightly prices. But the data also shows that not all Airbnbs are equal during a pandemic. Where and what to list are now critical questions you need to answer before you start acquiring or setting up your first / next property.

If you want to learn more about how to start an Airbnb, bookmark our Airbnb Host Hub page where you’ll find out upcoming eBook on exactly this topic!

If you’re serious about starting an Airbnb you really need to understand the data and trends before you leap. We recommend using AirDNA. Their low-cost monthly subscriptions that you can turn off any time are golden.

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