3 Tips to GROW your Airbnb Business During a Recession
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One of the great things about a recession is that most people are operating from a place of scarcity. Obviously, if you could somehow GROW your business at a time when all of the competition is running and hiding, that’s a huge win.
Airbnb hosts and managers all over the world are having a really tough time right now. Hosts are struggling and they need help NOW more than ever. As things continue to get worse in the economy, that’s only going to become even more true.
More owners are going to turn to Airbnb as they need more income, and more travellers are going to come to Airbnb as a way to save money.
If you want to set yourself up to thrive while everyone else is in survival mode, you need to watch this video and implement what I’m about to talk about. There’s never been a more crucial time to get these essential skills nailed down.
For a long time, hosting a property on Airbnb and doing relatively well has been a walk in the park. The truth is, even “average” performance would have you earning far more money than a long-term tenant so it didn’t really take much to “succeed” on Airbnb.
Because of that, it meant that those of use who truly optimized performance were able to run circles around the competition and thrive. Now, the tides have shifted and the difference between average and outstanding is no longer “doing well” vs. “doing phenomenal”.
Now, the difference is dying vs. surviving. All of the hosts who were previously getting by and doing “well enough” using poor strategies are soon to perish. For that exact reason, hosts all over the world are about to need professional help now more than ever.
The opportunity with Airbnb and short-term rental is absolutely huge as it’s always been, and performing in this upcoming “season” is going to require 3 main things:
#1: A lean business model: Gone are the days of accepting thousands of dollars per month in liabilities. Gone are the days of being okay with unnecessarily high operating costs. It’s important during this time to operate a business that’s lean, mean, and nimble.
#2: An intimate understanding of your niche: You MUST understand the clients you serve, their challenges, and how you can best solve their problems. If you succeed here, you’ll unlock the door to thriving while everyone else is in survival mode.
#3: A rock-solid pricing strategy: As mentioned before, being able to perform when the going is good is something that anyone can do. In order to succeed now and deliver results to your clients, you need to know the ins and outs of optimizing your performance and pricing strategy on sites like Airbnb.
If you master these three elements, you’ll be able to grow your business now more than ever. The rewards will be great both now and in the future, however the path to get there is not one for the lazy.
If you want to take this OPPORTUNITY to expand rather than contract, then you’re in the right place.
Hey everyone, my name is James and in today's video, we're going to talk about three strategies that you can use to actually grow your Airbnb business in the midst of a recession.
So I'm going to share with you three tips that will help you to expand when everyone else in the business in the industry and honestly in the economy overall is contracting. The truth is that right now, Airbnb hosts need help from professional property managers more than ever.
And as we start to enter into recession, which looks like it's just on the horizon here and we're slowly entering into it now, that's only going to become more and more and more true.
I put together a whole separate video on this on my channel so you can go ahead and check that out as well. where I talk about why Airbnb as a business is quite recession proof and why it typically actually grows during the recession, like we saw when the company first got started in 2008 2009 2010.
Now, in this video, what we're going to do is we're going to talk about number one, why it is that Airbnb hosts actually need your help now. More than ever, and why now is actually such a great time. Now, obviously, in any business, if you can be expanding, while all of your competition is contracting, and everybody's in survival mode, and you can be in growth mode, and actually have, you know, be in your best interest and be practically feasible for you to do that, you're not going to take on a whole bunch of risk and making, you know, poor decisions in order to do that.
That's a really, really amazing place to be, you have a huge advantage, you have a huge ability to grow your business rapidly and experience some unprecedented results. If you're able to grow your business when everyone else around you is not focused on that. And they're just focused on survival.
So we're going to talk about why number one, why this is the greatest time right now to be helping post and why they need your host nap your help now more than ever, we're also going to talk about like I mentioned three ways three strategies that you need to implement into your business.
If you're going to enter into this upcoming economic season here and you want to really thrive if you don't want to be focused on survival and you want to be focused on money. growth, I'm really thriving over the next couple months and potentially couple years that are that are on the horizon here. And I'm going to share with you three key strategies to be able to do.
