According to iPropertyManagement, over 2 million people stay in an Airbnb every night, and over 7 million properties are registered on the platform (iPropertyManagement 2020). Not bad for a little company that began in Spring 2007. Originally, Airbnb was meant for low budget travellers trying to squeeze a few extra miles into their travel plans by sleeping on couches. In fact, the name Airbnb evolved out of the concept of an “air mattress B&B”. Now, it has become a powerhouse in the travel industry worth US$18 billion (Value according to IPropertyManagement after COVID-19 lockdowns). That’s still a lot of zeroes. Using a proliferation of fast Internet and smartphones to its advantage has empowered everyday Kiwis to generate an income from their property.
Airbnb hosts can now be found in over 191 countries and more than 100,000 cities across the world. Like the Uber of the travel world, Airbnb provides travellers with a greater variety of options at a wider range of price points. However, more importantly, it allows New Zealanders to turn anything – from that spare bedroom to that investment property “out in the bush ” – into an income generator.
What is Airbnb?
Airbnb is a community-driven and moderated marketplace where hosts are empowered to advertise their spare space to potential renters. That space could literally be a bed in a dorm room, a boat moored to a jetty or an entire 5-star residence. Hosts and renters are both reviewed on their space and conduct accordingly. Airbnb continues to expand and offer new features – like Airbnb Experiences rolled out in 2016 to enable locals to offer unique experiences, and activities to tourists – plus Airbnb for Work.
How much does it cost to be an Airbnb host?
Listing your property on Airbnb is free, and you can opt to offer your space for any price you desire. Airbnb acts as the middleman between the host and the renter, mediating any issues, governing minimum requirements, offering protection and providing the forum through which both parties can rate and review each other. To sign up to be an Airbnb host, simply head to the page, click the sign-up button and follow the prompts.
How does Airbnb make money?
When someone books your room, Airbnb charges a standard host service fee of 3% of the listed price, which can slide up to 5% depending on the cancellation policy you set. So, if you set a cost of $300 for a room per night and someone stays a single night, you receive $291, and Airbnb receives $9. Airbnb also charges a guest service fee to the person who rents the space of between 6% and 12% depending on the length of the stay, the listing characteristics, the final subtotal and other undisclosed factors. However, this fee affects the guest only, not the Airbnb host.
The pros and cons of being an Airbnb host
There are plenty of benefits to being an Airbnb host and a couple of negatives you need to be aware of.
- It provides an income stream from unused space.
- Airbnb provides a social platform through which you can meet and engage with people from all over the world and even make lifelong friends.
- It can be a fantastic experience for those already in or considering entering the hospitality or travel industry.
- Airbnb gives you complete control over your listing: how much you charge, who stays there and when it is available.
- The additional income can free you from your own work commitments and give you more time for recreation, hobbies, vacations or family.
- There is a larger community of hosts on Airbnb in which you can immerse yourself. Hosts can engage with each other on the Airbnb forum and have face-to-face meetups.
- You can develop an additional income from your skillset or your day job by expanding to offer an Airbnb Experience.
- Many hosts love the process so much that they embrace it to the point of making a career change.
- Earn “Travel Credits” to put towards your own homes/experiences bookings.
- You must always deliver on the service and features your promise in your listing to maintain your reviews and reputation.
- You need to respond to all enquiries in a timely fashion.
- A stranger is in your home, potentially sharing a space with you. However, remember you can look up their reviews before they stay and vet them for potential personality clashes.
- There may be extended periods in which you don’t receive a booking.
- Your property is going to experience wear and tear, which you need to address.
- More listings could appear in your area, requiring you to add features to your space or be more competitive with your pricing.
- If you are looking to sublet, you may need to get permission from your landlord, or split the profits.
- Guests may need to contact you or need to talk while you are in the middle of something, which may disrupt your life.
What is the Host Guarantee, and how does it protect Airbnb hosts?
Letting a stranger onto your property always comes with an element of risk and fear. Airbnb seeks to guarantee peace of mind for hosts with protection in place, for free, for all bookings. The Host Guarantee ensures any property damage that is caused by a guest is reimbursed; this is up to US$1,000,000.
