Airbnb/VRBO hosts: How to estimate likely occupancy rate?

[Huckster79]

So we are considering building a cabin/hangar on some property on a very nice strip. I don't want to just fund the build straight out of pocket at the moment, but we thought if we could Airbnb/vrbo it, then it may make financial sense to pull the trigger sooner than later on building on the land. Still just weighing options.

My question to anyone who hosts, is how does one arrive at an educated ballpark figure on income generation? I can figure out roughly what it would pull for a nights stay easy enough. BUT, is there any data available, I've not found any yet, where one could deduce an approximate occupancy rate? Obviously there's multiple factors that go into the actual occupancy rate, but it would be nice to have some way of estimating it.

Any thoughts?

 

[Checkout_my_Six]

I'd probably look at comps. Although there may not be others like this at an airfield....use ones not at an airport. Look at their bookings.

 

[dans2992]

Given the nature of the AirBNB market, unless you can talk to someone with a similar property in a similar location, it may be one of those things that you won’t know until you do it…

 

[Huckster79]

I'd probably look at comps. Although there may not be others like this at an airfield....use ones not at an airport. Look at their bookings.

Right, I was just thinking general area... As many of its bookings may not be to airplane folks, there's other recreation in the area... Estimating $150 a night or $300 a night is relatively easy... Its the how many nights out of the available ones would it be filled I'm trying to guesstimate...

I did find one site that claims to have occupancy rates for an area, says its 32% in the area I'm looking. I think maybe, if no one comes along with great technical insight, maybe I'll figure it at 20% to be very conservative to crunch my numbers, but I won't do it at all if it were unaffordable at a 0% occupancy rate either... I probably could pull it off at 0%, I just don't want to . I'm aiming to retire youngish so if I could get help paying for my retirement pad but get to use it along the way might be cool.

The wife and I figure it is time to diversify into real estate someway beyond just the traditional investing we've been doing.

 

[mandm]

What city/state? Without knowing this, very difficult to guess. Who is in your town, who comes to visit your town, do you have any big events in town, etc?

Winter is typically slower than summer in the north with exceptions for ski towns. But generally you should be pretty full if you adjust your prices right based on your demand - always seems to be deal hunters looking too. You’ll have your weekend party guests and your during the week people coming into town for work, you’ll have people who need temporary housing for a new job or just sold their house and they are looking, people in town for a program, etc. All types really.

 

[Huckster79]

What city/state? Without knowing this, very difficult to guess. Who is in your town, who comes to visit your town, do you have any big events in town, etc?

Winter is typically slower than summer in the north with exceptions for ski towns. But generally you should be pretty full if you adjust your prices right based on your demand - always seems to be deal hunters looking too. You’ll have your weekend party guests and your during the week people coming into town for work, you’ll have people who need temporary housing for a new job or just sold their house and they are looking, people in town for a program, etc. All types really.

Northern Michigan- lots of recreation everywhere. So there’s summer and winter attractions. I would assume it would be mostly vacationers w the area. So besides a strip there would be snowmobiling, mushroom hunters in spring, summer in N Michigan in summer and beautiful n Michigan fall n deer hunting- so lots of reasons folks b there at most parts of the year….

 

[mandm]

Northern Michigan- lots of recreation everywhere. So there’s summer and winter attractions. I would assume it would be mostly vacationers w the area. So besides a strip there would be snowmobiling, mushroom hunters in spring, summer in N Michigan in summer and beautiful n Michigan fall n deer hunting- so lots of reasons folks b there at most parts of the year….

I think you’ll do much better than you think occupancy wise. If you have vacancy, reduce your prices just to get people in. Once you have an established record and reviews you can charge more. Price wise for your nightly I’d think on off season nights weekdays you might be $99/night or even less. For peak nights and weekend $150-$199 sounds reasonable. This depends on the size and quality of course too. But tenants / renters do damage things so keep that in mind. Add a minimum stay and decent cleaning fee to make it worth your while. You can even have an RV, large tent, other options too.

You can create a listing to gauge interest as well but don’t accept bookings until you are ready.

 

[Brad Z]

I'll tell you, don't try to market to pilots. Frequent weather/mx cancellations will eat any profit you might see.

