How Does Airbnb Work for Hotels? A Simple Guide

Are you struggling with low occupancy rates and high commission fees from traditional booking platforms? Creating an account on Airbnb.com as a host can increase your property's visibility and provide you with more opportunities to connect with guests worldwide.

Unlike many other OTAs that charge high commissions from hosts, Airbnb's platform gives you access to a wide range of travellers, especially Gen Z and younger audiences who prefer unique, authentic experiences over standard hotel stays.

As a small hotel owner, B&B operator, or apartment manager, Airbnb offers you the opportunity to showcase your property and provide more personalised experiences that larger hotel chains simply can't match.

Let's talk about what Airbnb is, what it means for small hotels (homestays, B&Bs and apartments) and the tips you should know to get higher visibility.

What is Airbnb?

Airbnb is an online marketplace through which property owners (hosts) provide rental options for travellers -

• A shared space with a private option
• A space for multiple people to collaborate
• Rent out the entire property

Travellers can add their check-in date, check-out date, number of guests, and the type of amenities they need. 

Additionally, they can apply filters to choose the property they want to stay in, such as whether they need a pet-friendly space or they're planning for honeymoon gateway.

Beyond accommodation, this vacation rental platform offers people the opportunity to try new experiences. 

This simply means that hosts can share their experiences, and it can be a person who is local to that area, knows a lot about the place, and can conduct in-person activities for you. 

While few hoteliers think that Airbnb is the end of traditional hotels, it's actually a silver lining for small hotel owners to provide lodging options to travellers on both short-term and long-term journeys.

The best part? This short-term rental platform offers access to additional amenities, including kitchens and extra spaces for children or parents. While travellers can find the same amenities in hotels as well, it's not an affordable option, even for short stays.

What does it mean for small hotels?

Airbnb, the fastest growing channel  has(150 million users who have booked 1.5 billion stays) and people choose it to get unique and authentic experiences. This is something that traditional hotels lack.

By listing your accommodation on Airbnb, you can grow your brand visibility and get more bookings online.

Here are a few benefits that Airbnb provides to hosts like YOU -

• Access to a wide range of travellers, especially Millennials and Gen Z audiences, who always crave local, unique, and personalised experiences.

These categories of travellers wanted to enjoy cultural experiences. Thus, if your hotel is on Airbnb, you can get massive exposure.

• It's a platform for accommodation providers to get more bookings. 
• Airbnb has high brand advocacy, meaning travellers don't just return to this platform; instead, they refer their friends or family at a higher rate. 
• Unlike other OTAs, which charge a high commission rate (15-30%), Airbnb doesn't charge much lower commission from you for listing bookings.

What does the process of Airbnb look like?

Airbnb works in such a way that hotels are connected to hosts (property owners). It functions like an OTA.

Here, guests can apply filters to find the best accommodation and learn about the property, location, and connect with the host to communicate more. Communication happens smoothly between the host and the guest.

The guest can even contact Airbnb in case of any queries.

This vacation rental platform earns revenue by charging a service fee from guests which ranges between 14% and 16% on each booking.

Unlike OTAs that charge high commissions from property owners (15-30%), Airbnb charges 3% commission rate, which is barely low. Housekeeping expenses are charged separately depending on guest requirement.

Not every hotelier can list their property, and they need to check whether the property matches the Airbnb’s requirements.

Best part? Airbnb gives hosts the flexibility to set their own rules and policies for providing a comfortable stay experience to guests.

Is Airbnb a good option for short-term rental housing?

While it's good to list your short-term rentals on Airbnb, it's not the only option left, especially if you run a seasonal accommodation or run the property as a side business.

However, to secure more bookings and capture a significant market share, you need to maintain a presence across various OTA channels. These include Expedia, Booking.com, TripAdvisor, and others.

There are other hotel distribution channels you can leverage to get more eyes on your property, such as meta search engines and niche specific sites.

What impact does Airbnb have on other hotels?

Millions of travellers use Airbnb across the globe to find accommodations. Within its first 10 years of inception, 1 million guests started using this platform in every country.

This massive adoption has created a mixed impact on the hotel industry. On the one hand, bigger hotel chains had to reduce their average daily rates for bookings, but smaller properties, especially boutique hotels, got a chance to play their part.

These smaller properties can now attract a host of guests at lower prices. This pricing competition affects big hotel chains and impacts their bottom line.

