Newly-crowned owners of apartments and houses, or real estate entrepreneurs often think about short-term rental housing as a means of an additional income or paying off a mortgage loan. And, of course, the first two websites that come to the mind of any newbie owner are Airbnb and Booking.com.
"Super! The first step to a successful business has been taken! ” - you think. Maybe ... But now you will face another important dilemma: is it even worth it to list your property on both resources? Or one should be enough to start with?
There is no single answer to these questions. Many novice entrepreneurs encounter this challenge at the beginning of their journey.
To make your life just a bit easier and help you choose the right way to start your short-term rental business, check out the 5 main differences between Airbnb and Booking.com.
1. Type of property
The main difference between these resources is the type of housing provided. Many are familiar with booking.com from the guest’s perspective, as this platform provides an excellent opportunity for anyone to book a hotel, hostel, Bed & Breakfast, or an apartment anywhere in the world. The option to book apartments on Booking became available in the mid-2000s.
In turn, Airbnb solely focuses on apartments, houses, and even individual rooms. Therefore, when listing an apartment on Airbnb, your main competitors are apartment owners, who earn money by renting out their private spaces.
As being said, listing your property on Booking.com will force you to compete with Hospitality industry giants like Marriott and Hyatt, even though your lovely apartment is quite in a different accommodation segment.
2. Type of guests
Guest's expectation is, probably, one of the main factors that distinguish Airbnb and Booking users.
Reserving a room on Airbnb hosted by a typical Italian Nonna, with a magnificent view of Como Lake, potential guest probably expects authentic Italian hospitality with "home away from home" atmosphere.
On the other hand, a customer that books an apartment on the Booking.com platform might have a slightly different expectation from their future experience, since they normally book full serviced hotels rather than a private bedroom or a flat.
I purposely exaggerated both examples just to highlight an existing difference between clientele of both platforms.
3. Commissions
Trust me, being a host myself, commissions is the least favorite topic for most STR (short-term rental) owners.
The commission is a mandatory payment to the service provider (in our case it's Airbnb and Booking) for each actualized reservation. In other words, you have to give up a little chunk of your revenue to either company.
Here is an example of commission % charged by both providers:
Airbnb - around 3%;
Booking.com - 12-30%
Now, it looks pretty obvious that Airbnb would be the preferred platform for hosts due to lower commission fees. Yet, there are some pitfalls you should know about.
With all the attractiveness of 3% offered by Airbnb, additional "Service fee" is charged directly to the guest. You might say that it doesn't really matter, as long as hosts are not getting charged more, but at the end of the day, you have to consider additional fees that might affect the daily rate displayed.
In regards to Booking, commissions are high, no doubt. The lowest fees are usually offered to hotel chains and large resorts, where the volume of reservations booked on OTA sites is remarkably high.
For an individual listing, the lowest commission I've personally seen was 13.5%. The highest - 19%. However, I've also heard about commissions above 20% from my colleagues in Asia. So it can totally depend on property type, location, local regulations, and general demand.
Let me know if you have experienced different commissions for your listings.
So whether you choose to list your property on Airbnb or Booking, always be mindful of additional fees and commissions that will affect the revenue and displayed daily rate. Rate parity is another beast in the STR world, but this is something I will cover in a separate article.
4. To accept or not to accept?
Both platforms have a completely different approach towards the relationship between a host and a guest.
Airbnb allows hosts to decide, whether you want to accept guests or not. Awesome, right?
Basically, you are able to decline any reservation request in case you feel unsafe or just prefer not to host certain types of guests at your property. It is totally up to you. It is common for some property owners to decline reservations from people with bad reviews from the previous host. And I deem it's amazing!
Every host has a right to choose who to welcome and accommodate at their own house.
With Booking it's the complete opposite. As I previously mentioned, your listing will get the same treatment as a hotel next door. You have no option to decline the reservation.
Obviously, there is a possibility to request a cancellation (not later than 48 hours before the arrival), but the entire process is a bit annoying and poorly structured, in my opinion.
5. Guest rating
This part is kind of a continuation of our discussion in the previous section.
As I stated, Airbnb has a well-structured identification process for each user that registers on the website. Unless the passport information and contact number are provided - the user won't be able to complete the booking until the identification verification is completed. This prevents users from registering multiple accounts in case any previous issues or negative comments received.
The guest rating system helps hosts to get more information about future guests as well as review their past experiences and feedback from other hosts.
Booking.com operates like an OTA, hence the registration and verification process is very basic. Hosts will only see the name of the guest after the property is booked. This leaves a lot of room for multiple accounts to be created by the same person in case one of the profiles gets blocked or banned by the platform. No ranking system or reviews are available on guest's profiles.
To conclude, both companies are world-leading short-term rental platforms that provide an amazing opportunity for property owners to start the STR business within minutes.
Either platform has its pros and cons, type of guests, and revenue models.
Being a host myself, I always advocate for channel diversification in order to get a larger coverage and better opportunities to attract guests to stay at your property. At the end of the day, you never know, which platform will bring you a large number of reservations or generate higher revenue until you register your property and get your first booking.
At Revolvio, we can help you identify your perfect niche as well as provide you with a full listing set-up on any platform you like. Check this form and find out how much your property can earn!
Keep in mind all the factors were discussed and share your own experiences hosting properties on Airbnb or Booking.com.