What is an Airbnb and how does it work for small hotels?

What is Airbnb?

Airbnb is a web-based platform, where travellers can find and book short-term rentals all over the world. The company began as a place where owners could rent out a spare room, their entire apartment, or even their house. Soon, hosts started getting creative and began coming up with funky offers like treehouses, tiny homes or even beautifully furnished caves. 

Today, Airbnb also allows professional accommodation providers like boutique hotels, serviced apartments or B&Bs to create listings.

What industry is Airbnb in?

Airbnb was initially a part of the sharing economy, allowing people to temporarily rent out spaces without too much regulation or officialdom. It was a game changer for travellers who needed cheap and convenient short-term accommodation, and allowed a lot of people to make some extra money on the side.

As it has evolved, Airbnb has become one of the world’s most renowned travel brands. Nowadays, it is often a first port of call for travellers seeking holiday accommodation and it’s a lucrative online channel for the properties that list on it.

What is the difference between Airbnb and VRBO?

The main difference between Airbnb and VRBO is that Airbnb may offer private rooms in shared spaces or unique spaces like campsites or igloos, while VRBO deals in stand-alone vacation homes only.

Airbnb also offers hotel rooms, whereas VRBO does not. This makes Airbnb a much bigger online booking channel and one that hoteliers can take advantage of.

What is an Airbnb property?

Since Airbnb quickly gained massive popularity among travellers and hosts, the company’s name has also come to describe the properties you can book on the platform. Whatever the type of accommodation, guests who book via the website refer to it as ‘an Airbnb’ rather than a room, apartment or vacation rental.

But these days, an Airbnb can be anything from a hotel, to a quaint B&B, to a treehouse, to a tent, to an igloo, to a church, the list goes on…

What makes an Airbnb property popular with guests is how special and unique it is able to be, and this doesn’t have to rely solely on the architecture (or lack thereof). If you can surprise or delight your guests with personalised services, that’s what is most important.

Airbnb meaning for small hotels

For small hotels, Airbnb can mean a huge opportunity. It’s a fast growing channel that more and more travellers are choosing to book through. 

A big reason for this is that guests are looking for unique experiences and want to stay in a property that doesn’t fit the mould of a standard or traditional hotel. If you’re able to list on Airbnb, you’ll be able to increase bookings and revenue, as well as grow your brand by giving guests a truly memorable and personalised experience.

These are some possible benefits of working with Airbnb:

• You will gain access to new market segments who use Airbnb exclusively to find places to stay while they travel. In particular, the younger, tech-savvy travellers who have money to spend are attracted to the authentic local properties they can find on Airbnb. They believe accommodation listed on Airbnb will provide them with more cultural experiences, which is a priority for them.
• You will be able to increase your bookings. Airbnb is a valuable distribution partner, and small accommodation providers who connect with Airbnb often notice a boost in bookings.
• You will minimise the risk of overbooking your rooms when you use Little Hotelier to connect with Airbnb. Little Hotelier’s technology ensures all information is delivered in real-time to prevent double bookings.

How does Airbnb work? 

Airbnb works very simply for guests, but it can be a bit more complex if you want your property to be a host on the platform.

For guests, they simply need to browse stays or experiences by searching and applying their chosen filters. Once they find an attractive option they can learn more about their host, the property, and the location. From there a booking can take place in just a few clicks, and they can maintain contact with their host through the app or contact Airbnb if they need support.

The bulk of Aibnb’s revenue comes from a service fee that is charged to guests for each booking. This is usually around 14-16%.

For small accommodation properties, Airbnb works similarly to OTAs with a few steps to follow before your property is listed. Before you go down the road following all the steps we referred you to, it’s important to be aware that not all properties are accepted onto the platform. So the very first thing you should do is make sure you’re aware of Airbnbs requirements for hosts.

Once you are listed and taking bookings, Airbnb will take a commission fee from your bookings just like other OTAs. However it’s usually 3%, which is much lower than the 15% or more a Booking.com or Expedia might take.

On the platform, you’ll have control over certain aspects of your property, such as amenities and special features. For example, you might offer to pick up and drop off guests at the airport. You also set all your own policies and terms and conditions that guests need to be aware of.

