Business

Airbnb Occupancy Rates

Is your current airbnb occupancy rate good or bad?

Sound Familiar?

Pesky Problem

You’re not sure how often your Airbnb should be booked.

In other words, you don’t know what your Airbnb occupancy rate should be. Out of all the nights your place is available, how many nights should you actually expect to have guests?

Some well established, business savvy hosts have a constant pulse on their occupancy rate. And at any given time, they know whether they’re missing or meeting their monthly or annual goal.

But for other hosts, especially for folks just starting out, the term occupancy rate just feels like jargon. What they’re really worried about is the sizable discrepancy between their initial booking expectations and the reality of their calendar. When this is the case, the question becomes, were your expectations reasonable about how often you’d be booked? Or were your expectations way too high from the start.

Let's Try This

Bite-Size Solution

Set a reasonable, profitable occupancy rate goal.

Let’s start by how to actually calculate your occupancy rate. The equation here is simple.

Airbnb occupancy rate = (booked nights / available nights) * 100

For any given time frame, such as last month or the last 365 days, how many days was your Airbnb available for guests to book? This will exclude any days that you intentionally blocked off the calendar yourself. That number of available nights becomes your denominator.

Then count up how many nights you actually had guests. This number of booked nights becomes your numerator. Then simply grab your phone’s handy dandy calculator, divide your booked nights by your available nights and multiply that decimal by 100 to get a percentage. That’s your occupancy rate.

For example, let’s say you’re calculating last month’s occupancy rate. Imagine you had 25 total nights open on your calendar for guests, since you had blocked off the other 5 nights for your own trip to your space. Then let’s imagine you hosted guests for 12 of those 25 nights. 12/25 = .48 * 100 = 48% occupancy rate.

Now when it comes to analyzing whether your occupancy rate is good or bad, there are two essential questions to ask yourself. The first one is: Does my occupancy rate keep up with local trends? Is it reasonable? For a big picture reference point, the average occupancy rate in the United States hovers just under 50%. But local averages can be higher or lower than that, so you’ll want to do some local research to better understand whether your rates are keeping pace with the local rates.

But then the second, and much more important, question is: Does my occupancy rate produce enough income for me? Is it profitable enough? At the end of the day, what matters most is whether your Airbnb business is meeting your personal needs. How many nights do you need to be booked to make your Airbnb worthwhile for you and your goals?

There are two ways to make more money with any given Airbnb: book more nights or raise the nightly price. As you raise your price, your occupancy rate can fall while still producing the same profit. As you fine tune this equation for your unique Airbnb, you always want to be clear-eyed about what occupancy rate you’re actually aiming for, and that goal should be both reasonable for your area and profitable for your bank account.

5 Minutes

Here's Your First Step

Research the local Airbnb occupancy rates in your area.

The best way to start unpacking what your Airbnb occupancy rate goal should be is to do a little local research. Start by searching something like “my location airbnb occupancy rates.” Sites like AirDNA or Awning will let you explore many large metro areas for free.

Local newspapers often have articles about short term rental trends as well. You may find out that your whole area is up or down for a given reason. This type of local context can help you understand how your place is currently performing, and what a reasonable Airbnb occupancy rate goal should be going forward.

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