Why Is Airbnb Still Profitable in 2020?
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With the current situation for the global tourism and travel industry, why is Airbnb still profitable for hosts and property managers in 2020? Watch this video to find out 2 main reasons driving the platform’s success.
Right now in 2020, in the midst of a tourism meltdown and crisis on a level that the world has never seen before, Airbnb, a tourism-based company, is still profitable. And not just profitable, but it is becoming increasingly profitable, experiencing higher rates than it has in the past few years. Why is that? How does that make sense for it to be thriving instead of struggling?
When we’re talking about Airbnb being profitable, we aren’t talking about the company and CEO itself making more money. We are talking about Airbnb being increasingly profitable for us, the hosts and property managers making a living off of the Airbnb platform.
There is really a twofold reason that’s behind this increase, and we’re going to look at both of those reasons to really understand why Airbnb is remaining profitable despite (and actually because of) the current world situation.
It all goes back to simple supply and demand. Let’s look at demand first. Back at the beginning of the pandemic, demand for Airbnb properties went down fast. That made sense, because with a huge tourism crisis, it was expected for demand to go down as tourism and travel was on the decline.
But now, we are seeing an unprecedented increase in demand, and a huge uptick in Airbnb bookings in many places, especially in the US market. The first reason for that is the increase in domestic tourism we are seeing. People still want to travel, they still want a vacation, and they still need to get away. But because international travel is mostly at a standstill, domestic travel is increasing like never before.
Specifically, people are looking into vacations close to home, somewhere they can drive to in order to avoid plane travel. So we are seeing a large amount of domestic tourists within a 200-mile radius of their home.
What that means is there is a huge stimulus to the domestic tourism industry in the US, because on average, Americans spend $144 billion dollars on tourism annually. Normally, that money is spread out over many different areas and countries. But now, people are still spending money on travel, but that same money is staying within the US.
And instead of staying in a crowded hotel full of people, many people are interested in renting a private Airbnb where they can stay with their family to enjoy their vacation. What we’re seeing because of this is Airbnb bookings in the US going up dramatically in the past few months, with bookings actually increasing year-over-year from the numbers we were seeing last year.
In fact, one of the property managers we work with had her best month ever on Airbnb in July, bringing in over $16k on a single listing!
Now, when we look at supply, we can see a second reason why Airbnb is still profitable for hosts and property managers in 2020. Supply of Airbnb properties have gone down in recent months, meaning there is less competition than ever before on the platform!
When things started going bad early this year, many hosts were anxious, and we saw a large number of hosts remove their bookings from Airbnb in order to explore long-term rental options for more security. For those hosts who were struggling financially and needed to make ends meet, the safer route was necessary.
But now that Airbnb demand has gone up, the supply has remained low due to so many properties having been removed from the platform. When you combine those two factors together, you can see a really huge opportunity that has been created on Airbnb as a host or a property manager.
If you’re interested in this opportunity, even if you’re a total beginner, check out the link in the description for more information, and free tools and training to help you get started and see if it’s the right option for you!
What's up guys? My name is James and in today's video I want to discuss why it is that Airbnb is still profitable in 2020. Despite everything going on in the world right now, seems pretty counterintuitive that Airbnb would still be profitable at all. Airbnb hosting would be advantageous in property management will be profitable right now.
And understandably, a lot of people think that it's not. And so it stands to reason that people will be kind of curious and wonder like, why is it profitable? And why is it How the heck is it possible that in a lot of places, especially the US, it's actually more profitable and more successful to be hosting on Airbnb managing properties on Airbnb than it was a year ago, two years ago, three years ago, right now, in the midst of a total tourism meltdown, the likes of which the world has never seen before. I know it doesn't make a lot of sense. So I want to kind of walk through exactly how that works, and why that's happening, why we're seeing that in this video here today.