As far as comps, you'll want to find a host group for your area. More than likely the market is over saturated. Everywhere is over saturated.

 

[FORANE]

As a Airbnb host, I would go on Airbnb and look at the calendar for similar properties in the location you have in mind. Understand that many or most bookings happen in the 60 days prior to stay. We've seen a decrease in year over year occupancy for the last two years. We're somewhat seasonal with slow months January through March. Know that items will grow legs and disappear.

 

[Rcmutz]

I think you are seeing a decline in occupancy rates due to the rental rate inflation price increases driven by lost revenue due to Covid losses. The exact same unit I used to rent in Hilton Head at $3500 pre Covid, and I mean EXACT unit, is now $4600 for the exact same week. Prices skyrocketed, but demand being down, driving occupancy levels down, so perhaps prices will pull back some.

 

[FORANE]

Perhaps some places have increased rates. I don't think we've increased any more than the average inflation rate. I think the slowdown is due to two factors. One is post COVID people didn't travel by air or internationally. So people came to our places in much greater than average numbers than pre-covid. The second factor I believe is a slowing economy with people tightening their belts due to high prices everywhere.

 

[bflynn]

Thoughts from a pure market analysis standpoint…

Look 60-90 day out to see what the competition is -aka, the market. Now look day by day for the next week. X-Y/X is the occupancy rate.

Now look deeper - what are the differences between the ones that rented and the ones that didn’t. What kind of amenities and features did they have? How are they priced? How do they compare to your proposed rental in cost? How can you make your property highly desired and build positive ratings? Be brutally honest with yourself.

Project the occupancy rates out based on market data. What is the annual cycle, when are the heavy and light times?

Now you have data.

 

[Huckster79]

Thoughts from a pure market analysis standpoint…

Look 60-90 day out to see what the competition is -aka, the market. Now look day by day for the next week. X-Y/X is the occupancy rate.

Now look deeper - what are the differences between the ones that rented and the ones that didn’t. What kind of amenities and features did they have? How are they priced? How do they compare to your proposed rental in cost? How can you make your property highly desired and build positive ratings? Be brutally honest with yourself.

Project the occupancy rates out based on market data. What is the annual cycle, when are the heavy and light times?

Now you have data.

Excellent insight on how to use the existing tools available right on the public facing side of their sight. Excellent thought- makes perfect sense. Thank you very much!

 

[Kitch]

There is a guy in Maine that did a similar deal. beavercreekmaine.com

We haven't stayed there yet, but it seems to have a decent amount of bookings this summer. At the very least maybe someone you can reach out to for some insight.

 

[Clip4]

So we are considering building a cabin/hangar on some property on a very nice strip. I don't want to just fund the build straight out of pocket at the moment, but we thought if we could Airbnb/vrbo it, then it may make financial sense to pull the trigger sooner than later on building on the land. Still just weighing options.

My question to anyone who hosts, is how does one arrive at an educated ballpark figure on income generation? I can figure out roughly what it would pull for a nights stay easy enough. BUT, is there any data available, I've not found any yet, where one could deduce an approximate occupancy rate? Obviously there's multiple factors that go into the actual occupancy rate, but it would be nice to have some way of estimating it.

Any thoughts?

I believe you will have a dismal occupancy rate because your customer base is very narrow if you are depending on pilots, the destination location is low demand and northern tier vacation season is short.

When I looked at beavercreekmaine.com site, the first item that had me quickly close this site was no mention of ground transportation once I flew in there.

Minimally you are going to have to market to non pilots and have a product to draw them. To be quite honest,I know of no one over the last 20 years that said they were headed to northern MI for their vacation except some people going fishing or hunting. The fisherman want to on the water.

 

[Lndwarrior]

I'll cast a vote on the negative side for your consideration.

1. There are so few AirBnbs at airports that pilots don't even look for them. I know this because I had an AirBnb at our gated community airport, though it was not on the runway. In nine years I think we only got one or two inquiries from pilots, even though we are 25 miles from Yosemite National Park and 1 hour GA flight time from the San Francisco Bay Area.

