With the advent of vacation rental platforms like Airbnb, hosts, and travelers have been able to list and book properties smoothly. For this very reason, vacation rental platforms attract millions of users looking for perfect places to stay. Or, in the case of property owners, reach their potential customers. The vacation rental market is constantly growing, with an estimated revenue generation of US$ 100.30 billion in 2024. The industry will boom over time, as stats also state that there will be a CAGR of 3.14% from 2024 to 2028. But how do vacation rental platforms like Airbnb make money?
As you read on, you will learn how vacation rental platforms work and generate money.
What are the Best Vacation Rental Platforms?
While we agree that Airbnb is the most popular vacation rental platform and has been in the spotlight for the longest time, it is not the only one out there. There are other vacation rental websites, too, that cater to the various needs of users and stand out in their unique offerings.
Here is a list of the best vacation rental platforms that property owners and guests can consider for listing and booking:
Best Vacation Rental Platforms:
- Vrbo
- Booking.com
- Expedia
- Trip Advisor
- HomeToGo
- Tripping
- Onefinestay
- Homestay.com
How Do Vacation Rental Platforms Like Airbnb Work?
Online vacation rental marketplaces list properties submitted by owners. Travelers can look them up on vacation rental websites and book through them. In other words, apps like Airbnb connect hosts and guests in the most hassle-free manner.
Vacation rental apps work differently for hosts and guests. Let us see how they work for the two user groups:
How Do Vacation Rental Platforms Work for Guests?
- Travelers sign up on the vacation rental apps. They can register through contact numbers, email IDs, and social media accounts.
- They can then set up their profiles and add details like name, address, and profile picture.
- Users can enter the location and search for properties. They can also search using filters like price, property type, number of rooms, available amenities, etc.
- Guests can request stays and book them on their preferred dates after confirmation.
- Vacation rental apps provide multiple payment options. Users can pay via credit/ debit cards, GooglePay, etc.
- After booking and payment confirmation, users can enjoy their stay in the place of their choice.
How Do Vacation Rental Platforms Work for Hosts/ Owners?
- Property owners have to register on vacation rental apps to list their properties.
- Hosts provide the necessary information, including property type, address, price, and pictures. Some vacation rental platforms like Airbnb let hosts schedule professional photography services for their listings.
- Hosts receive notifications when guests request to stay in their place.
- They can accept or reject requests. If property owners have any concerns regarding the maintenance of their place, they can contact guests and let them know.
How Vacation Rental Platforms Like Airbnb Make Money
Online vacation rental marketplaces generate revenue in more than one way. They charge a certain fee from hosts and guests for using the services of vacation rental websites. Let us see in detail how vacation rental apps make money.
Host Service Fees
Vacation rental platforms make money by charging hosts transaction fees. Hosts get to reach their potential customers and get increased visibility using online vacation rental platforms. In return for using the platform, hosts pay a certain amount that covers the cost of maintaining the platform.
Airbnb charges about 3% as host service fees. It can go up depending on the location and other factors. On the other hand, Vrbo charges about 5%.
Guest Service Fees
Charging service fees from guests is another way vacation rental platforms generate income. Vacation rental platforms help guests find the perfect places for their stay. For using the services of the vacation rental sites, guests pay some amount as service charges.
Guests using the Airbnb site pay 14% of the total booking amount.
Premium Services
Hosts can buy subscription packs based on their needs. For instance, there are monthly and yearly packages. It is one of the popular monetization strategies, bringing in more revenue for vacation rental platforms. By subscribing, hosts can list several places. Also, they can enjoy other benefits like placing their listings above others and more.
In-App Advertising
Advertising is another way that enables vacation rental platforms to generate revenue. Partnering with businesses and placing ads on the platform can help make additional income.
How to Launch a Vacation Rental Platform Website/ App?
Getting your vacation rental business successful is all about following a systematic approach, from choosing the tech stack and incorporating the essential features into your vacation rental app to marketing your app. Here is the step-by-step approach to launching your vacation rental business:
Conduct Market Research
Analyze the current trends in the vacation rental industry and the demand. Identifying your target audience and their pain points is critical. Solving problems and offering better solutions than competitors can position your business better.
Vacation rental platforms are about providing efficient solutions that enable users to book and list. Your target audience may be travelers, property owners, or both. Understand their needs and ensure your vacation rental app addresses their problems.
Define the App Functionality
The next step in building a vacation rental app is defining the app’s functionality. Start with defining the core functionality and gather user feedback to include additional features.
Here are some of the key features found in the top vacation rental platforms:
Profile Creation: Hosts and guests wanting to use vacation rental platforms create profiles as a first step. They give the necessary details, including name, contact number, and address. Hosts add quality pictures of properties.
Property Listings and Search: Vacation rental apps list properties of various types in different locations. Users can use filters to search for places.
Booking and Payment: Guests receive a confirmation notification from hosts if they accept booking requests. Users can pay using the payment method of their convenience securely.
Review: Guests can rate and review based on their stay experience. Users can use the valuable feedback to make informed decisions.
Push Notifications: An efficient notification system to send information regarding bookings and payments for users.
Multilingual Support: Some of the best vacation rental apps support multiple languages and attract a wider user base.
Choose the App Development Method
You can choose between custom development and readymade solutions for your vacation rental app. Custom software development essentially is developing your app from scratch, hence more development cost and time. Readymade solutions come with prebuilt features and functionalities, enabling little customization.
You can choose either way for your vacation rental platform, weighing the pros and cons and your business goals.
Summing Up
You can leverage the popularity of online vacation rental marketplaces and demand among travelers and property owners alike for efficient solutions to enter the market. Partnering with an efficient team can be fruitful if you wish to launch a vacation rental app.
We are a dedicated team with years of experience enabling entrepreneurs to launch vacation rental apps with our robust solutions. Our Airbnb clone app is a comprehensive product that will help you make it big in the vacation rental industry.
If you have queries or want a demo of our product, you can write to us at:
Email ID: [email protected]
WhatsApp No: +91 9222 47 9222
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