Now, as always, if you're interested in learning more in depth about how To manage properties on Airbnb there's a link down in the description below to a free training that I recently put together that walks you through step by step of exactly how to start managing properties on Airbnb even if you have no experience and how to do it without any hard costs, any upfront expenses anything like that and do it starting from complete scratch if you're a complete beginner without any experience at all on Airbnb in any in any capacity so if you want access to that free training and some some free tools that will help you to get started along that path, then just click the link down in the description below to check that out in greater detail.
Now, to dive right into I want to just start by explaining why it is that Airbnb is still profitable, and why and a lot of areas like in the United States, Airbnb is actually more profitable than it has been in previous years. Now I'm not talking about Airbnb as a company. I'm talking about Airbnb in terms of Airbnb hosting or managing other people's properties on Airbnb. So we're not talking about the big, huge, multi billion dollar company Airbnb I'm talking about us hosts on Airbnb s a little guys who want to make a living, you know, it's still very possible For us to be hosting on Airbnb and still very profitable for us to be managing properties on Airbnb right now. And so the reason for that is twofold.
There's really two different factors at play. One is an increase in demand for Airbnb s and another is a decrease in supply for Airbnb s and so I want to kind of address both of those and dive into those a little bit more detail. Now the demand is a pretty easy one. Basically, when everything first started getting really crazy with Airbnb, the demand for Airbnb s went down most people would expect that it seems pretty obvious tourism kind of ground to a halt and so naturally you would expect the less people to be booking Airbnb s makes total sense. And now what we're seeing is a huge drive up in Airbnb demand.
People are booking a lot more Airbnb, especially in the US but in different parts of the world. We're seeing a huge surge in demand for Airbnb ease, and a lot of people are questioning why that's happening and how that's even possible when tourism is at the lows. It's out right now. And the real answer to this there's two parts but the main driver is really simple domestic traffic What we're seeing is that because people can't travel internationally, people are choosing to travel domestically in America, like in a lot of other places in the world. It's really, really challenging to travel right now internationally to go and spend your money in Europe and Asia, Australia, wherever else Americans would typically travel to.
Now, in an average year, Americans spend, they're the second the world's largest spenders on global tourism. They spend about 140 $4 billion every single year on tourism related expenses. That's a lot of money. And usually that money gets spread out all over the entire world. Americans would typically go travel to Europe, they go travel to Asia, they go travel to Australia, they go to Canada, all over the different place, North America, South America, you name it, that hundred and $44 billion gets spread out all over the world and sprinkled everywhere in a typical year. Now what's happening now is an Americans can't do that. They can't go and travel to all these different places.
So that hundred and $44 dollars 440 $4 billion in tourism spending doesn't get to be special. sprinkled all over the world right now, what happens is that now we've got Americans that still want to travel, people are stressed out, they want to take a break, they want to get away, but they can't get on an international flight. And a lot of them don't even want to get on a domestic flight. So what we're seeing is very ultra like hyper domestic tourism taking place, and people are still spending a lot of money. Now, because Americans have such a huge buying power.
When it comes to tourism. A lot of people are spending a lot of money. It's resulting a lot of stimulation in the US tourism economy. We're seeing a lot of domestic travel happening. And usually people that are doing vacations and holidays within about 200 miles or less from their home. They're driving there in other words, so they're booking some pretty close to home stays. And we're seeing that that number is going up. In recent months, we've seen more bookings on Airbnb in the US than the same time period of 2019. It's pretty crazy to think that year over year from 2019, we're seeing more bookings on Airbnb in the US because all that Domestic tourism is really stimulating things.
Now, another factor like I mentioned, there are two factors at play here, the main one being that domestic travel and the second one being that just a lot of people do not want to stay in crowded hotels right now. So for those people that are booking domestic tourism, Airbnb tends to be the option of choice that tends to be the ideal. The ideal solution to that because people don't really want to be in a crowded hotel with a lot of other people. So those two factors have basically basically resulted in a huge steep increase in the demand for Airbnb s right now.