So. Lastly, we're going to covers, we're going to break down the economic impact of that, we're going to break down the numbers and really talk big, how it is that that shifts your business and the difference that this is going to make to your bottom line, and ultimately make to your pocketbook.
So without diving in a bit of delaying any further, let's just dive right in and get started. So the first thing I want to talk about is just why now it's such a great time, why hosts need your help now more than ever. Now, I want to be sure to really separate right now what I'm talking about, because there are two different things going on in the world right now.
You know, there's the whole chaos around, you know, the dow dow which shall not be named, it's going around the world. And then there's also the potential of an economic recession that's coming on Horizon.
Now those two things are very there's a cause and effect where one cause the other But they are quite independent from one another meaning that we can still be in a recession, even once everything is blown over without shall not be named. Right. And so if we enter into a recession, there's still going to be a really prosperous time a lot of potential for Airbnb, even though right now tourism is obviously ground to a bit of a halt.
And so if we look at it now what happens during the recession is that overall there's a lot less money in the market right so people everywhere need more money I'm sure you can relate to this I'm sure you've gone through yourself or at least you understand that a lot of other people have gone through this the last time we had a recession which was background in 2008 timeframe time period.
So when let when more people need money and they're tighter on their on their finances, then what happens in the Airbnb market is you look at the there's two sides of the business equation of Airbnb, there's Airbnb hosts, and for hosts This is a great way to make more money, whether they already have a property or they have, you know, they have it on long term rental, they can make more money on short term rental typically, or if they have a space that they want to rent out on Airbnb, and just to get some extra income coming in, that could be a spare bedroom in their home, it could be a guest house or whatever that might be.
And so obviously, when people are in tighter economic times, they tend to look towards things like sharing economy like Airbnb, in order to generate some additional income. So overall, the hosts on the platform, the number of posts on the platform is likely to grow and still go through a pretty, pretty high period of growth over the years to come if we enter into a recession. Now on the other side equation is the guests equation.
And so what happens is that in an economic recession, obviously travel is reduced because it is, a lot of times it can be a luxury expense. However, business travel is still a necessity necessary for businesses to operate and function properly. And people still are going to be traveling. The reality is travel and tourism doesn't just grind to a halt because of a recession.
It can come very close to that in what we're experiencing right now with this whole craziness going on the world but the recession is a different story. And that's not going to cause tourism to gradual haul. But what it is going to do is it is going to force guests to, you know, find cheaper accommodations, more affordable accommodations for their trip, they're going to be more budget conscious. And so enter Airbnb, a great way to get a lot higher value and a lot better rates save some money when traveling.
So overall, both sides of the equation will are likely to actually grow in the midst of a recession rather than shrinking. And so as more hosts enter into the market, what's going to get challenging is that there's going to be more and more hosts coming on. And these hosts are likely not have any idea what they're doing on the actual platform.
They don't know how to optimize their pricing, they don't know how to, you know, deliver the best quality stay to guests, they need someone like yourself, who can help them who can have those skills in their, in their, in their, you know, Book of things that they can deliver and who can really deliver top level results to them, because ultimately they need mine now more than ever they need to be prepared. forming.
And what happens is that as the space gets more crowded, it becomes more and more important, people didn't know what it takes to stand out and be able to implement those things. And so right now, there are going to be a whole bunch of posts likely over the next six to 12 months that are entering back into the market that are coming on as hosts and that are going to need professional services, professional people who can help them out to actually deliver outstanding results.
So if you want to be able to take advantage of that, and you want to actually grow your business during this period, rather than shrinking, tracking, like a lot of other businesses are doing, there's three key things you need to do. Number one, for any business to really be set up effectively and to grow during tough economic times. You need to have a clean business model.
This is not the time you're taking on a whole bunch of unnecessary debt, unnecessary liabilities and to have your costs be, you know, inflated and going through the roof and just trying to trying to win the game of the business by just growing as quickly as possible and spending a bunch of money to do that. This is the time where you want To be fiscally conservative, you want to be saving money aside, you want to be reducing your debt, reducing your risk.