Can I list my short-term rental on Airbnb?

Yes, Airbnb is one of the best-known channels for short-term rentals. If you are a seasonal accommodation business or running a property as a side-gig, it’s an especially good option.

But it’s not the only option – the more channels you connect to the bigger your potential audience is and the more bookings you can win. Two of the industry’s major OTAs, Booking.com and Expedia are no longer just for hotels. They also offer great exposure for B&Bs, serviced apartments and other types of accommodation.

There are other sites you can access for the same purpose too:

• TripAdvisor: while it used to be known only for reviews, TripAdvisor now also works as an online sales channel.
• Niche sites: Smaller, local OTAs and niche booking sites that cater to specific interests (e.g. people travelling with pets) can get your property in front of your ideal audience. 
• Google: If you want to push your business, leverage metasearch engines and paid advertising for increased visibility.

The impact of Airbnb on hotels and the industry

Very much a disruptor, Airbnb has had a major impact on the hotel industry. The platform is immensely popular and used by travellers across the globe. In fact, Airbnb hosts welcomed more than 1 billion guest arrivals in almost every country across the world in its first 10 years of operation. Initially this caused the average daily rates of major hotel chains to drop, and gave smaller properties their very own playground to attract more guests. In the early years it certainly reduced the profits of traditional hotels.

Airbnb has very much changed how people think about accommodation and travelling – guests no longer have to choose between one hotel or another. Instead, they can stay in unique properties, in unique locations, and immerse themselves more strongly in their experiences.

Ultimately, Airbnb has challenged hotels to lift their game. Research has shown that the increase in the quality of the Airbnb service has a direct adverse impact on hotel performance. It’s forced hoteliers to think more about how they make stays personalised and memorable for their guests, and focus more on why people are travelling in the first place – to experience new and different cultures.

How to start an Airbnb

If you’re thinking of starting an Airbnb or want to list your existing property on the platform, the first step is to check the legal situation in your area. Depending on your location, you might need to apply for a licence or permit to operate legally. 

Once you’ve taken care of the legal aspects, the next step is to prepare your listing. For this, you’ll need high-quality photos of your property and a well-written description that’ll draw in potential guests and make them want to book with you.

You should also make a list of amenities and services you can offer, as well as what the surrounding area has to offer. On top of that, remember that Airbnb is all about ‘hosts’. So you’ll need to provide some information about yourself and hopefully come across as likeable and welcoming to guests.

Next, do some competitor research, so you can set appropriate rates for your market. Of course, Airbnb properties can vary greatly so always price yourself based on the value you offer.

Once you’ve done all that, it’s time to create your profile on Airbnb (and other platforms), so your listing can go live. We referenced this above but one thing we didn’t mention is the necessity of a channel manager.

A channel manager will allow you to connect your property with a number of online channels at the same time. It will automatically update your inventory in real-time and always make sure the data is correct within your property management system AND on your booking sites. This helps you avoid double bookings and also saves you a significant amount of time on manual work.

Airbnb Bed & Breakfast tips

Most travellers who choose Airbnb want a unique and authentic experience, so if you have a Bed and Breakfast it’s important to create a listing that reflects your personality and style. Apart from high-quality photos and a well-written description, include information about the property, its surroundings and the services you provide. That way you manage expectations and ensure guests know what they’re signing up for. 

Once guests have booked, communicate with your guests and share details about reaching your property and check-in. If there are any problems or issues, address them quickly and professionally.

After check-out, thank them for their stay and politely ask for a positive review. That’ll help you achieve superhost status and get more bookings in the future. And finally, keep your rates in line with the market and always update your availability, so you never miss out on business. 

Here are three valuable lessons to keep top of mind:

1. Your B&B cannot afford to be generic

The very nature of home sharing means guests are staying in unique properties such as vacation homes and each will appeal to its own niche market. An experience is something modern guests crave more than anything and home sharing is perfectly aligned with this notion.

The rooms sold on Airbnb have been created for this very purpose; to engage a human desire for comfort, style, and stimulation – regardless of whether that’s for a business trip or a family vacation. To mirror this, you need to focus on a core, unique, offering for travellers. 