Note: The Airbnb Host Guarantee does not replace insurance that may cover your valuable contents, your pets or even yourself. The Host Guarantee does not protect any cash you have in your home, animals, your personal liability or any damage to property in shared or common areas. That last point is essential to remember. If you have items in your house such as jewellery, art, technology or similar, then proving your guest damaged them can be hard. You should retain your current home and contents insurance policy to ensure that these items are fully covered.
There is a secondary programme that Airbnb Hosts are also enrolled in as soon as they list their property. That is the Host Protection Insurance programme, which protects you from claims made by your guests of up to $1,000,000. This could be about property damage or bodily injury, for example, a guest falling down the stairs and breaking their leg.
How and when does an Airbnb host get paid?
With Airbnb, the host is free to charge whatever they feel is right for their space. Airbnb is effectively a middleman that then takes a 3% commission from the amount you, the Airbnb host, set. Airbnb sends you your money, via the payout choice you select, 24 hours after check-in time, unless you are a new host. If you have an Airbnb guest staying for 28 nights and over, you are still paid 24 hours after the Guest’s check-in time, and then you are paid every 30 days after this for the duration of the guests stay.
However, even after Airbnb has made the payment, other elements can delay the process. For example, weekends or public holidays, or other processing delays. Processing delays may occur for:
- Bank transfers (in NZD) 3-5 business days
- PayPal (in USD): In 3 to 4 hours
- Payoneer Prepaid Debit MasterCard (in USD): In 3 to 4 hours
What should you charge for your Airbnb listing?
It’s never easy to work out what something dear to you is worth to an impartial eye browsing through the listings in your region. Seeing your property from a guest’s perspective – potentially a foreign guest with different cultural values – takes plenty of research and lots of listening. Here are a few factors to consider:
- What is the demand in your area? Search and see what the availability is like for spaces similar to yours. Demand determines whether you need to price competitively or not.
- Examine the relative prices of other Airbnb properties in your area. Find some that have similar offerings in terms of location, rooms and features and see what prices they are charging. Are they booked out? Is your space better or worse?
- Establish the estimated daily water, electricity, gas and Internet usage, plus other amenities in your space. In particular, if you have any unique features that consume a lot of electricity, such as a heated pool, spa or air conditioning, you want to factor that cost into your profit line.
- Do you want to entice longer stays by offering a cheaper mid-week rate?
- Have you considered seasonal changes? Perhaps in periods of high demand, you won’t have to be as competitive with your pricing?
- Did you or do you need to do any renovations or repairs to get your Airbnb property ready, and does that impact the following point?
- What is the tipping point at which hosting your space isn’t worth your while? It’s worth knowing this so that you don’t set unrealistic expectations.
Landlord vs Airbnb host
It’s safe to say that if you set yourself up to be an Airbnb host, you are not looking at renting out your property – at least in its entirety – in the traditional fashion to a tenant. If you are looking to buy an investment property for Airbnb, it’s wise to consider the property’s location. While the Airbnb service thrives in many locations around New Zealand, in others it may not. In these locations, you need to do your due diligence to understand the number of travellers that could come past your desired location. Renting out your investment property to a tenant may be a better source of income. Consider whether demand outstrips supply? Do you supply something unique to the area, such as the best view of Mount Taranaki, the best proximity to popular sights like Mount Cook or an awesome feature like a spa under the stars?
Can renters be Airbnb hosts?
Anyone in New Zealand can request to be an Airbnb host, as it is free to sign up, but if you rent the property that you plan to list, you’re entering a grey area that you’re wise to negotiate correctly. Subletting through Airbnb is permissible by the Airbnb host programme, but may not be through your lease, landlord or another organisation related to your property. For example, an apartment building might set its own rules that landlords and therefore, tenants must follow.
If you’re considering subletting a property you rent through Airbnb, there are some simple steps you can take to ensure that everything stays above board.
- Let your landlord know. There is a clause saying that subletting requires written consent from the owner for many new leases, so why not ask for it? Be prepared to explain what parts of the property are to be used by potential guests and what your terms will be on Airbnb. For example, you may say “not suitable for children”. Be sure to let them know that any guests are covered by Airbnb’s $1,000,000 Host Guarantee and $1,000,000 Host Protection Insurance. The Airbnb community vets guests and hosts through reviews, ensuring a high standard for sellers and consumers.
- Establish clear ground rules for guests that can be communicated to interested parties such as neighbours, landlords and building organisations. For example, guest frequency, how many can stay at one time, what number to call in an emergency, your pet policy, noise restrictions and code/key restrictions.
