All the eggs in one Airbnb – 1st part

View from an apartment we recently added in Venice

 

 

Tl;dr: a list of reasons why you should try to get bookings from multiple sources. In this article: quality and price are out of your control.

 

Let’s say that you are doing very well and are having a pretty easy life in getting you apartment filled in.
You say “I have my apartment in Airbnb and it sends me enough customers. I don’t need other channels”.

First of all let me congratulate with you: it means you did a good job in terms of apartment quality, location and pricing and probably more.

The Airbnb algorithm likes you.

That will allow you to get many good reviews and the Airbnb algorithm will like you even more.

Good for you.
Now, let’s analyze the things that are going well:

  • Good apartment
  • Good price
  • Good location
  • Good reviews
  • Good Airbnb search results

All the stairs are aligned and shine upon you!Before you plan an easy life forever let me ask you the following question: if one or more of these things change, will you still get many bookings? Let’s see what can change.

In this first article I’ll cover two aspects:

1) Good Apartment

This is the single most important thing you need to get right.
A good apartment is easier to sell.

If you keep maintaining it it will always be good.
If you rest on your laurels it will slowly get worse.

But let’s assume you’ll keep improving it. You learn from the feedbacks and you make things better.
Over time you’ll have an even better apartment!

Honestly, I’ve seen very few owners doing this over the years.
They spend a lot of money at the beginning and struggle to keep the standards later.

I have slept in countless apartments and only very few are actually improving over time.
One great owner is Veera from Tallinn: not only she keeps them nice and clean but she actually improved things over the years.
Where else would you find a first aid kit and so many toys for kids?

It has to be said that usually the best owners have apartments in average locations and need to make that extra effort.
Salvatore from Prague, great guy and owner, is another example.

BUT (<– see? I wrote it in capital letters), you don’t have control on what the others are doing.

The vacation rental business is so hot that sooner or later some big company with big money comes is and brings on the market a flood of perfectly-new-perfectly-located-perfectly managed apartments.

It’s going to happen in Japan soon: real estate giant enters vacation rental business. Good luck everybody.

So, now  your apartment is the same, but it’s  not the best anymore.

Also, instead of a big company there may be many new one-apartment-owners coming on the market in your area.

You know, there ARE many houses around yours.
What stops them from doing as you did as soon as they see the opportunity? You don’t have any competitive advantage or secret. You are simply renting an apartment.

My point is: you don’t have 100% control on the quality of your apartment, because quality is a relative concept.
If it goes up around you, you go down.

2) Good Price

This one is even more scary.
Prices change in a very liquid way.

Right now you are making money, i.e.  you spend much less than you earn.
Maybe you even make a lot more than you spend.

Recently an owner in Budapest told me that until a few years ago he would buy an apartment on credit, rent it to tourist and pay it off in 4 years of hard work.

Now it takes 8 years. Of harder work.

So, now your price is 100 € a night, you rent 300 nights a year, you earn 30.000 €.
You spend 10.000 € for cleaning, maintenance, check-ins and so on.

That means that your neighbour can do the same with an apartment which is exactly as yours and sell for 60  €, he’ll still make a 8000  € profit.

He will maybe rise prices when he gets reviews, but for now he’s taking away business from you.

Oh yes, you’ve got reviews and these are giving you and hedge, right? Careful.
Once he gets 3 good reviews he’s ready for the kill.

You’ve got 30 reviews? It does not matter.
30 good reviews are better than 3 but not THAT better.
Plus, and we’ll cover this later, it’s almost impossible to get 30 good reviews because of the unavoidable Crazy Guest.

Actually, when I see a SuperStar Apartment with many good reviews I stay away as it’s usually overpriced.
I’ll go for the 3+ reviews, the guy who is probably still working hard to get on top.

Of course, this is just me, others may think the same way, but the point here is that after the first good reviews which give you a great boost, the others need to be good to keep you flying.

But won’t make you fly much higher.

A proof of this? After 3 good reviews you can raise your prices. After 10 maybe a bit more. But try to rise prices after 30 and you’ll see if people are ready to pay more for an apartment which has 30 good reviews instead of 10.

So, the fact that you are doing well means also that other people will smell the money in the air.

Nothing stays the same, especially when there’s that unmistakable scent of easy money  in the air.

 

[Go to Part 2]

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