Airbnb has been successful in attracting the leisure traveler. To facilitate continued growth, Airbnb’s next huge step is capturing more business travelers.
In order to meet the standards of the business traveler, Airbnb has established¬†a process for hosts of entire-home listings to achieve a business-ready accreditation. This accreditation means listings with business-ready status are on par with or better than hotels in relation to experience, cleanliness, and dependability.¬†
Some reasons for hosts to become business-ready, in addition to the increased status that comes with attaining accreditation, include:
- Ease: As the host of an entire home or apartment, it‚Äôs not difficult¬†to become business-ready.
- New Revenue Source: Business travel spending¬†was $1.3 trillion in 2016, opening up a whole new revenue stream to hosts that previously only attracted vacationers.
- Increase Bookings: Business travelers travel during the week and want to stay on days that traditionally maintain lower occupancy rates than weekends.
- Corporate Access:¬†Airbnb recently forged partnerships with¬†American Express Global Business Travel, BCD and Carlson Wagonlit Travel, making Airbnb bookings compliant with many corporate booking systems.
All signs point to more revenue and more bookings for business-ready hosts. Here‚Äôs what it takes to earn an official business-ready accreditation:
- The space: Smoke and pet-free property
- Reviews and response rate: Listing must have at least 3 reviews and maintain 5-star cleanliness and accuracy reviews.
- The Amenities: Laptop-friendly workspaces, wireless internet, self-check-in, toiletries, hairdryers, hangers and ironing boards, etc.
- Cancellations:¬†Host cannot have canceled any reservation within a week of the stay in the past year.
At the Airbnb Open in January of¬†2017, they stated the average increase in revenue for business-approved listings over regular listings is 8% for top 15 cities and 5% globally.
In an effort to support these claims,¬†we turned to our data sourced from the largest Airbnb markets. These markets are:
|Rank||Market||Total||Business-Ready Listings (BR)||
BR as % of Total
|5||Rio de Janiero||7,739||276||4%|
Note: ‘Total’ includes active 0/1/2 bedroom listings; BR = Business Ready; NBR = Non-business Ready
Looking at average occupancy rates and revenue in the top markets, we isolated business-ready and non-business-ready listings to conduct our analysis.
Here are the results:
Key Performance Metrics
|ADR||Occupancy||Revenue Last 12 mo|
|5||Rio de Janiero||$116||$99||-15%||34%||53%||56%||$3,828||$10,246||$6,418|
Note: Analysis includes active 0/1/2 bedroom listings with at least one reservation in the year; ADR = Average Daily Rate; NBR = Not Business Ready; BR = Business Ready
Business-ready listing KPIs far exceed expectations. While the average daily rate (ADR) for business-ready listings is either on par with¬†or not significantly higher, than those that are not business ready, business-ready hosts experience higher occupancy rates and an average of $10,000 more in annual revenue than non-business-ready hosts.
This is a big deal for Airbnb hosts. Business-ready listings are making more money is due in large part to booking more weekdays, especially Sunday/Monday/Tuesdays.¬†Increased occupancy = higher revenue.
It is clear that business travel is driving a large percentage of overall Airbnb stays in metropolitan markets and listings that are able to achieve the designation of being business approved have a huge leg up on the competition.