Direct Bookings & Paid Ads for Airbnb (Is it worth it?)

Start Growing your
BNB Business Today!

Get inside access to our professional courses, hosting community, and much more!

What's up guys? It's James here. And in today's video, we're gonna be talking about direct bookings, and paid ads to drive traffic to your short term rental property or vacation home, your Airbnb or VRBO, what have you. And I'm going to talk about whether or not it's worth it from a time and money perspective to focus on either direct bookings, or running paid ads to drive direct bookings to your short term rental. This is a really common thing that a lot of people they start listing their property on Airbnb VRBO, these OTAs. And then they wonder about direct bookings, hey, wouldn't it be great to save the 15% or so and list the property directly have you booked directly with us, and then we could just make more money. So I want to address that in today's video. If you liked this video, make sure you give it a thumbs up, make sure you subscribe to the channel here to stay up to date, we post two new videos every single week. And of course, as always, if you're interested in learning more about how to invest successfully in short term rental properties, and you want to buy properties that make really great returns from a cash on cash perspective, and make sure they cashflow really nicely for you supplement your income or replace your full time income with cash flow from short term rental investment properties. Make sure you check out the link in the description down below which we walk through all the details like this, on how to find the right properties, how to purchase them, how to renovate them, how to set them up, and how to optimize them and manage them and drive bookings, make sure that they get occupied, they stay occupied, they really generate really great return. So if you want to learn more about all that, then make sure you check out the link in the description down below for our free training on how to invest successfully in short term rentals. So all that being said, let's start talking about it. And let's break it down into two different categories here to start with first is going to be direct bookings. And then second, we're going to talk specifically about using paid ads to drive more direct bookings. So for starters, direct bookings are worth it with an asterix. So I think that direct bookings are worthwhile to do if you've already got yourself well established and set up on the OTA platform, so on Airbnb, VRBO, etc, because driving direct bookings is going to be a nightmare. As far as like the actual startup investment required, not just an investment, I'm not talking an investment of money, but just how much knowledge is required to set up a direct booking engine, when you're first getting started, it is so much more difficult to set that up than to just go on Airbnb go through, they're really nicely built set up tool to set your property up and get some initial bookings. So if you look at the friction to getting started, going and just listing your property on Airbnb and VRBO is hands down, the easier way to go, when you're first getting started. And it's gonna be the lowest hanging fruit, you're gonna get a great deal of bookings there. And ultimately, what I like to look at it as is really your when you pay that 15% to your to the platform, whether it's Airbnb, VRBO, what have you, that's essentially a marketing expense, right? Because you're going and putting your advertisement up there, but they're the ones that are driving all the traffic, they're the ones that have the brand recognition, they're the ones that are doing all the marketing campaigns are putting commercials on billboards up all this to drive traffic to listings just like yours, right. And so it's really a marketing expense that 15% is, and you get a whole bunch of extra bonuses for that you get their liability insurance, you get their support, you get that they they have a whole system for this to validate people's credit cards, they do all the payment processing, there's all kinds of value that you get, in addition to just the advertising, but the advertising alone, right is very, very worthwhile, right, you don't have to actually go and market the property, you can just listen on Airbnb, they market it for you get it in front of people. And so it's really worthwhile expense to pay, especially when you're first starting out to drive a bunch of traffic. And so that's what I recommend. Now, from there, setting up a direct booking website is rather easy to do if you integrate with the right channel management software. So I really love host away as a channel management software for this, that's one of the big reasons I recommend them to people is because once you have your listing fully integrated with host away, and you're at that point there where you've got it integrated. So again, this isn't something you'll do right off the very start. But once you have a couple listings, you're going to want to integrate with hosts away and you're going to want to then just do their like one click website creation. So it's really really simple and easy. You can essentially like one click just set up your your direct booking website, you can integrate it with a payment processor, like Stripe or square, and then you can accept credit card payments. And now you can actually take direct bookings, but that website is just gonna be a website in the void of the internet, no one's going to actually go there. And so then it becomes a question of how do you drive traffic there? Is it worth investing a whole bunch of time and energy into driving more traffic to that direct booking website? Not really honestly it's just not because if you think about it, what are you going to get a better return on your investment from doing you know, working out whatever active income you have that's generating you your your income, or investing in more properties like finding better deals going and find joint venture partners so you can scale more going in buying more products. properties that are going to give you massive leverage or driving a few, you know, direct bookings to the website, learning how to run paid ads, learning how to do all that. So you can make a couple extra $100 a year, right? Maybe it's a few $1,000 extra a year that you're going to make by driving direct bookings, really not that high leverage for the amount of time and energy that's going to be required. And there's also financial downside risk, right? If you go and invest into paid ads, then you're going to be you know, you're going to be at risk of now, having those paid ads not work, right, you also run the risk of now that you're processing your own credit card payments, what if there's fraud? What if there's a dispute that they make with their credit card after the fact you have to worry about all that, whereas when you book with Airbnb, when you have someone booked directly through Airbnb, you have to worry much less about all those other factors of you actually not getting paid. But you learn pretty quickly when you start accepting credit card payments, that there's things like fraud, there's things like dispute, there's things like refunds, that now become a really big issue. And that can jeopardize your merchant processing account. So you just run into a whole lot more headache that you're gonna have to figure out as well. You then also have to worry about, okay, how do we make sure that guests book with us they have the right expectations that you have to do all that, whereas Airbnb largely establishes that for you. So there's just a whole bunch more moving pieces once you start taking direct bookings. So I don't really recommend going and outwardly marketing yourself to too aggressively for that, if you want to start an Instagram account, things like that. Sure, that's a really nice way to highlight the property, get an organic following, not invest a bunch of money into it and get some direct bookings from that, right. And the really, the main leverage point that I see from having a direct booking engine is using it to generate repeat bookings, where you can basically just not have a marketing expense, and not pay that platform fee to Airbnb or VRBO. Right. So one of the really great ways to do this is to collect your guests, email addresses, in one way or another, we've got tips for that as well in the in the link in the description of that training. But we like to collect every single one of our guests email addresses when they stay at our property. And then what we can do is send out an email blast that directs them to our direct booking page where they can pay the same price as what they would on Airbnb, or oftentimes, what we'll do is actually give a discount. So they booked through through our direct booking website, they actually pay less than when they were to book it on Airbnb. But we still make more because we're not paying that platform fee to Airbnb. And so this is now a guest that you know you like you trust that you know that you had a good experience with them. So you don't have to relies heavily on Airbnb to do that vetting qualification don't need to like look for the guests reviews, things like that, because you know that they've stayed with you and you actually enjoy having them