The financial impact has been substantial. A report from the hotel association states that the arrival of Airbnb has negatively impacted the hotel's revenue. 

The report's findings indicate that the hotel's direct revenue loss was approximately $450 million. When Airbnb experienced massive growth from 2016 to 2018, it reduced the number of direct bookings for traditional hotels.

However, despite such a significant impact, Airbnb created value for lesser-known destinations.

For guests, Airbnb gave them a broader choice to choose from a sea of hotels, such as -

• Get unique experiences
• Get unique stay options
• Unique locations

This shift also changed the way hotel owners used to provide immersive experiences to guests. Travellers now turn to Airbnb for authentic and real experiences that most hotel chains miss.

The preference for Airbnb is backed by data. A study by Clever Real Estate states that a survey was conducted among 1000 travellers, and 53% of them reported preferring Airbnb over others because they offer affordable booking options.

Recognizing this market shift, Airbnb now understands that, instead of targeting multiple segments, it has catered to the audience of hoteliers, including leisure travellers, business travellers, novelty travellers, and experience seekers.

Best part? The platform lies in creating experiences that traditional hotels struggle to match. Although Airbnb can provide immersive experiences to travellers, such as treehouses or yurts, this is something that traditional hoteliers often miss.

How to start an Airbnb business?

Whether you're listing an existing property or a new one, Airbnb can be a viable option in either case.

• To start an Airbnb business, you need to provide government-issued identification and obtain the necessary licenses, depending on your location. 
• Now, you will create an account on Airbnb, create a listing and provide basic information about the property, the amenities you offer and add high-quality photos that make your property stand out. 
• The description you provide about the property should be SEO-optimised so that guests can easily find you on Airbnb.
• Spend some time conducting competitor research to understand the rates competitors are offering. 

Prices of property differ depending on size, location, and the value you provide to guests. Airbnb has its AI pricing feature which suggest optimal room rates that’sprevailing in that area.

• Through an online channel manager, you can update listings across all channels in real-time. Whatever rates and availability you've on PMS, the same will be updated on the Airbnb Channel Manager. 

What else do you need to do to keep on top of traveller minds on Airbnb?

If you don't want to sound like other property owners, make your property stand out and get repeat guests, it's more about creating an experience that feels special to them. 

• When guests click on the 'BOOK NOW' button, ensure that your listing tells a story that speaks directly to them. How will they remember?

The listing should be made intentionally. The property should be made intentional, from the room colours you select to the theme or mural on the wall, or anything else. 

The name of the listing, the listing description, and the way you communicate with potential guests should be engaging and dramatic. It should provide a meaningful experience for guests; everything should be purposeful and convey a message to them.

Let's say you want to provide a family-focused stay experience; then you can add things such as kid-friendly activities or black curtains for a quick nap. 

Whether you're providing a private cabin or a treehouse, you need to align your messaging with the core purpose of your business. 

• One thing that guests often complain about is the lack of flexibility in spaces. Hosts often present false advertisements regarding service quality and guest satisfaction, as it falls below their expectations.  

It's not only about the convenience you provide to guests, but also about providing them with speedy support when they need it most. It can be the availability of staff when guests need help.

You can stand out against other Airbnb properties by adding amenities such as free Wi-Fi and intense water pressure. 

• Study extensively about who your ideal guest is and provide them with a compelling reason to stay at your property. Instead of just providing generic information on the website, tailor everything to your guests.  

For instance, imagine welcoming guests with their pets. Instead of simply stating that pets are allowed on the property, you can leave a welcome note that mentions pets or offers dog treats. This creates a unique experience for guests. 

• Upon the guest's arrival, the host can offer recommendations for local spots and experiences. These things enhance the travelers's experience.  

A study by Swift states that 67% of Millennials prefer spending on local experiences over material goods. 

Here are a few add-ons you can do on hotel’s website to sell local experiences to guests -

• The guest will treat you as the host or a local guide. Mention everything about local attractions on your website. 
• You can bring farm-to-table concepts as guests love those experiences. Start offering local produce that comes directly from the farm. 
• Design your website by connecting the local elements of that region and tying them to a compelling story. 

How can BOTSHOT help you run your property successfully on Airbnb?

Through our channel manager, you can update your property rates and room availability across different channels, including Airbnb and OTAs. 

Whether you manage a single property or multiple properties, our channel manager is synced with Airbnb, which keeps everything updated across all distribution channels. This helps you saves time and avoid double bookings.