Ep 51: Can an Airbnb be Profitable in the Age of COVID? Plus, What Elevators a Hundred Years Ago Can Teach Us…
If you’ve been considering Airbnb as a potential next revenue stream, I’m sure you’ve asked this question… “Can an Airbnb be profitable in the age of COVID?”
In this episode, I reveal what type of property is doing well despite the pandemic, how the overall short-term rental industry is performing, and I reveal the biggest lesson elevators a hundred years ago can teach us in this moment…
As with any venture, there can be risk.
But being a savvy business owner (and I would consider you take that mental approach even if you’re “just” renting out a room in your home)
– look for ways to mitigate the risk
As with any venture, there can be risk. (And to be clear, this is not financial advice. This episode, and all I share, is for your information only.)
Being a savvy business owner (and I wold consider you take that mental approach even if you’re “just” renting out a room in your home).
It’s still important to look for ways to:
1. Look for ways to mitigate the risk
2. And, to do what you can to stack the odds in your favor
Articles mentioned in this episode:
https://www.nytimes.com/2020/09/24/travel/airbnb-pandemic.html
And if you’re curious about how much you could potentially earn with an airbnb in your area, I can send you a free and pretty powerful tool to help you estimate…
Visit GinnyTownsend.com/rental to claim access to this powerful free tool!
EPISODE TRANSCRIPTION
What’s up Podcast Nation! Ginny Townsend here. And I’m so excited that you’re here. Now. I want to dive right into this because I feel like if you were to all entertaining the idea of having an Airbnb listing of becoming a host. I’m sure the question at the very top of your mind then it’s probably just consuming your mind is can I have an Airbnb that’s profitable in the age of covid in the middle of a pandemic?
So it’s a fantastic question and I respect that that’s you being a Savvy business owner right there. So let’s take a step back and actually see.
The bigger picture Okay. So an economy is what allows us to have something that’s profitable right. Now. What is an economy? An economy is simply a group of behaviors now when behaviors change so does the economy and then if you think about it, what are people’s behaviors based on and it’s their comfort level. So if people are comfortable staying at an Airbnb even during a pandemic
So they’ll go but if they’re not comfortable, they won’t interesting. Huh? So people just want to feel comfortable in their decisions that their people don’t like to feel like they’re idiots right or that there are making foolish decisions, but it’s all about helping people feel comfortable in their decisions. That is at the basis of an economy. So how do we help people feel comfortable in their decisions now, it makes me think of a story.
well I mean this really did happen but like of way back bout a hundred years when buildings started having elevators in them and at first, people were not comfortable using elevators it felt very out of control and rightfully so technically they weren’t in control they were used to the stairs it’s what they were used to it was the behavior that they were comfortable with and then when the building started bringing in an elevator attendant to open the door
way to close the door to push the buttons and so on that’s when people started feeling comfortable and made the decision had the behavior of taking the elevator more my nose was until I mean there are still some places obviously to have elevator attendance and that is obviously for the feeling of luxury at this point but once people in math started feeling more comfortable with the idea of being in an elevator the behavior of
In an elevator, attendants were no longer necessary, but it took that that adds to the experience to make people feel comfortable using elevators. Okay. I’ve I hope you can see where I’m going with this but let’s think about it. What is the elevator attendant that we could bring into our own Airbnb’s that would help them give them the best chance of being profitable and
we can actually see that taking place across the country and around the world? I really do think it is cleanliness and I know that sounds so basic and I really do hope that everyone who has an Airbnb listing has always maintained High cleaning standards, but I think obviously in this time I think at this moment cleanliness is the elevator attendant and Airbnb has created a new designation called enhanced clean. It is as the name.
One’s an enhanced cleaning protocol and if a host agrees to this, it is mentioned at the top of their listing and you know, it’s a very strict very standardized cleaning protocol. That’s it’s possible. It’s not out of the realm of possibility to achieve. It’s just you’re stating obviously your commitment to a high level of Sanitation like sanitizing and being extremely clean and if you don’t agree to this,
This what’s interesting is and I Tota totally makes sense to me, but Airbnb will block off the next it’s either 48 or 72 hours. Sometimes it depends between the two after a guest checks out that you can’t book people within that time unless you’ve done the enhanced clean. So I mean I think in my mind that makes me feel more comfortable engaging with an Airbnb engaging with a furnished rental. How about you right?
