How Airbnb makes money and how you can profit from it too


So, How does Airbnb make money?

One of the primary ways in which Airbnb generates revenue is through commissions from the rental owners. The company charges a fee to hosts for every booking made through the platform. The fee is usually a percentage of the total booking amount and can range from 3% to 14.2%, depending on the type of property and the location. In addition, Airbnb charges guests a service fee, which ranges from 0% to 20%, and is based on the cost of the rental. These fees are how Airbnb makes money and are a significant part of the company’s revenue stream.

The commission-based model is a win-win for both Airbnb and rental owners. Rental owners get the benefit of a platform that connects them with potential guests, offers booking management tools, and provides access to a large audience. Meanwhile, Airbnb benefits from the commissions generated by these bookings.

This model incentivizes both parties to work together to create a positive experience for guests, which can lead to repeat bookings and a loyal customer base for Airbnb. Overall, the commission-based model has been a successful strategy for Airbnb, enabling the company to generate significant revenue while simultaneously providing value to rental owners and travelers.

Is Airbnb profitable?

Airbnb has been profitable in recent years, although the company has had some ups and downs. In 2020, the company reported a net loss of $696.9 million due to the COVID-19 pandemic’s impact on the travel industry. However, in the second quarter of 2021, Airbnb reported its first profitable quarter since going public in December 2020.

The company reported a profit of $217 million, up from a loss of $400 million in the same quarter the previous year. This shows that the company has the potential to be profitable and that its business model can work in different market conditions.

The price-to-earnings (P/E) ratio is a useful metric for investors to evaluate the financial health of a company. The P/E ratio represents the price of a company’s stock divided by its earnings per share. In recent years, Airbnb’s P/E ratio has been relatively high compared to other companies in the travel industry, indicating that investors have high expectations for the company’s future earnings potential.

In April 2023, the company’s P/E ratio was around 40, indicating that investors were willing to pay a premium for the company’s stock based on its potential earnings growth (Booking for example had a PE ratio around 34 in the same period). Overall, while Airbnb has faced some challenges in recent years, the company has shown that it can be profitable and has a business model that appeals to both investors and users.

How can you make money with Airbnb?

Becoming an Airbnb host can be a great way to generate income by renting out your extra space to travelers. To get started, you will need to create a profile on the Airbnb platform and list your space with a description, photos, and availability. Once your listing is live, you can start receiving booking requests from travelers around the world. As a host, you can set your own rental rates and availability, and Airbnb will take care of the payment processing and insurance coverage for your property.

There are several ways you can make money as an Airbnb host. One way is to rent out a spare room in your home, which can be a great way to earn extra income while still having the flexibility to use your home for your personal needs. You can also rent out your entire home while you’re away on vacation or for extended periods.

Additionally, you can offer unique accommodations like treehouses, yurts, or tiny homes, which can attract adventurous travelers looking for a one-of-a-kind experience. As a host, you can also offer additional services like airport pick-up, tours, or meals, which can generate extra income and enhance the guest experience. Overall, Airbnb provides a great opportunity for individuals to monetize their extra space and generate income in a flexible and convenient way.

But, How can you make money on Airbnb without a property?

One may initially think that it’s impossible to make money on Airbnb without owning a property, but in reality, there are a few ways to earn income from this popular platform.

One of the most popular options is to become an Airbnb property manager. This involves managing the properties of other Airbnb hosts in exchange for a fee. As a property manager, you would be responsible for communicating with guests, handling bookings, and ensuring that the property is in excellent condition. This can be a profitable way to make money without the expense of owning a property.

Another way to make money on Airbnb without owning a property is by creating a cleaning company that specializes in cleaning Airbnb rentals. With the increasing popularity of Airbnb, many hosts are in need of reliable and efficient cleaning services to ensure that their properties are ready for the next guest.

As a cleaning company owner, you can offer cleaning services to multiple Airbnb hosts and charge per clean. By providing excellent service, you can establish a solid reputation and attract more clients, which can lead to a steady stream of income. Overall, with a little creativity and initiative, making money on Airbnb without owning a property is definitely possible.

Other Resources for Airbnb Owners

Check our post on the best countries to invest on an Airbnb property. Or book a consultation call with me if you want to invest on Airbnb.