- Make sure neighbours are on board and can contact you if they are unhappy with anything. Complaints from unhappy neighbours may put your lease in jeopardy.
- You may want to consider a system where you notify your neighbours and landlord when someone books your property so that nobody is caught by surprise.
What is the Airbnb Friendly Buildings Programme?
You could also consider the Airbnb Friendly Buildings Programme, designed for those who want to sublet through Airbnb but have come across resistance from other involved parties. The concept involves complete transparency during the process and, potentially, a revenue share. The programme organises and ratifies the agreement between a landlord and a tenant, or potentially several landlords who own properties in the same complex or apartment building.
This is a great way for a property owner to retain a long-term relationship with a tenant while finding a way for both of you to make extra money from any spare or unused space.
How to be an Airbnb for Work host
The number of businesses and companies turning to Airbnb for their travel requirements is growing rapidly. Over 250,000 companies now use Airbnb to book accommodation for staff. Kiwi Hosts can list themselves under the Airbnb for Work category if they meet specific criteria that lend themselves well to this kind of traveller.
Some of the factors that Airbnb looks at when deciding if a host can list under the Airbnb for Work category include:
- 4.8 and above business review
- An overall rating of 4.7 and above
- A smoke and carbon monoxide detector
- A minimum of one business review
For Airbnb Plus, there should be:
- Spaces that have been checked for design and quality
- Facilities catering to business travellers, for example, Wi-Fi
New Zealand companies can also register for the Airbnb for Work programme and when you want to choose accommodation for work, select the “Work trip” button. It also involves the following:
- Registering your company on the Airbnb site by completing the contact form.
- Setting up a company account, then inviting employees to the programme and registering the company credit card. This way, when employees book accommodation for work, they have a convenient way to do so.
- Using your Airbnb for Work account, you can oversee employee’s travel plans using the specialised dashboard provided. From there, you can invite your employees to join, plus check current and future trip arrangements.
- If your company appoints someone to be in charge of travel arrangements, invite them to the Work Programme, then you can assign them as an admin or trip planner.
How to become a Superhost
A much sought-after reward for any Airbnb host, a Superhost badge is a privilege granted to those who go beyond simply offering a space for people to stay and fully take on the role of being a host. There are four boxes you need to tick, which are evaluated at four intervals during the calendar year:
- An overall rating of 4.8 (maintained) over the past year.
- You cancel less than 1% of reservations made by guests.
- You must respond quickly to questions (within 24 hours), and you must have a response rate of over 90%.
- Have people staying at least 10 times in the past year. Alternatively, have completed 100 nights over 3 visits to your home.
As well as the badge, which is an indicator that guests can look for when searching for a place to stay, there are other perks. Perhaps most importantly, guests can search using the Superhost filter, which helps push your property to the top of the list and allows you to charge a premium for your listing. If you maintain your Superhost status for more than a year, you receive a $100 travel voucher, plus you earn 20% more “Travel Credits” than regular hosts, to put towards your own homes/experiences bookings.
What are Airbnb Experiences?
Airbnb now offers an Airbnb host service called “Experiences”. These are guided activities offered by Kiwi hosts to show guests the surrounding area or activity from a local’s perspective. It could be a driving tour to Abel Tasman National Park or a walk through the Wellington’s Harbourside Market. Maybe it’s dinner at a “local’s only” restaurant in Hawkes Bay or a dolphin-spotting tour in Marlborough Sounds’ waters.
What Airbnb particularly likes to see is hosts using their own skillset or career as a chance to show guests a unique, once-in-a-lifetime experience or activity. Encounters you can’t find in a Google search or a travel catalogue; something that shows Airbnb delivers service beyond its competitors. For example, a viticulturist might take guests on an informative walk through a local vineyard, or a tour guide may show them Napier’s art deco delights.
Airbnb charges a 20% service fee to the host on all booked experiences. So if someone booked your $500 experience, you would receive a $400 payment.
What is Airbnb Plus?
The Airbnb Plus programme aims to provide guests with something a little extra, in that the properties must be verified for style and quality. Plus properties have to undergo an in-person inspection, and professional photos are taken. Also, Airbnb provides Plus customers with a designated support team that aims to provide a faster service.