You can’t win over every market but you should think about what your hotel has that other properties don’t, then build and expand your messaging around that. For example, maybe it’s your stunning architecture, one-of-a-kind views, themed rooms, or vintage bar.

2. Once your B&B establishes its values, it needs to win them

One more advantage that guests speak about when enjoying home experiences is the flexibility. Complaints around traditional accommodations often centre on the rigidness of the stay, fine print, and false advertising.

Consistently delivering on service quality and guarantees will go a long way to keeping travellers on side. If your brand is synonymous with being the cleanest, most comfortable place to stay, travellers will depend on this expectation to be fulfilled.

In some scenarios travellers staying at Airbnb properties can spend a lot of time waiting for their host, being shown around, having everything explained to them, requesting help or maintenance, trying to contact their host etc. It isn’t always the most seamless or convenient experience because usually there are no staff – only homeowners. This is a chance for you to win against other Airbnb properties.

There are still a lot of guests who enjoy the simple pleasures of a clean, comfortable hotel with friendly and helpful staff to attend to every need. Furthermore, things like strong water pressure and quality wifi are essentials guests require, but aren’t always given at home-sharing properties.

At the very least if your hotel can deliver on this time after time and play to its strengths, you should have no problems securing bookings.

3. You should promote local services

One major benefit a guest receives when purchasing a stay in a short or long-term rental is immersement in their destination’s locale. From the second they ‘check-in’, they’re among the local community and their host will be best placed to offer great advice on local experiences and attractions.

Here are a few reasons why creating a connection to the local area is a good idea:

• Guests look to their hosts to be their guide so use content on your website to recommend local hotspots such as amusement parks.
• Farm to table is a strong food and beverage trend and particularly accessible in home-sharing accommodations. Your B&B can also create localised menus and incorporate local seasonal produce into their menus.
• Implementing local design into your property will create a more harmonious experience for guests and also strengthen your storytelling to win over guests.
• Become your own hotspot by allowing local neighbours into your common areas. Think about inviting local chefs to give cooking classes or artists to show their work.
• Grounding your property in the local area and making sure you promote this on your website will assure guests they’ll be receiving the authentic, unique experience they were looking for.

How to boost your Airbnb rating?

Being highly rated on Airbnb will lead to more bookings and allow you to maintain a maximum rate. There are a few things you need to focus on to boost your rating:

• Be true – Don’t falsely advertise and make people think they are getting something they are not. Be honest about the size, location, and services that you offer.
• Be responsive – Communication is one of the biggest factors on guest experience. You need to respond to guest queries asap to ensure they don’t encounter any friction.
• Be professional – Even if a guest has negative things to say, people will also judge you for how you respond and how you behave. Always be polite and try to resolve things peacefully.
• Go the extra mile – Surprises always delight guests and put them in a positive mood. If they get an unexpected gift on arrival, they’ll immediately have good feelings about you.
• Ask for feedback – Always ask happy guests if they can leave you a positive review, and always invite them back for another stay.

Improving your rating will in turn help improve your ranking – and ranking higher on search results is key to getting bookings and revenue.

Some other things you can do to improve your ranking include focusing on high-quality photos, improving SEO items such as your listing title and descriptions, and investing in technology that helps you manage your property and listings efficiently.

Succeed in Airbnb hotel management using Little Hotelier

Hotel tech solutions can help you run your Airbnb and other short-term rental properties more effectively. Software that integrates with Airbnb is the best option since it can automate several manual processes. 

Little Hotelier is one such example. Because it’s an all-in-one solution, Little Hotelier will give you everything you need to succeed in managing your Airbnb listing.

With Little Hotelier, you’ll get:

• Channel manager –  It synchronises your reservations and updates availability across all channels in real-time. This saves valuable time and avoids double bookings. 
• Front desk software – Control all aspects of your operations from one location. It will seamlessly integrate with your channel manager and other systems to ensure data and guest information is always accurate.
• Website builder – Create your very own beautiful and optimised website so you can take direct bookings and earn more profit. Often Airbnb guests will visit your website after finding you on the platform.
• Booking engine – Essential for processing those direct reservations from your website and other locations such as Facebook or metasearch.

Get a 63x return on investment and save 35 minutes per booking with Little Hotelier.