South Africans cashing in on Airbnb – and you can too

Airbnb hosts in South Africa earned more than R4 billion last year and most of their guests were domestic tourists.

This figure is a 25 percent increase from pre-Covid levels in 2019.

The increased domestic popularity of Airbnb has also helped spread tourism opportunities to less common tourist destinations across the country, which has significantly benefited short-term rental listings outside of Gauteng and the Western Cape.

The company’s 2023 Economic Impact Report reveals that these are the South African areas with the fastest-growing stays on Airbnb:

– Mafube, Free State

– Impendle, KwaZulu-Natal

– Nala, North West

– AbaQulusi, KwaZulu-Natal

– Witzenberg, Western Cape

– Emalahleni, Mpumalanga

– Hantam, Northern Cape

– Mahikeng, North West

– Chief Albert Luthuli, Mpumalanga

– Emakhazeni, Mpumalanga

Grant Smee, managing director of Only Realty Property Group, says the increase in Airbnb tourism last year was driven by domestic travellers who accounted for more than 60 percent of the total nights spent on the platform.

“While cities like Cape Town benefit from a steady stream of international visitors, domestic tourism in the rest of the country took a massive blow during the pandemic. However, the 34 percent increase in local tourists choosing to stay with Airbnb between 2019 and 2022 is a strong indicator of the sector’s recovery.”

The increased domestic popularity of Airbnb has also helped spread tourism opportunities to less common tourist destinations across the country, he says.

“This is evidenced by the 2023 Airbnb Report which shows that, with the exception of Witzenberg, none of the ten fastest-growing cities on the platform are from the major tourism regions. Instead, stays in cities like Mafube (Free State), Impendle (Kwa-Zulu Natal) and Nala (North West) have all seen more than a 125 percent increase in demand since 2019.

“It’s clear that Airbnb is helping to lower the barriers for tourism entrepreneurs across the country – giving short-term rental owners a much-needed boost in a period characterised by high interest rates and rising inflation.”

Furthermore, he notes that the majority of Airbnb hosts aren’t full-time hospitality professionals, but, rather, homeowners looking to make ends meet.

“Over half of the hosts surveyed by the 2023 report shared that they started hosting on Airbnb to cover the rising cost of living, while a further 44 percent shared that hosting had given them the financial security needed to stay in their homes.”

For those with an additional property or some extra space in their homes, choosing to list it as a short-term rental may seem more financially lucrative than securing a long-term tenant. However, Smee stresses that while the financial and flexibility benefits of this rental option are significant, there are also some potential drawbacks.

“Short-term rentals often require higher operating costs, including cleaning, maintenance and management fees due to the higher turnover. The management requirements of short stays can also be an administrative headache due to the need to manage multiple bookings, guest enquiries and check-ins and outs.”

Unlike long-term rentals, short-term rental demand can also fluctuate based on the season, potentially leading to extended vacancy periods and difficulties maintaining a consistent cash flow.

“Also remember that when listing on Airbnb, hosts are required to pay a service fee to use the platform, which is typically three percent of the booking subtotal plus VAT.”

The report states that, in 2022 – a rebound year for travel, Airbnb supported almost 50,000 jobs and contributed more than R23,5 billion to the South African economy – a 115% increase from pre-Covid.

Amid increasing living costs, local hosts and their communities are also benefitting, with the typical South African host earning around R32,500 in 2022.

“Half of hosts across South Africa said the money they earn from hosting helps cover the rising cost of living, and over a third said the additional income helps them make ends meet.”

How you can earn more money on Airbnb

Smee says maximising your profits in the short-term rental market requires a strategic combination of effective management, marketing, and customer service. These are his top tips for getting the most out of your listing:

– Have a strategic pricing strategy: Platforms like Airbnb offer dynamic pricing, which uses an algorithm to adjust rates based on demand, local events and seasonality. You can also attract guests by offering discounts for longer stays or last-minute bookings.

– Carefully prepare your property: Keep it clean and well maintained and invest in quality furnishings and décor to make your property stand out.

– Invest in professional photography: High-quality photos can significantly improve your listing’s appeal so make sure you capture it in the best light.

– Optimise your listing: Write a detailed property description that includes relevant keywords to improve search engine visibility. Be sure to highlight the unique selling points and amenities of your listing.

– Encourage guests to leave positive reviews after their stay: A high rating will impact your booking rates.

– Communicate effectively: Respond quickly to guest messages and address time-sensitive issues to maintain a high level of customer service.

– Consider hiring a property management company: They can handle day-to-day tasks and help streamline check-in and out processes for maximum guest convenience.

– Personalise the guest experience: Special touches like welcome gifts and local recommendations can go a long way in creating a memorable stay and securing repeat guests.

– List your property on multiple platforms to expand reach and maximise occupancy.

“I would also recommend using analytics tools to track your rental performance, occupancy rates, and revenue and adjusting your strategy based on these insights, he says, adding: “The short-term rental market in South Africa is fiercely competitive so adapting to market changes and continuously improving your property and customer service are crucial for maximising profits.”

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