Airbnb is looking for properties that can provide the following as standard:
- Excellent ratings from your guests.
- Beautiful, stylish homes, with outstanding hosts who can give their guests an experience to remember.
- In-person check-in and check-out or an automated entry, for example, a pin-code pad.
- The essentials already provided, such as toiletries in the bathroom and coffee and tea in the kitchen.
- A fully equipped kitchen, with kitchen necessities like cooking oil and condiments provided.
- A well-maintained home, where appliances work correctly.
- If there are shared spaces in the home, working locks must be fitted on bedroom doors.
- Fast Wi-Fi.
Information on Airbnb Luxe
Whether your New Zealand property is an ex-art gallery or an architecturally-designed villa in the middle of an award-winning vineyard, Luxe is the pinnacle of Airbnb’s service. The homes undergo a 300+ point inspection to ensure they are in immaculate 5-star condition. Once guests have booked a Luxe home, Airbnb provides a trip designer to tailor the stay to their exact needs. Services that can be provided for guests are:
- In-person airport transfer to their accommodation.
- Fully equipped and with luxury accommodation.
- Custom-designed itineraries.
- A 24/7 concierge service.
- Services tailored to a guest’s needs, whether that be a personal chef, driver, childcare or butler.
Can a business be an Airbnb host?
If you run a professional hospitality business, such as a motel, estate, hostel, eco-lodge, timeshare, boutique hotel, wedding venue or retreat, and you want to book guests through Airbnb, you will be happy to know that this is possible. However, Airbnb does look for some specific features in such listings, most notably:
- A suitable business licence.
- Be accessible to guests with limited mobility.
- Personality in the design of the guest rooms.
- A local influence and sense of culture in the common spaces and the guest rooms.
- Surprising, non-traditional characteristics in the property that make it unique, such as being heritage listed.
- An expectation that hosts will be hands-on and personally involved with the hospitality.
- A focus on local services such as regional food, wine or entertainment.
- Bespoke maps with personalised touches and recommendations.
- You offer Airbnb Experiences or local tours.
- The full-time availability of the owner or manager.
COVID-19 advice for hosts
In addition to the standards below, Airbnb has introduced both host and guest advice during the COVID-19 pandemic. The guidelines include:
- Wearing a mask and adhering to social distancing practices.
- Carrying our Airbnb’s five-step enhanced cleaning method between guests.
- Not hosting or travelling if you have the symptoms of COVID-19 or have been exposed to someone infected.
- Maintaining good hand hygiene.
Please be aware that since 20 August 2020, Airbnb has indefinitely banned parties and events in its listings. It has also put a cap, of 16, on occupancy rates.
What are the minimum expectations of an Airbnb host?
If you were thinking of renting your dog kennel out to a poor backpacker, think again. Airbnb aims to be considered the best online destination for great and unique accommodation options at the best price. To deliver on that, they need to set and stick to a certain standard. The core principle of that standard is trust, and the company breaks trust into five key areas that make up the minimum standards and expectations for a host.
Here is a guide to Airbnb’s host standards, most of which are fairly obvious.
- Do not harm yourself or others staying in your space.
- You should not threaten anyone staying in your space or communicating with you through Airbnb.
- Do not create any hazardous situations for a guest, such as dangerous pets, flammable materials or blocked escape routes. You or any other people you live with should not be carrying an infectious disease while you have guests.
- Repair anything that could impact guest safety, such as broken handrail on a balcony or exposed wires. Other issues that are less urgent of repair, such as a leaking tap, should be identified in your listing.
- Ensure local emergency numbers are clearly visible and that you have laid out directions to the nearest hospital and (if applicable) vet.
- Ensure a first-aid kit is easily available as well as a fire extinguisher.
- Provide a functioning smoke alarm and carbon monoxide detector and ensure that your property meets government safety guidelines.
- Provide a clearly marked fire escape route and a map of your home.
- Know and do not exceed your safe occupancy limits.
- Ensure the listing is safe for children unless you declare in your listing that children are not welcome.
- Ensure your property is correctly ventilated, that temperature control devices are functioning and that detailed instructions for use are provided.
- Don’t use or break a guest’s property, or enter a space that is theirs to use without permission.
- Do not make threats about bad reviews to coerce a favourable result.
- You should not make any transactions outside of the Airbnb ecosystem.