Because ultimately, if you have less overhead, if you have less risk, then you're able to do things as a business that other companies just can't, you can deliver a higher quality service, you can grow more quickly.
And so just as a an overarching theme here, if you have previously looked at or previously considering, or even you're in the business of what's called a rental arbitrage, meaning that you rent properties for a fixed monthly rate, and then you flip them onto Airbnb, and now is a really great time for you reevaluating that kind of a decision.
Because with that business model, you're going to be constantly putting up thousands of dollars a month in rent, you're going to have this huge debt liability overhead every single month. And if times do get tight times, do do you know squeeze the pocketbook, so to speak, then you're going to have a really tough time, even just offering your business as is, let alone growing your business. Talk about an expensive business to grow. Y
ou've got First and last month's rent every time you want to bring on a new property, you've got to furnish the property, oftentimes, you have to pay a security deposit. So you're looking at five to seven to upwards of $10,000. Just to grow your business by one single listing to bring one new property on board and management, that's gonna be really tough to do.
And so, you're gonna want to look at alternative models, like for example, a management fee model, where you're collecting a percentage of the overall revenue, you might not make quite as much money and honestly, in most cases, you actually will, in most cases, you will make almost as much sometimes even more money under the management fee model compared to the fixed rent the rental arbitrage model.
And the really great thing is that you can bring properties on actually grow your business without capital upfront expenditures, you're not paying for rent, you're not paying for furniture, you're not paying a security deposit, because you're doing a revenue, share profit share with the property owner, you're not going to be footing the bill on those upfront expenses.
So you're gonna be sharing those with the property owner the property is going to take care of things like furniture, etc. etc. And so you can actually earn money when you grow your business right away. It's cashflow positive from the beginning, you're not paying off any debt. And the best part is that every single month, you don't have this huge overhead of several thousands of dollars in rent payments, it's looming over your head.
So you've got a much leaner business model, you're also going to want to focus on cutting costs wherever you can. If right now you're only managing one or two properties, you want it, you know, maybe they're your own, maybe they're managing for other people, and you want to start getting a little bit more lean, you might want to consider doing some of your own cleanings just to cut that cost down.
But you might want to consider bringing a clean team in house hiring someone on who can do the cleaning for you rather than contracting out to an outside firm to again, reduce your costs. If you've got welcome gifts you're giving to your guests. And again, you're going to want to look at those and eliminate them unless they're absolutely necessary right now.
Because if you can cut costs and you can become more profitable that way, it's just going to give you a lot more runway as a business and it's going to give you a lot more power and control and ability to actually grow over the next 612 24 months, however long it might be. And the important thing to remember right now is that cash is king.
If you can keep cash in your bank account rather than having it go out to expenses, it just gives you more flexibility, more peace of mind, more of the of the ability that everyone else in the market is lacking right now. Because right now people are losing cash in an economic recession, people are going to be losing cash, you expect to see a lot of these rental arbitrage offers going out of business over the next six to 12 months here.
And so the way to avoid that for yourself is to keep things lean and keep cash on hand because that is the lifeblood of your business. And so the more of it that you can keep on hand. And the more that you cannot risk by putting out rent, furniture, that sort of stuff, the better off you're going to be as a business overall. So that's number one is just keeping things really lean.
The second thing that you need to do the second strategy that you need to have in order to really excel in this kind of a time is you need to really, really deeply understand your niche. Understand the property owners that you're that you're serving, and what their challenges and pain points are.
Because at a time like this, that's rapidly evolving, right? You've got new hosts that are coming on to the onto the marketplace, you've got people that are going through different economic times. So the person that used to care a lot more about, you know, good communication, one keep kept update, and they were playing a game of just trying to maximize things. Now, they might be in more of survival mode themselves.
And so they may care a lot more about the dollars and cents, they may want to open up the calendar more, make more dates available in their for their listings, so they get more money rolling in, they might not want to, you know, invest a whole bunch of money into furnishing the place and they might want to just, you know, focus on how can we make the best out of what we've got right now.
