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The Top 5 Airbnb Trends to Watch Out for in 2021

As the year comes to an end, it’s safe to say that Airbnb trends and insights have gone through a rollercoaster of fluctuations within the past year. With tests for COVID-19 more widely available, destinations finding ways to safely reopen without the need for 2-week quarantines, and a vaccine already in sight, constant change is the new “normal”. With a more positive outlook on the pandemic front,  the predictions for Airbnb travel trends and insights for 2021 are highly anticipated by those waiting for the markets to bounce back. Data analytics and accurate information play a vital role in understanding these predictions for the next year as Airbnb hosts, property managers, destination marketing organizations (DMOs), and vacation rental professionals alike are buckling up their strategies and tactics for business in 2021.

Here are the top 5 Airbnb travel trends and insights for 2021 based on the current climate in the short-term rental industry:

Table of Contents

1. Year-over-Year (YoY) growth in Airbnb bookings will bounce back eventually

North America
YoY growth North America Airbnb trends

Throughout the year, the U.S. experienced diverse responses to the pandemic as some states enforced more strict stay-at-home orders while other states still have yet to enforce strict lockdown procedures. This varied response to the pandemic is reflected in the data trends of YoY growth in different regions of the U.S. and sets the foundation of which Airbnb trends will continue into 2021. 

One factor that may change the predictions is the advent of the COVID-19 vaccine. On Friday, December 11, 2020, Pfizer and BioNTech announced the historic first authorization of a COVID-19 vaccine in the U.S. in an effort to deliver hundreds of millions of vaccine doses to Americans by the end of 2021. The vaccine will be given to healthcare workers and high-risk elders in care facilities first, but how soon the vaccine will be available to other civilians is still up in the air. If the vaccine is successful at keeping American travelers safe from COVID-19, 2021 may be able to see more drastic YoY growth in the average number of bookings for properties. 

Currently, the U.S. is still experiencing the devastating effects of the pandemic as some states are once again shutting down, such as New York’s ban on indoor dining, and a patchwork of fresh restrictions on social distancing in other states. YoY growth increased in only a select few major U.S. destinations.

As shown in the graph, the YoY growth of bookings in Big Bear, California grew even more in the 4th quarter of 2020 than compared to Q1. We can infer from this trend that Big Bear will continue to thrive as a four season resort destination in 2021. On the other hand, several other American cities have yet to reach pre-COVID levels.

This individualistic course of action from each state spares no room for a unified, solid trend that defines the predictions for vacation rentals in the U.S. However, Airbnb hosts and other short-term rental industry professionals can take a closer look at the data for each state and how each has performed during each quarter of 2020 to predict the near future in 2021. 


In Europe, the Airbnb trends accumulated from 2020 indicate that despite several hopeful factors, Europe has yet to see drastic improvements in their YoY growth for Airbnb. The Airbnb trends for 2021 in Europe point towards a slower climb towards normalcy as each European country continues to battle their own COVID-19 cases within their borders. 

This December of 2020, a new and more infectious strain of COVID-19 shut down Europe, causing a new wave of travel bans and restrictions, creating a logistics crisis in the U.K., and hitting European stocks quite severely. About 18 million people in Southeast England went back into lockdown, an event that would certainly cause Great Britain’s YoY growth in booking to decrease once again going into 2021. We can see from the trends this year how tremendously cities in Great Britain have had to pull back from their Airbnb bookings, and we can expect the same from this new wave of COVID-19 infections.

In other European cities, we can see a similar declining trend in Airbnb booking growth as the year comes to an end. Europe will continue to balance this new and infectious COVID-19 strand with the introduction of the new vaccine going into 2021, so it’s vital that Airbnb hosts and vacation rental professionals to keep track of the YoY growth trends during this time.

Going forward, the Airbnb trends and insights will reflect all of the different factors that have impacted the YoY growth in Airbnb bookings in different fluctuations. Short-term rental professionals can use this information to understand where their current strategy stands each quarter and use each data point as a benchmark to improve or address different pain points.

YoY Growth 2020 Asia Airbnb Trends

Major cities in Asia were the first to experience the deadly effects of the virus, control the virus, and also to experience second waves of infections. Going into 2021, the Airbnb trends and insights for Asia indicate that although many cities in Asia have controlled their infections, it will still take a significant amount of time for booking levels to bounce back to ‘normal’.

Several different Asian destinations such as Thailand, Tokyo, Hong Kong, and South Korea have implemented mandatory 2-week quarantines for any foreigners coming into their borders in order to avoid new infections from outside visitors. This restrictive measure on travelers has had a significant impact on the YoY growth of bookings on Airbnb because travelers are deterred from traveling to these Asian cities with the requirement to pay out-of-pocket expenses to quarantine.