- There should be no undisclosed or intrusive cameras in your listing.
- There should be no violation of others’ privacy, copyrights or trademarks.
- Be aware of and comply with applicable national laws.
- Ensure guests know all building rules where applicable, including parking, party, pet and noise policies.
- You should uphold the law, treat people with respect and not practise anti-discriminatory behaviour.
- Don’t share personal information about your guests with any other party.
- Do not encourage your guests to disturb common spaces.
- Make sure you don’t treat your neighbours as your Airbnb’s reception.
- Make sure you always respond to neighbour or community concerns.
- You should not provide inaccurate information.
- The information about your availability and your listing, including its features, type, hazards and habitability issues, should be 100% accurate.
- Your reviews should always be honest and constructive.
- Consider the space you list to be a place where people can feel like they belong, not just as a means to a transaction.
- Your space must be habitable. It can’t be of sub-standard cleanliness or repair or have undisclosed utility issues such as no running water or electricity.
- The listing must be a space (so it can’t be camping gear) and it must be stationary (so it can’t be a moving boat).
- Outside of extenuating circumstances, you can’t cancel after the deadline.
- You must respond. Answer booking queries before the guest’s stay and requests during their stay, ensuring that your contact details are accurate. If you enter a resolution process, you must also be on hand to respond.
- Be aware that consistent low ratings can result in your listing being removed.
20 Airbnb host tips: How to get positive Airbnb reviews
When your guest has left your space and finished their trip, they review you in five main categories: communication, check-in, accuracy, cleanliness and overall experience. To get those great reviews, here are some helpful tips:
- Ensure your availability is up-to-date on your listing so that guests don’t begin their experience with misinformation.
- Many of your guests have travelled a long distance. Why not have an inexpensive gift ready for a guest’s arrival, such as a bottle of New Zealand wine or a simple snack like locally produced cheese and biscuits.
- Respond quickly to all questions from your guests. Make sure you have the Airbnb app installed on your mobile device for instant updates.
- Ensure guests have up-to-date contact information for you, plus a back up (such as your partner’s). Whatever happens, never let them wait for check-in.
- If something in your listing changes at the last minute, for example, a key appliance breaks down, communicate the issue with the guest and let them know when it will be resolved. Consider hiring a replacement in the interim, if it’s an issue for the guest or they are not comfortable with the repair person arriving during their stay.
- Create a house manual filled with as much information as possible about how the equipment on the property operates, what the surrounding neighbours are like and what they expect, any building rules or regulations that must be followed and details about the local area.
- Consider getting your house manual transcribed into other languages. You can find freelancers for hire on places like Upwork and Fiverr.
- Can you organise any discounts for your guests? Maybe you have a friend that owns a local restaurant or manages a local attraction who can offer a bargain for your guests.
- Make sure your guests are aware of the days that rubbish is collected so that they can easily remove clutter from the property.
- Ask your guests if they have any particular interests – fishing, hiking, swimming, etc. – and prepare some activity ideas for them in advance.
- If you are frequently hosting international travellers, consider offering an airport shuttle service as an added feature and include the cost in your price. Nothing makes a guest feel more welcome at check-in than taking the pressure of transfers off their shoulders.
- If your guests have children, make sure you have some kid-rated movies and toys on hand so that they’re kept happy. Portable cots and high chairs are also greatly appreciated.
- You may also want to provide details of a reliable babysitter, using a local contact with which you have a pre-existing relationship and can vouch for.
- Be ready and willing to accept late check-outs and early check-ins.
- Ask friends or friends of friends, who don’t know your property well to visit your space and see if it matches the expectations set in your listing.
- Be honest about your listing. If you don’t mention that you are up a steep driveway, near a rowdy bar or that the next-door neighbours are currently renovating, it will come back to bite you.
- When you initially list your space, you may need to consider keeping your price lower than the competition, which encourages more stays. Plus, if you over-deliver, your ratings and testimonials may increase much faster.
- If you have a seasonal feature, such as an unheated pool or a garden filled with flowers, you should consider advising guests when the best and worst months for those features are.
- Provide a full public transport guide for your area and to important landmarks.
Whether you own a cosy bach in Russel or a lakeside retreat in Queenstown, you may want to consider making some extra cash, by joining Airbnb. However, make sure you do your due diligence before signing on the dotted line.