3 Reasons Airbnb Will Still Be Profitable in 2023
By Dejan Kvrgic Published November 16, 2022
Will Airbnb still be a profitable investment venture in 2023?
To be able to answer your question, we first need to take a step back into Airbnb’s past and see how it has progressed over time.
Before the COVID-19 pandemic stopped the entire world in 2020, Airbnb hosts were earning $924 per month (on average) from hosting, according to Earnest.com. We can agree that that’s a more-than-decent income.
Now, when things are slowly but surely returning to “normal” and businesses are recovering from the COVID-19 consequences, the question is:
Will Airbnb pull through and continue to bring investors benefits in 2023, as well?
The prognosis for now is positive. In the third quarter of 2022, Airbnb revenue rose by 29% from a year earlier to $2.88 billion—which was slightly higher than analysts’ forecast of $2.85 billion.
With 2022 slowly coming to an end and the forecast promising, investors should certainly turn their attention to this investment strategy in the upcoming year. Before deciding on a location, though, make sure that you don’t skip any important steps or blindly trust the predictions.
While the future seems bright for Airbnb, you should still take some time to estimate Airbnb income of your favorite locations.
If you’re already interested in investing in this type of property, you may find this next section useful. We’ve outlined the top three reasons why Airbnb is considered a profitable business venture.
1. Property Control
One of the most obvious advantages of going down the Airbnb route is that hosts exert more control over their properties.
What Airbnb offers is easier cleaning, maintenance, and taking care of any major issues tied to your investment property. Airbnb, by its very nature, implies short stays, so you’ll be able to visit (and inspect) your property more often.
It will allow you to keep up with what is happening much better than if you’re catering to long-term tenants. And even though more time on the field may seem like a challenge at the moment, it is actually a huge benefit for investors and hosts.
2. Diverse Guest Portfolio
What will pretty much guarantee a high Airbnb revenue is a diverse lineup of guests.
With long-term rentals, you are used to catering to the same tenants for six months at a time, for example. It means that you won’t be able to generate as much profit as you envisioned.
With Airbnb, however, there is a greater possibility for more revenue. Renters will be coming and going constantly. The influx of money you’ll be earning from a well-positioned and equipped Airbnb can easily exceed your expectations.
With Airbnb, you can expect anything from students, people looking for career opportunities in the city, and families on vacation, to seniors enjoying their retirement years.
3. Greater Revenue
Finally, the reason you’ve been hoping for:
Yes, Airbnb holds more opportunities for a higher income than traditional rentals.
Why is that?
Depending on factors like location, seasonality, and amenities, you are entitled to adjust the rental rates as you see fit. That said, you should still stick to certain standards and make your short-term rental affordable—and, thus, attractive—for your future guests.
Things Airbnb Investors Should Be Aware of
As with any other type of investment, simply investing in Airbnb and expecting high revenue is not the most likely scenario. Do keep in mind that investing consists of the good—and the not-so-good—things.
However, being aware of any potential obstacles before they come up can help you navigate the problems better and prevent unnecessary complications.
So, if you are sure that investing in Airbnb is the best investment path for you, here are a few things to consider:
The Airbnb business is now slowly getting back on its feet and generating revenue that’s similar to that before the pandemic. The first thing that investors should pay attention to is the strong competition in the industry.
Certainly, other investors have already researched potential hotspots for Airbnb investments, so you should bring your A-game to the market, too.
Among other things, it means you need to be willing to spend time researching potential locations and getting to know your competition. Studying the advantages and disadvantages it brings will be beneficial as well.
Airbnb Rules & Regulations
Another thing that will be a potential obstacle for some investors is the strict Airbnb rules and regulations.
Bear in mind that you must know the rules of the community where your Airbnb is located.
Although some areas have moderately restrictive rules and regulations, others will not be so lenient. Some may even limit the number of guests you can have or how many days you can rent your property at a time.
Generating revenue is your goal. However, you need to consider the factors that are beyond your wants and wishes as an investor in order to succeed in this business.