Definite Reasons Why Vacation Rental Booking App Should Be Your Next Business Venture

Know exactly how you can cut in from the narrow revenue space

As enticing it might sounds to the people with a spark for the business, Airbnb basically does is rent the vacation homes for a processing fee.

Just the processing fee?

NO!

There are many more cuts that Airbnb takes which are utmost hideous for the normal hosts, guests, and the aspiring Airbnb business to perceive.

We have intensively researched on the Airbnb model and have come up with the insightful strategies of Airbnb similar business so as to help the startups leverage the advantage of our research in their business development by our exclusive campaign Similar Application Development by TRooTech.

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How can Vacation Rental Booking App Make Money Apart From the Processing Fee?

Basically, Airbnb earns money by the means of processing charges and surcharges. But still there are a lot many methodologies adopted by Airbnb in terms of revenue generation which does not at all affect it’s customer acquisition.

Let’s us have a look at how Airbnb charges the processing fee.

Airbnb charges a host fee every time a booking is completed.

When a reservation is confirmed, the portal charges its hosts a service fee of 3% and may range from 3 – 5% depending on the cancellation policy selected by the host.

The host service fee is calculated from the booking reservation and is automatically deducted from the payout to the host.

What You Should Do: Make sure that the host put appropriate pricing of their listing neither too high nor to low.

Airbnb charges a guest fees every time a booking is completed.

When a reservation is confirmed, it charges its guests a service fee between 5% and 15% of the subtotal.

In the areas mainly European Union or China where Airbnb is required to collect VAT, it combines the VAT with the service charge.

Here the altogether amount appears to be a big amount but is still lesser than the hotel price and so is affordable by the guests.

Apart from this, the guest service fee is calculated on the basis of various dynamic factors – the reservation subtotal, the number of days they reserve the booking for, and the types of the accommodation.

What You Can Do: Make sure you have enough information about the VAT and other types of taxes before launching such a bed and breakfast portal so as to form generalized policies of guest fee.

Airbnb charges the hosts who offer experiences a 20% service fee.

Now, this amount of the host service fee is calculated from the price that the hosts set for the related experiences for the guests to rejoice.

This service fee is automatically deducted from the payout to the host from their booking.

Hosts who participate in nonprofit partnerships to offer experiences don’t have to pay the host experience fee.

What You Can Do: On the basis of the experiences offered by the host, the guests should be given the opportunity to accept/reject the experience. If they do accept they can be charged for the service.

In order to have a visually appealing listing and showcasing the space in search, professional photographers are provided by Airbnb to click pictures of the listing which are further approved by Airbnb and then are posted.

Here, the photographer provides the hosts with at least 12 photographs of their listing and spends approximately about an hour to get the shots right.

This is done when the hosts request for the photographers, they are matched and the listings are captured.

Usually, the price of capturing depends upon how big the space is and the location of the host photographing a studio will generally cost lesser than a home with bedrooms and the like.

This indeed is a smart way to make money.

Once, the photographs are approved by Airbnb, they deduct the total cost of the photoshoot from the next scheduled payouts until the full amount is collected.

What You Can Do: Ask for a sum of money for booking the photographers instead of taking the cut from the next booking to give air to surcharge.

The hosts on Airbnb can list their space ranging from multi-unit renters to home-sharers.

The differentiation is based on the three categories:

• Shared room: These rooms are for the flexible travelers who don’t mind sharing a room and an accommodation at a budget-friendly price.
• Private Room: These rooms are for the travelers who prefer privacy but don’t mind a little interaction. This is the midway to not being too extravagant and still valuing the privacy.
• Entire Flat/Home: These spaces are for the travelers who look out for the homes away from the homes and value privacy at the most. This is the most expensive option for the guests.

What You Can Do: A similar differentiation of the room types can be beneficial when looked from the management point of view

Also Read: Important Keypoints You Should Keep In Mind While Developing Rental Booking Business Like Airbnb

Surcharge by Airbnb

A surcharge is mostly levied by Airbnb as a penalty from the unacceptable behavior to the smooth functioning of the Airbnb community.

Below we present you the surcharges for the hosts and the guests.

Since cancellations have a huge impact on the guests’ plan and ultimately affect their trust in the portal, Airbnb imposes some penalties.

If the host cancels the reservation before more than 7 days of check-in, Airbnb deducts $50 from the next payout.

Similarly, if the host cancels the reservation within the 7 days of check-in, Airbnb deducts $100 from the next payout.

Airbnb offers a variety of cancellation policies to the host to impose in case the guest cancels the reservation.

• Flexible cancellation policy:

The guests can avail full refund 1 day prior to arrival.

• Moderate cancellation policy:

The guests can avail full refund 5 days prior to arrival

• Strict

The guests can avail 50% refund up until 1 week prior to arrival.

• Super Strict 30 days

The guests can avail 50% refund up until 30 days prior to arrival.

• Super strict 60 days

The guests can avail 50% refund up until 60 days prior to arrival.

• Long Term

This applies to the reservations of 28 nights or more. The guest is refunded with the first month down payment when they give a notice prior 30 days for the termination of the lease.

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How Additionally You Can Earn from Airbnb?

According to my understanding, the business aspects in which additional functionality is added in the application for the convenience of the customers, money can be made.

Just a little caution is to be taken here – The basic motto of the business should not affect this additional costing.

Undoubtedly, Airbnb is a comprehensive business and still there a lot many areas in which money can be made in a way that won’t be an extra burden for the guests.

Here carefully study some more additional ways to make money from your vacation rental booking app.

Airbnb charges no prices for the listing of the properties on the portal and it is able to build a sustainable customer base.

Commemorating this step of Airbnb, what you can do is acquire a loyal customer base in the form of the service providers i.e. hosts acquisition.

Then after you attain a milestone and become a default bed and breakfast platform for the customers, you can introduce paid listings and levy additional charges from the hosts..

The featured listing in Airbnb is only for the destinations, attractions, and similar trip related experiences.

Leveraging an additional advantage to which you can ask your hosts to feature their listing and get more requests and proposals.

This listing will work the best for the hosts who aggressively look for the filling up their space during a particular period of time.

For the ease of managing the property, Airbnb on requests of its host came up with the feature to add co-host(s) who can manage their property and take considerably noteworthy actions and decisions on their behalf.

This is kind of a convenience for the hosts and so they won’t mind paying a charge for additional assistance.

This is where you will be able to make a cut from the existing system.

Currently, since photography for the listing is a new feature by Airbnb, it charges only for the photography.

Here is where there is a scope for charging the hosts from the rescheduling and canceling of the photoshoot.

If the guests are matched with the photographer, they can schedule the shoot directly. Then the review process might take up another week or 15 days. So, the Airbnb customers have to wait for their own professional photos and choose to list their space with their own photos.

Diving into this gap, why not propose for the service wherein, the hosts move to urgency and can get a photographer within the list number of days, indeed at a bit high price.

Key Takeaway

We are a profoundly recognized application development firm as well as stated by the SiliconIndia. We understand the costing and structure of the development of platforms for an application similar to Airbnb.

With the best of the business ethics that we follow, we believe in charging you what is apt but definitely, we seek your help to assist us to come up with this estimation.

Tell your requirement and we will get back to you at the least possible time with the price that gives quality, sustainability, futuristic goal for expansion.

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