Okay. So now that we kind of got that like just let that percolate in your mind. Right like would cleanliness change your behavior, which would therefore change the economy of short-term rentals. Now, let’s take a look at some interesting insights. I found around Air B&B this year as you might imagine the less Urban less densely populated bookings are way up. So
If people are out in the outskirts of suburbs, or if they’re more rural.
That is its own form of social distancing. Right, so we can. It makes sense that those are the listings that have experienced much higher booking rates this year. And what I think is interesting is Airbnb bookings have outpaced the hotel industry in 27 different markets this year fascinating right? It’s an air DNA report, which I can link to I believe you need to buy a membership actually to view the whole thing, but that’s the gist of it right Airbnb bookings have
Outpaced the hotel industry this year, which says something I think to people’s Comfort level is just being in smaller places right now. Here’s something that I think is wildly interesting the average daily rate in July of 2020 the rates in 2020 were higher than the rates in July of 2019. So if $329 a night average versus 300 dollars respectively interesting, right?
Now here is also something that I think is.
Let’s go back to talking about the economy. How the economy is just a group of behaviors.
There is this I don’t know if it’d be considered mainstream but it’s a trend that we’ve seen a lot this year is traveling turn Nomad. So because people have been working remotely because schools have been remote there’s kind of not been this need to be at home. So people are getting stir crazy. They just want to change of pace renting another house however close or far away.
Just as a change of scenery has definitely it’s had its moment this year. Isn’t that interesting? And I think especially as a lot of schools continue to have some kind of element of being virtual I could see this obviously with families of school-age children. This could still be a trend that we see in the near future and something that I think is very interesting too is the average length
Length of stays has increased and I think this traveling turn Nomad theme even if it’s not for months at a time or a month at a time has had an effect on the the overall average length of stays it went from three point something it actually crossed over to four nights over the summer. I think that’s fascinating to me now, obviously as you might imagine, I’m not trying to paint the picture that that’s been all sunshine and roses for Airbnb this year and the whole obviously like vacation rental industry, right?
So I mean Airbnb had they pulled the plug on a couple of new offerings. They are planning to pursue and in the entertainment kind of space and their more experiences. They transition to having online experiences, which I mean they do internal representative says it’s been a success but they also laid off 25% of their employees this spring which I mean that’s you know,
What do you say after that statement? Right, but interestingly enough despite technically being in the travel industry. They’re planning to go public shortly. And so even though their evaluation I want to say went from Thirty 1 billion before all of this to 18 billion was the last I saw so I mean I do think is very interesting. I always like to see when companies go public like, what’s the thought process? How is the market going to take this and housing market going to accept it? Like what? Yeah, so I just think it’s so
Fascinating and I will continue to watch as this goes forward. So, obviously, with any venture, there’s going to be risk period but as a Savvy business owner and I would definitely ask you to consider taking that mental approach if you even if you are quoting just plan on renting out a room in your home always look for ways to mitigate risk, right and do whatever you can to stack the odds in your favor. So those are you know,
Protect the downside look to maximize the upside, right? That’s that’s up and to the right and I’ll definitely be breaking down more of what like those specifically can be the factors to mitigate the risk as well as to stack the odds in your favor that that’s little bit of foreshadowing of episodes to come but bottom line. Is it possible to host a profitable Airbnb in the age of covid and the answer is yes? It is absolutely possible. So I
Of in preparing for this episode and all of that. I came across several great articles, which I will list for you in the show notes and you can also go over to Jenny townsend.com to cast and if you prefer to be on a browser to go through those articles, so yeah and I’ll continue to add by the way, even though this will be posted on December 1st. I will continue to as I find articles.
That inform this topic. I will continue to link them there now and if you are specifically curious, so you’re like, okay great. All we need is an elevator attendant to kind of get through this season, right? And that’s enhanced clean. I believe at least and being in a less dense area. I also think is critically important to succeed with Airbnb right now. But if you’re curious to see how much you could potentially earn with an Airbnb in your area or in any other area frankly.
I can send you a free and pretty dang powerful tool to help you estimate. I have done some pretty robust in manual estimations before in calculating potentials with Airbnb and I found that this tool is always within about three percent of my own estimations. So I it’s I have no ownership of or affiliation whatever but I think it’s an incredibly useful tool if you’re looking at all into this space.
Ace so if you want to claim access to that free tool come on over to Jenny townsend.com to rental and then I will send you the link and we can go ahead and get started. Alright. Well, thank you so much again for joining me on this short, but I hope helpful episode and until next time continue to be up into the right.