We're seeing students all over the world. But a lot of them in the US who are having extreme success right now and Airbnb and having their best month ever. We had a student recently you had our best month ever in July brought in over $16,000 on one single listing in one single month just in July of 2020. So that's pretty huge. Now again, if you're interested in getting started, you don't know where to start. You want to do it without any hard cost and you want to do with that. Having experienced there's a link down below in the description to the free training that will walk you through exactly how to do that step by step.
Now like I mentioned there are two factors increase in demand which is caused by that domestic travel and also by people not wanting to be in hotels but there's also a decrease in supply meaning that if you have a property that you list on Airbnb right now, you're likely to face much less competition than you normally would. Same goes for if you manage someone's property if you start managing properties on Airbnb right now, you're gonna have far less competition than you normally would. The reason for this is quite simple as well. Basically what happened when everything started getting really crazy a couple months back, a lot of people left Airbnb in favor of greener pastures in favor of long term rental, but there was a much safer bet.
And they were unsure about when it made the most sense to to be back on Airbnb against they decided to take the safe route and go over to long term rental. In fact, this is something that I recommended that people do if they weren't in the position to really wait things out. Because there was a lot of uncertainty, I recommended that if need be, then people should take that safe, safe route and list their properties on long term rental. After all, if you need the money to get by, then you are better off taking the safe route than taking the riskier high reward right. Now what's happened is that a lot of people have opted to do that, and rightfully so. But that means that there's a lot less properties a lot fewer properties on Airbnb right now. So you combine the fact that there's more demand than ever before for properties on Airbnb right now.
And the Combine that with the fact there's actually been a dip and a drop in the number of properties on Airbnb right now. And that creates a really big opportunity, obviously, because there's more people wanting fewer listings that creates a huge, huge level of competition. People want to get listings, and they're really fighting to book them. So prices are going up because people are willing to pay more for them. We're seeing places being booked out months in advance for higher rates than ever before. So that's really lending itself as well to this big boost and why we're able to see people having record months on their properties and but get 30 out of 31 days book get $16,000 for a single property in a single month like, those numbers are pretty crazy. And that's why they're happening.
So that's basically my breakdown on why Airbnb is still so profitable to be in as a host or as a property manager right now, in 2020. Despite all the craziness that's going on, despite tourism seeming like it's at an all time low. Now, what's true is that international tourism is at an all time low, but to counteract that domestic tourism is at an all time high. So in places where there is a huge amount of domestic tourism happening, you're seeing a really big boost. It's really good for us. In other smaller countries where there just isn't enough of a population, the population doesn't spend enough on tourism each year to really stimulate its own travel economy. You're not seeing the same thing.
So countries like China, countries like united states are doing really, really well. Other countries, smaller countries, not so much. So for any one of those smaller countries. That doesn't really have active domestic tourism right now. You're gonna want to look at many Managing properties internationally, which you can easily do. Again, we talked about that in the free training link down below. So you can manage properties remotely, this goes for anyone but you can basically live somewhere and then manage properties in a totally different part of the world if you have the right systems, right strategies to be able to do that. So that's going to be your best option.
If you're not in the US, if you are in the US, then you're gonna want to manage properties in the US it's a really great opportunity right now. And where you do that could be where you live, it could be any other area because like I said, remote management is totally possible. But again, you just want to make sure you have the right system to do that. If you want to learn more about that and you want to get a couple of free tools that will help you to make that transition make that the growth of your business really easy. And just check out the link in the description down below.
Check out that free training, we're gonna send you a couple free tools as well along with it, so highly recommend checking that out. Again, I hope this video has been really helpful to you and clarifying why it is that Airbnb is still profitable despite everything going on. I know it's pretty counterintuitive, but hopefully now after watching this video, you understand it a little bit better. Also if you liked this video, please give it a thumbs up clicking that little like button does help me out a tremendous amount with the channel just helps me out with YouTube's algorithms.
If you just take a quick second and click that like button, I really would appreciate it. Also if you're new to the channel and consider subscribing if you got value from this video and you want to see more like it. We post two new videos every single week relating to all things Airbnb and making money on Airbnb. So if you want to get notified when those new videos go live and you want to kind of stay up to date