How much does an Airbnb stay earn you? Why vacation rental booking revenue is rising

How much does an Airbnb stay earn you as a host? We look at how earnings per reservation have evolved and the reasons why vacation rental booking revenue is rising, including:

How much does an Airbnb stay earn you?

The perceived value of a home-stay, and therefore how much a host can charge a guest, has evolved. The pandemic may have caused reservations to plummet, but while we can see below that through the first months of 2020 revenues were consistently around 5% up on 2019 values, the trajectory of revenue per stay has been greatly accelerated .

Airbnb stay revenue was understandably less predictable through the course of 2020; lockdowns, restrictions and health and safety. Globally, occupancy plummeted to as low as -75% of 2019 (week 13).

And yet, revenues kept rising. On average, 2020 revenue after the start of the pandemic was 19% higher than in 2019. And while we can see seasonal trends echoing 2019, as confidence further returned in 2021, revenue per stay has so far averaged 35% higher, around $740 USD.

So how has an international pandemic and resultant mobility crisis fuelled an increase in vacation rental stay revenue?

Why vacation rental booking revenue is rising

A night in a vacation rental costs more

Let's face it, in answering the question 'how much does an Airbnb stay earn you?' nightly price is likely to be your first enquiry.

So we've lived through a time of unprecedented mobility restrictions and reluctance. However, for those still mobile, the core characteristics of a vacation rental were undeniably more attractive than traditional lodgings: A low-touch check in to self-sufficient accommodation with the opportunity to be more flexible in location and isolation. And so, we began to see Airbnb hosts and property managers push their prices to capitilize on the determined demand.

While 2020 ADR began sub-2019, as light appeared at a potential end of the COVID-19 tunnel, in week 27 the average global vacation rental daily rate broke the 2019 barrier. What's more, it has since remained in excess of 2019.

2021 meanwhile, has so far registered an ADR 14% higher than the same period of 2019, and is in excess of 30% higher through the recent summer weeks. Average daily rate quite clearly pays massive dividends to stay revenue, but what other factors should be considered?

Stays are longer

Travel restrictions and requirements also make efforts involved with making a trip much greater. As a result less substantial, shorter trips have fallen by the wayside, and the length of short term rental stays has increased by 17% in 2021 compared with 2019.

Other things undoubtedly come into play here; people have had pent up leave and holidays to use for one. Furthermore, the % of the workforce able to work remotely - or from a rural holiday home - has skyrocketed. Both will have contributed to demand for longer trips.

So the cost per night is up, and the number of nights stayed on average is up - that'll do it right? As it turns out, there are a couple of other things to consider!

Different stays are being booked

These changes to the complexion of demand - longer stays, the desire for more space and independence - have also impacted the type of Airbnb being booked.
As people lean towards rural offerings with more space, demand for larger, contained properties has escalated, likely explaining the trends in our next chart.

Predictably, rate increases with number of bedrooms, however, in 2021 rates increased more for larger properties. Similarly, while in 2019 and 2020, houses were priced 13% higher than apartments of the same size, in 2021 the premium for houses grew to 23%.

And that rural shift is also important as increases in rates for non-urban stays are more pronounced. Finally, the greater proportion of domestic guests through the crisis will only have compounded the thirst for larger, more rural properties.

Cleaning fees have increased

As cases rose, so did awareness surrounding hygiene and exposure. As discussed, this impacted demand characteristics, but it also meant that cleaning fees took on a greater significance. Like so many things, expense is conflated with quality, and so many hosts took the opportunity to raise cleaning fees on their Airbnbs (and hopefully reassess their cleaning procedures also!).

In 2021, cleaning fees have been 14% higher. Whilst this trend may be short-lived, it has contributed to heightened vacation rental booking values rising and remains an interesting topic for property managers.

How much does an Airbnb stay earn you? Why vacation rental booking revenues are rising

Ultimately, guests are yearning for a different type of stay. More domestic travellers with more holiday to spend, more working flexibility and an appetite for larger, more rural and expensive property types mean that pricier stays are being booked for longer.

In turn, on the host side, the confidence in demand has grown, as has the premium paid for guaranteed cleanliness, resulting in rates and fees being increased.

So vacation rental booking revenue is rising. Of course revenue per trip doesn't necessarily mean increased margin and profit, nor does it mean that overall revenue is currently greater. However, as recovery continues to fuel a resurgence in demand, especially a certain type of demand, hosts and property managers can be reassured that they are earning more from an Airbnb stay.


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