2. Non-pilots will likely not want to stay on a runway because they will consider it noisy.

3. You will need to provide a vehicle for fly-in visitors, unless they can easily rent a car. Maintaining this remotely can be a challenge. If you have a manager to take care of your place they are not going to want to take care of your car (gas, mx issues, etc) as part of their responsibilities.

4. I think your estimate of 20% occupancy is not likely unless there are some specific series of events that bring large crowds to your area.

Things you could try:

1. Market the hell out of it on every social media platform. Provide regular updates. However, this will take a significant time commitment.

2. Make a deal with local fishing guides to promote your place such that pilots can fly in and the guides will pick them up for day fishing trips.

3. Encourage your extended family and every friend you, or they, have to stay at your place for their vacation.

4. Absolutely have a loaner car available. Consider listing it on Turo and using as an alternate source of income both for your place, and separately for other visitors to the area.

5. Post often on every aviation forum you can think of. Have special pilot discounts.

6. More bedrooms means more money. Have at least three.

7. Market the place to the local community - get involved with the community and make sure all locals know its available to rent for their friends and family.

8. Hire an established property manager in your area that can throw tenants your way. Yes, you will pay them a good percentage of the rental (25%?) but they will know the local market and get requests all the time for property availability.

9. Make the place unique! When people go a wilderness area to enjoy the outdoors they want the whole experience. If the place looks like a modern track home you are not going to get the same interest as if it looks like a cabin in the woods, both inside and out. Make it the cutest, warmest cabin in the area. Include a hot tub. Orient it for best views. Have a nice deck with BBQ. Make it feel like you are in the woods, even if you are on the runway. Get professional pics for marketing! Seriously, spend a few bucks and get the local real estate photographer to take the pics for you. You only have a few seconds to catch the eye of someone scanning thru AirBnb. The images need to stand out from the rest.

That's all I've got.

Hope it works out for you.

Gary

 

[Huckster79]

I'll cast a vote on the negative side for your consideration.

1. There are so few AirBnbs at airports that pilots don't even look for them. I know this because I had an AirBnb at our gated community airport, though it was not on the runway. In nine years I think we only got one or two inquiries from pilots, even though we are 25 miles from Yosemite National Park and 1 hour GA flight time from the San Francisco Bay Area.

2. Non-pilots will likely not want to stay on a runway because they will consider it noisy.

3. You will need to provide a vehicle for fly-in visitors, unless they can easily rent a car. Maintaining this remotely can be a challenge. If you have a manager to take care of your place they are not going to want to take care of your car (gas, mx issues, etc) as part of their responsibilities.

4. I think your estimate of 20% occupancy is not likely unless there are some specific series of events that bring large crowds to your area.

Things you could try:

1. Market the hell out of it on every social media platform. Provide regular updates. However, this will take a significant time commitment.

2. Make a deal with local fishing guides to promote your place such that pilots can fly in and the guides will pick them up for day fishing trips.

3. Encourage your extended family and every friend you, or they, have to stay at your place for their vacation.

4. Absolutely have a loaner car available. Consider listing it on Turo and using as an alternate source of income both for your place, and separately for other visitors to the area.

5. Post often on every aviation forum you can think of. Have special pilot discounts.

6. More bedrooms means more money. Have at least three.

7. Market the place to the local community - get involved with the community and make sure all locals know its available to rent for their friends and family.

8. Hire an established property manager in your area that can throw tenants your way. Yes, you will pay them a good percentage of the rental (25%?) but they will know the local market and get requests all the time for property availability.

9. Make the place unique! When people go a wilderness area to enjoy the outdoors they want the whole experience. If the place looks like a modern track home you are not going to get the same interest as if it looks like a cabin in the woods, both inside and out. Make it the cutest, warmest cabin in the area. Include a hot tub. Orient it for best views. Have a nice deck with BBQ. Make it feel like you are in the woods, even if you are on the runway. Get professional pics for marketing! Seriously, spend a few bucks and get the local real estate photographer to take the pics for you. You only have a few seconds to catch the eye of someone scanning thru AirBnb. The images need to stand out from the rest.

That's all I've got.

Hope it works out for you.

Gary

Great insights! Definitely need to consider the negative sides or you’re not doing your due diligence…