Going into 2021, there is no definite date when the 2-week quarantines will no longer be mandatory. Instead of only relying on current events and news, vacation rental professionals should also rely on accurate data reported from each major city to understand how profitable vacation rentals could potentially be in 2021 because data serves as an accurate precedent for upcoming trends.

Although different cities of the world are experiencing different phases of the coronavirus, the majority of experts predict “a rebound in international tourism in 2021, in particular by the third quarter of 2021, while around 20% expects it to occur only in 2022”, according to the World Tourism Organization.

This prediction points towards a more hopeful future of bringing YoY growth of Airbnb bookings back to normalcy. As hosts, property managers, tourism boards, and financial institutions wait for this prediction to become reality, they can focus their efforts on preparing for this trend with Airbnb insights that help solidify their business model for 2021.

*Note* The YoY growth shown in the graphs is not the platform-wise YoY growth in Airbnb bookings, but instead the YoY growth of the average number of bookings for properties that are available in both 2019 and 2020. If you are interested in the YoY growth in bookings platform-wise (or gross booking value) visit here

2. Beaches are still trending destinations for Airbnbs in 2021

As the whole world continues to navigate the new ‘normal’ for travel, some destinations in the world have suffered more than others from travel restrictions and lockdowns. Despite the uncertainty of the travel industry, people all over the world are still hopeful of a future that allows safe travel. Many travel itineraries and trips for 2020 have been canceled, but more importantly, they have been postponed until 2021. Now that 2021 is already on the horizon, which destinations are trending? 

The easiest way to find this out is to do an analysis of internet searches all over the world. Using several different tools, Airbnb hosts and other professionals in the travel industry can find out where travelers will flock to once more restrictions are lifted by looking at the numbers. Understanding the numbers, demographics, and overall measurements in the travel industry for the upcoming year is a vital tactic to start strategizing for short-term rental business. 

Consumers and travelers are already looking forward to the summer of 2021, the summer that could redeem the time people spent cooped up in their homes with cabin fever. With hopes high and the case of the travel bug going around, it’s no surprise that the majority of trending searches for travel destinations relate to most beaches and exotic island destinations.

Our data analysis on Airbnb reviews suggests that the appearance of the word “beach” increased by 2.7x during the pandemic, and will continue to spike in popularity. According to internet searches, there is a surge in searches for these specific destinations:

  • The Maldives
  • French Polynesia
  • Los Cabos, Mexico
  • Miami- The booming business of short-term rentals in South Florida 
  • Maui and Oahu
  • Punta Cana
  • Orlando
  • Las Vegas
  • Riviera Maya, Playa del Carmen, and Tulum
  • Cancun

All of these destinations point towards the public’s movement toward more secluded areas and locations that are relaxing, vacation-style getaways. This trend indicated a huge shift from business travel within heavily populated metropolitan areas to more remote and private areas.

3. Properties optimized for domestic tourism are on the rise

We’re not sure how long it will take for international travel and tourism to bounce back completely, but one thing is certain: domestic tourism and travel are some of the biggest Airbnb trends for 2021. 

Travelers looking for new, innovative ways to satisfy their desire to explore new destinations have fueled the booming popularity of domestic tourism. This upcoming Airbnb trend has already manifested in the last few quarters of 2020 as travel bans and restrictions lifted in some cities while others shut back down.

In other words, visiting local attractions and destinations within their own borders is a huge trend for the short-term rental industry that will stay relevant going into 2021 as people continue to search for staycation getaways to escape both cabin fever and the current international travel bans. 

One interesting result of the booming domestic tourism trend in the short-term rental industry is that properties in domestic locations near cabins, beaches, or mountains surprisingly experienced huge growth in 2020. These domestic destinations hit their best numbers while most short-term rentals in urban areas continued to decline. This shift in the movement of travelers flocking to more secluded areas is a significant key indicator of where STR professionals should invest in next in 2021.

In particular, this vacation rental trend is significant to hosts and short-term rental professionals because this key insight can help them re-strategize and pivot their business strategies based on different properties, locations, and amenities that will attract domestic travelers. Vacation rental professionals can use this data to visualize their objectives and goals for the new year and understand the new type of demographic they need to tailor their niche to (domestic travelers). 

As hopes are high and the desire to travel continues to fester, it’s important that vacation rental professionals understand the sentiment of the data trends and re-prioritize their resources where needed.

Want more accurate insights?
Stay up-to-date with the current climate of the short-term rental industry at any moment, for any location.