We've got it set up pretty basically, we don't really want to be spending money on decorations. So you need to understand your niche in intimate detail. really understand that and also on the guest side of things, understand the guests that you're trying to serve you know in a timely Right now with everything going on in the world, you're going to be catering a lot more to domestic travelers, when there's a recession, you're probably going to be catering to a different a little bit different group of guests than you were typically used to with a given property.
And so you just need to understand that so that you can tailor your offer to your property owners and have more people saying yes to you get those conversion rates up, and have a really great value proposition for them.
So that because you understand what their problems are, and what needs it they have that you can solve for them, you're going to be able to better tailor your offer to them and make sure that it actually makes sense and that you can create that Win Win opportunity that on the other side of it, you need to understand what your guests Nisha is you know what those people are, they're booking your property so that you can tailor the listing specifically to them and you can get bookings because again, right now up until now, if you look at the last five years really on Airbnb, doing well on Airbnb didn't really take much.
You know, an amateur performer who kind of knew the basics could do quite well on Airbnb. And the reality is that a lot of those people were leaving hundreds, if not thousands of dollars on the table every single month, single month, they didn't even realize it. And quite frankly, a lot of them just didn't even care. Because times are really good. And so people were very greedy people just, you know, didn't really care. They weren't very fearful, they just let it go.
And it was okay. Because if they're performing better than, you know, having a long term tenant in there, that's fine. They're leaving some money on the table, then all good. Now, things are starting to get tighter. Now, if you are in that category, you were in that category and you don't change your ways. You're going from having an okay, you know, we're doing well enough to now we're not doing well enough at all.
Now we're falling below the bar, we're earning less money than we would with a long term tenant, we're drafts gonna perform, we're not paying our bills and times are really going to get tough for those people. And that group of people that before was really optimizing, they weren't leaving money on the table, they have the right strategies dialed in.
Those people are now any people that are going to be able to see by those people are the people that people are going to flock to hosts are going to flock to and come to wanting to know how to actually get those kind of results yourself. So you have to understand that niche.
And then the third thing is you have to understand things like pricing strategy, you have to understand how to optimize your listings. Because ultimately, all of this is for nothing if you can't actually serve the property owners that you work with. One of the biggest ways that you can do this is by understanding your pricing strategy.
I see people freaking out all over the place. Airbnb hosts, you know, right now, because they're not getting bookings, and a whole bunch of their bookings are getting cancelled, and they just don't know what to do. The reality is you should treat this time right now, if you're hosting on Airbnb, the same way that you would treat a low season you know, in your in Toronto, we have winter and in the wintertime, the demand goes way down.
Supply stays virtually the same, but demand for properties goes way down. there's not as many guests that are coming to Toronto in the winter as there are in the summer for obvious reasons.
So what we need to do as hosts in order to perform really well, we need to draw our prices drastically, we need to, you know, make some adjustments and tweak the the the essentials of our listing so that performs better in that low season, right now should be treated the same way. If you don't have bookings in your calendar, you need to drop your prices down.
Now, that doesn't mean freak out and drop your prices for six months into the future out of fear, it means that you need to get last minute bookings in right now. And that's likely going to mean dropping your prices quite drastically. And it means that you have to understand how you should be pricing your listing 345 and six months out in the future.
So you can make sure that you're not dropping your prices way down, you know, in three months time because you just held your prices too high or whatever else, and you're getting the top value you possibly can because you're not just undercutting your listing way out into the future when it's likely not going to be necessary. So if you are able to implement those three things, it's going to have a huge economic impact on you and your business.
Let's just break it down here. If we just Talk about having a lean business model number one, that's going to literally take 10s of thousands of dollars a month in overhead out of your business, if you're managing 1020 properties, that's literally 10s of thousands of dollars every single month that is not looming over your head, that is an all constant liability to your business that is not leaving your business on the brink of failure.