stay there. Again, make sure that you have your own liability insurance. Still, because you can't be relied on just Airbnbs. Here, you need to make sure you have your own liability insurance that specifically protects you for short term rentals as a use case. And that goes for whether or not you're using your own direct booking channel. But then what you can do is send out these email blasts to give people a discount on staying with you as a repeat guest. And you still make more money because you're cutting out that platform as a middleman. So that's what I really like to do, because it's just so so easy to do. It's such a low hanging fruit, we have an automated system set up for how we collect our guests, email addresses and get them to provide their email address every time they stay with us. We can set up automated emails that go out to them after their stay promoting for them to rebook. And so the whole process, the whole thing can be set up in just a couple of hours, it can be completely automated, and it'll get some repeat bookings, save us some money in terms of really driving substantial traffic to that, or that direct booking website. I don't right now see a whole lot of value in it. I've seen people do it in the past, and I've seen them make money on it. But the question to me has always been like, is it actually worth the time and energy that you're putting into it? Because if you're driving it with paid ads, I've very rarely seen so far people that are able to do that and still make more money substantially more money, net of their advertising expenses as what they would get net of Airbnb is fees, right. So if you're getting $100 booking from Airbnb, and you're paying $15 of that to Airbnb, I've yet to see someone that can consistently get $100 bookings from paid ads for substantially less than $15 in advertising cost, right. And so it ends up that you kind of wash out. So if the if the thing that you're aiming to do is just fill up some of the, you know, blank spots in your calendar that Airbnb can't fill up, then to me, the obvious thing to do is just to advertise that listing on VRBO on booking.com on these other platforms to fill in some of those gaps and focus on driving more repeat bookings to fill in those gaps. If the goal is to make more money, I just haven't seen a really strong case, outside have some really unique properties that maybe don't fit on Airbnb or VRBO. That well, but honestly, that's so few and far in between, especially with the way that Airbnb has expanded, they now kind of cater to all different levels of properties from Lux properties to plus properties to normal properties, unique properties. So there's just not a really good case I've seen for why you should you know, spend your money on running ads so that you can drive direct bookings. Again, if you have a portfolio of let's say 1020 30 properties that you can drive have direct bookings to, you might get some leverage there where you can basically take just as much time essentially to advertise for 20 properties as you would to advertise to one, and be able to get 20 extra return on that investment of time. But for anyone that's only got, you know, five or less properties, I just don't really see it making sense, I haven't seen a great case for it, I'd love to be proven wrong. So if you have any thoughts you'd like to share with me in the comment section down below, on how you've been able to do this successfully, I'd be eager to see that. But from my experience, the average host who's looking at you know, one to five properties that they're managing their hosting is just better off focusing on really optimizing the platforms first, and optimizing their, their sort of their exposure by getting out on multiple platforms, not just being on Airbnb, but going expanding out to VRBO to booking.com. To these other platforms, I've just found that the return on your investment of time and energy is going to be much better when you just optimize the one platform that you're on. First off, so make sure that your photos are really great, your description, your headline, really optimize that dial in your pricing, all that stuff, then focus on expanding out to multiple platforms. So you can get more exposure, more demand for the property, optimize those platforms, then introduce a direct booking website and try to get repeat bookings from your repeat guests. At that stage, if you've got a bunch of properties, it may make sense in some rare kind of niche scenarios to really focus on using paid ads to drive bookings. But I just have have seen it be the case so so rarely, that I don't generally recommend it. So I know a lot of you will have been curious about that a lot of people ask me about it and asking my thoughts about it. I don't think it's a bad thing to do. I just don't think it's the best use of your time and your energy. Again, that's just my thoughts. Let me know yours in the comment section down below. And again, there's a link in the description down below for a free training on how to invest successfully in short term rental properties. So if you want to learn more about that, then just check out the link in the description down below. Check out that free training. I'd love to help you with that process. If you liked this video, make sure you give it a thumbs up. If you are interested in keeping up to date with this channel. We post two new videos every single week. So make sure you hit that subscribe button there. Stay up to date with the channel with all that said thanks so much for tuning in today's video and I'll see you in the next one.