4. More Airbnb properties are becoming long-term stays

Remote work is now more important than ever. This whole year, companies all over the world pivoted towards a more remote-friendly environment, getting rid of unnecessary physical presences, office buildings, and more. ‘Work from home’ is a defining trend in 2020 that will continue to shape the world’s future of telework into 2021.

As we approach the new year, workers now place emphasis on the importance of being able to work remotely. The surge of remote jobs will continue into the new year as workers re-prioritize which tasks can be completed through video conferencing or emails rather than in-person. The WFH trend is highly relevant for Airbnb or vacation rental professionals because now, Airbnb listings are more likely to be booked for long-term stays.

The reasoning behind this trend is that travelers are no longer restricted by time or location to their jobs. Now, they can extend their stays in a destination while working remotely. Another huge factor behind this trend is that people now have the flexibility from remote work to try living in different areas or neighborhoods that might have a lower cost of living or a better quality of life.

Rental property hosts and short-term rental professionals can leverage this trend for their properties on Airbnb or VRBO in 2021 by strategizing their pricing model for their properties to accommodate long-term or mid-term stays. Instead of taking on several guests that only stay one or two nights, it would be more profitable and mutually beneficial for the STR property owners to rent out their places for a longer period of time (15+ days). One way that vacation rental professionals can promote this is to offer discounts for longer stays (2 weeks or longer). 

According to Airbnb’s survey, there was a 128 percent increase in reviews mentioning words like “relocation,” “remote work,” and “trying a new neighborhood,” when it compared July to September of this year to the same time last year. These widely-searched phrases reflect the buzzwords that Airbnb hosts and STR professionals should continue to monitor within the next year. They can leverage these trending Airbnb buzzwords to tailor their rental property services to a specific demographic. 

As the future of both travel and work continues to evolve, consumer behavior will also continue to change. Professionals in the short-term rental industry should monitor these trends to keep track of consumer confidence in vacation rental services or properties. Reviews that mention “trying a new neighborhood” or “relocation” are indicative of the next, biggest trend about consumer behavior: movement from metropolitan areas to satellite cities. 

tendencias de airbnb 2022

5. Airbnb guests are moving from metropolitan areas to satellite cities

As a result of the remote work trend, there is significant movement from heavily populated metropolitan areas to smaller, satellite cities around the area. Workers are realizing that they now have the freedom to relocate to wherever they want because now they are not bound to a specific location because of their work.

This trend was especially apparent as the U.S. experienced mass, unprecedented levels of people moving out of the Bay area or New York to more affordable cities with cheaper costs of living as remote work gave them the flexibility to do so. 

Our data analysis of reviews illustrates this mass movement from urban areas to more secluded areas: the top trending buzzwords found in property reviews include “getaway”, “coastal”, “hut”, “garden”, “farm”, and “cabin”. The combined connotation of this list of buzzwords points toward guests’ sentiment to find more secluded getaway destinations away from their usual, highly-populated urban areas.

Hosts, property managers, and other vacation rental professionals can follow this flocking movement of travelers to new areas outside of large, metropolitan areas and focus their strategy on these satellite cities or outskirt areas. 

Tourists and travelers looking to move to a new neighborhood now have the flexibility to live in areas that are better tailored to their own lifestyles without having to completely commit to the location with a mortgage. Alternatively, Airbnb and other vacation rental platforms make it possible for those looking to relocate to experience living in a specific area outside of their usual home base in metropolitan areas.

In coordination with the Airbnb trend of long-term stays, this trend of moving to satellite locations allows vacation rental professionals to leverage the newfound flexibility of relocation and tailor their rental properties to accommodate this trend. As more people move towards smaller satellite cities, guests and visitors are looking for unique experiences and rental properties that can accommodate their stays. 

The future of travel may be uncertain, but STR professionals can leverage the power of data and Airbnb trends to re-prioritize and strategize for the new year. Some other key considerations to keep in mind include: consumer and business confidence, economic impact, and government support. The world is still experiencing a global recession that greatly influences consumers’ spending decisions, their travel behaviors, and the different measures governments all over the world will take to support tourism.

Professionals in the short-term rental industry must stay prepared for several different factors in 2021, such as shorter booking lead time due to the uncertainty of the pandemic or the continued, drastic shift from hotels to short-term rentals. The best practice of strategizing for the new year is to practice resilience with the help of accurate Airbnb data and insights. 

Blog posts

Choosing a Vacation Rental Data Platform

Table of Contents

Vacation Rental Data Platforms in the Market

How to assess which vacation rental analytics is the right one for you can be a complicated decision. There are a few key players providing short-term rental analytics services, namely AirDNA, See Transparent, Alltherooms Analytics and Airbtics. Having access to the data can be very useful in the decision making process for people in the short-term rental business, but the question that most ask is which platform should they choose? Hence, we did a comparison between those platforms to determine how each of them benefit the property investors and operators in different ways. 

