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Estimating your potential Airbnb revenue may appear to be a guessing game - but Airbooster will provide you with a realistic appraisal of your potential earnings based on nearby Airbnb properties that directly compete with your property. Read more

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Airbooster analyses local Australian data to give you insights on how to improve your Airbnb revenue.

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The Big Gap Between Airbnb High and Low Income Earners

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Should You Set Your Prices Based on Nearby Listings?

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Do Ratings and Reviews Affect Your Annual Earnings?

If a guest gives you less than five stars for a stay, can this affect your annual revenue? Airbooster tested whether the number of reviews or the rating score of a listing could affect annual earnings.

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Estimating Your Potential Airbnb Revenue

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Airbnb’s NEW Pricing Tool -
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Estimating Your Potential Airbnb Revenue

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The Big Gap Between Airbnb
High and Low Income Earners

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Do Ratings and Reviews Affect
Your Annual Earnings?

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If a guest gives you less than five stars for a stay, can this affect your annual revenue?
Airbooster tested whether the number of reviews or the rating score of a listing could affect annual earnings.

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Conclusions

There are big differences in annual income between hosts of Airbnb similar properties; this data compared only one or two bedroom apartments within 5km apart but similar patterns are seen across other Australian cities.

Looking at individual listings by their photos, description and reviews/ratings, it’s impossible to tell which properties are high or low earners. ‘Low earner’ properties don’t always appear ‘cheap’ and ‘high-earner’ properties don’t always look the most ‘luxe’ or have the highest ratings. Many owners clearly put a lot of work into presenting their properties, but just become a ‘middle earner’.

The difference in earnings is the result of listing optimisation and price strategy. Successful hosts don't use a ‘market rate’. Deeper analysis saw the main difference between the high and low earners was the use of pricing techniques resulting in tens of thousands of dollars difference between owners each year.

It was no surprise that among the one-bedroom group, two out of the top three listings were managed by the same host - each of his apartments earned over $90,000 over the last 12 months. His pricing strategy delivered him triple the earnings of the lowest earning host, and double the earnings of many other hosts in the area.

At Airbooster we assess competitors in your local area and advise you of a realistic earnings range to expect. We do not use ‘averages’ or even ‘median’ price estimates which are almost useless if you are aiming for optimal pricing. Unlike some property managers we also do not give a ‘guesstimate’ of how much more you can earn than long term rental which is just too simplistic to be relevant.

Instead, we look at the range of earnings for properties similar to yours, then work on raising your rank in the group with our price and listing strategies. We start by assessing how your annual revenue ranks compared to your competitors, then we will work from there to improve your position.

Conclusions

Number of Reviews

In our test group, hosts experienced an average increase in annual revenue with more reviews. This can be expected because guests naturally choose listings with more reviews, resulting in better occupancy. A listing with more reviews generally ranks higher in search results, creating a virtuous circle in attracting bookings. Hosts should take note of the following:

If you have a high number of reviews, your prices should be higher than average. One mistake made by hosts is to maintain the prices they initially set when launching their listing without raising rates when they earn more reviews.
For brand-new listings, Airbnb provides assistance by ranking them higher. Hosts should leverage this period to accommodate as many stays as possible to gather a significant number of reviews. It would be worth slightly underpricing the listing to encourage more bookings and earn a credible number of reviews.

Ratings Score

It was puzzling to observe how low-rated properties could still generate reasonably good income despite receiving terrible scores. These properties had ratings of 4.3 stars or less and guests left scathing comments about cleanliness, broken amenities, or poor communication. Further examination of this \"low rating\" group revealed that the majority were hosted by professional managers, some of whom had dozens or even scores of listings. Unfortunately, cleaning and communication standards are not always high for these managers, resulting in lower ratings.

However, many professional property managers employ pricing strategies. For example, one listing had a rating of 3.9, a very low rating, but still earned just under 85k. Another listing from a professional manager had a rating of 4.05 and earned over 88k. Surprisingly, these bottom-rated listings actually earned more than many higher-rated properties.

(Note: Not all professional managers have good pricing techniques; many earn below the average of nearby listings and also receive bad ratings from guests. We recommend that all landlords understand the earning range for their listing so they can evaluate the performance of their property manager. \"Management\" should involve optimising earnings, not just cleaning and guest communications.)

The size of your property also impacts the importance of these factors. Ratings and reviews hold more significance for larger properties (2+ bedrooms) where groups and families tend to choose accommodations more carefully when their trip is focused on having an experience together.

The main conclusion is that while it is important to prioritise guest experiences that result in a five-star rating, losing a star does not necessarily spell catastrophe for your annual earnings. Implementing pricing strategies aimed at increasing annual revenue is of greater importance.

Airbooster specialises in techniques to improve annual earnings for short-term properties. We identify factors that influence your search ranking and booking rate and focus on price strategy for optimal annual revenue.

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Airbnb Listing Creation

Designed for improved ranking on guest search pages and click through for more bookings.

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Email me occasional Insights into Australian Airbnb properties.

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