You know, as we're seeing right now, one or two bad months with that much overhead can be really catastrophic for business. So that alone is going to be able to save you 10s of thousands of dollars a month in overhead.
And by keeping your operating expenses low and keeping those lean as well, you're going to save again additionally, hundreds if not thousands of dollars every month by just keeping an eye on those expenses and keeping them really lean, not letting them get too bloated.
Now the next thing that you're going to be able to do is you're going to be able to get more clients by understanding your niche really taking the time to understand them how that core skill and really develop it so that you understand your niche you know the clients that you're trying to Serve better than anyone else that's going to allow you to actually grow your business to pick up new properties under management, when everyone else around you is losing them is contracting is shrinking their businesses.
By the way, those other companies that are losing clients left, right and center, some of them are going to manage themselves, some of them are going to go on to long term rental, and a lot of them are also going to look for other managers who can do a better job.
There's a huge opportunity here, because those people that were underperforming and are going to start losing clients, those clients have to go somewhere and a portion of them are going to go to people like us who have the right skills.
So if you understand your niche better than anyone that's gonna allow you to generate a bottom line of let's say, you know, one property a month, that means that you bring on one new property every single month just because you have that core, you know, core competency of understanding your niche. suddenly you've got $500 $1,000 a month that's being added to your bottom line every single month.
Over the course of a year, you can easily have 10,000 There's a month more on your bottom line than you did before. And that's just one property a month. Being able to grow your business, when everyone else around you're shrinking is insanely valuable, that can literally mean the difference between you staying afloat. And you've gone off like the rest of a lot of the businesses out there in an economic recession.
The third strategy, you know, having the right strategy to be able to optimize your listings performance, that's going to pay off huge for both you and the property owners you work with. That's how you keep clients around for long term, if you're producing results for them, they're a lot more likely to stick around with you. And so that's how you get longevity of your clients.
If you don't want to keep your clients for 234 years, rather than just having them churn every three or six months, you have to deliver those results. And so you have to really focus on those fundamental skills that are gonna allow that listing to actually perform. So if you can do all those three things, and again, those are very simple things they're not easy and quick to implement.
They're no quick fixes are no magic pills here, but they are just Three simple things that you need to do and you need to focus on over the next 612 24 months here, then you'll be able to grow your business throughout this time. You know, riches can be made in a recession. And this can be one of the greatest times and various opportunities to actually grow your business if you know what to do and how to act.
So if you're ready to do that, then I've left some resources down below, one of the things I left for you is a link to a free training that I put together that goes through the step by step of exactly how to scale your business. This is a strategy that's going to work in this economic time that we're about to go through right now.
So how can you actually grow your business systematically and be adding clients month after month, keeping those clients long term and operating lean operating a business model that actually makes consistent monthly income every single month like clockwork, so I put together a free training, it's really in depth we go into all the step by step tactics. If you want check that out. The link is in the description below.
And like I said, you can register for that training today. completely free. The other resource I left for you is something called my raw math calculator. So use that and just download the free Excel spreadsheet you can download to work out some numbers. And you can see for yourself the raw math behind getting to $50,000 a year $100,000 a year from managing properties on Airbnb and see what that journey would look like.
You can break it down for yourself, figure the numbers out and set your goal in there. Put your goal for how much money you want coming in monthly, or how much money you want coming in yearly and reverse engineer that figure out for yourself exactly what that will take.
That calculator is going to be free in the download. There's a link to download in the description below. So just click that check it out. You can download that completely free and just reverse engineer those goals because I find that a lot of people think that it's a lot harder than it really is. And it's going to take 50 properties to making you know six figure income when the reality couldn't be further from the truth.
So I encourage you to go check that out as well. And as always, if you Like this video if you've gotten value from it, if you want to, if you want check out more Airbnb related content that's to come and just click and subscribe to the channel here.
Go ahead and give this video a thumbs up. Also, if you found it really helpful, that really helps me out with the YouTube algorithm algorithm. So if you could just take a second to click the little thumbs up button there, give this video a like I would really, really appreciate that. Until next time