Background Information of those Platforms

Amongst the four companies, Alltherooms Analytics was founded in 2013, followed by AirDNA in 2014, SeeTransparent in 2016 and Airbtics in 2019. In terms of expansion of their company, AirDNA has the greatest team, with 52 employees in two of their offices, Denver and Barcelona. SeeTransparent, AlltheRooms Analytics and Airbtics have a smaller scaled team in Madrid, New York and London respectively. All of these companies have access to worldwide vacation rental data through bookings from Airbnb and VRBO/Homeaway. In addition, SeeTransparent includes booking data from booking.com and Tripadvisor while Airbtics has plans to include data from booking.com starting in March 2021.

Reliability of the Vacation Rental Data

The best way to determine the reliability of vacation rental data is to understand how companies get those data. With up to 10 million property listings published on Airbnb and VRBO, some methods used by the companies include:

  • Web scraping to extract publicly available information such as the daily rates
  • Receiving booking information from PMS software or channel management softwares
  • Directly getting data from Airbnb hosts 
  • Interviewing Airbnb hosts 
  • References from previous clients 

We believe another method that would further prove the reliability of the data is having a consortium or committee where they objectively review the process and quality of collecting the data. This would ensure the accuracy and transparency in the vacation rental data industry.

Purpose of having Vacation Rental Data

Property operators (Host / Managers)

With the growing demand for vacation rentals, competitions across different regions are also increasing. Hence, by having data of the competitors, property operators can compare it against their listings and the market trends to better strategize on ways to increase their revenue. There are some features from the vacation rental data platforms that can be useful for the property operators. Thousands of property managers around the world are already tapping into these resources to help them make better decisions and many of them have seen their revenue increased with the help of those data. 


Airbtics leverages the power of big data to help property operators with dynamic pricing, as well as to increase their booking rate and inventory efficiently. We provide two types of data through application programming interface (API); near real-time booking data from Airbnb and VRBO as well as 30 days of future data on supply, demand and rate. These data are useful for dynamic pricing. Finding property owners who are looking for property managers are usually expensive and time-consuming, so Airbtics generates a list of newly created Airbnb listings per city on a weekly basis. With the rapid growth of the East Asia market, do you know that Chinese tourists are now the biggest outbound travellers? We are able to help property operators understand their platforms like Tujia.com, Yanolja, etc. 

Airbtics has the option of checking the top performing homes and filtering data between super hosts or normal hosts on its dashboard, so property operators can easily identify their strongest competitors. They are also able to detect the pricing strategies used for other listings, which include mid-term rental, max fill-rate and weekend high, so property operators can use that as a reference to set their own pricing strategies. In terms of revenue projection, Airbtics has come up with the short-term rental calculator, which helps to forecast the revenue of a vacation rental property.   


AirDNA offers information on the booking pace of properties in the specified market, ratings on rental demand, rental settings of competitors which includes cancellation policy and minimum stay, as well as Airbnb ratings based on check-in, accuracy, value, location, communication and cleanliness. 

AirDNA also has data that can help property operators set their optimum ADR of their listings. Their dashboard shows real-time availability of competing properties for up to 6 months into the future and the prices they were booked for. Secondly, they have the forward modeling, where they identify upcoming seasonal shifts and compression events that may impact the demand. Thirdly, they developed an Airbnb calculator rentalizor, which helps to calculate the potential revenue in comparison with the current top ten most comparable listings on Airbnb. 


Similar to AirDNA, SeeTransparent offers information on the booking pace of properties in the specified market. Besides, they also show guests reviews of the available properties and offer a ranking system on the listings based on their performances. 

SeeTransparent offers a function, Pickup, which enables property operators to check on current demand and availability of the listings for the next 360 days. Like AirDNA, they identify events in the market that may impact the demand for STRs and have a tool to estimate returns for specific properties.   

Alltherooms Analytics

Alltherooms Analytics rates the property listings with a vacation rental score, which is derived from analyzing the bookings, earnings and reviews of listings in a city. Property operators can add up to five properties to compare on those points. In order to get the score for any property listings, the user has to simply insert their Airbnb listing URL on the dashboard.  

Property operators can also use precision filtering of up to five dimensions to more accurately identify their direct competitors. Their dashboard holds up to two years of historical data which can help the property operators in their decision making process with regards to their amenities and ADRs. 

Property investors

Investing in a vacation rental property is a huge decision and selecting the perfect property may not be the easiest decision. Property investors have to use market research tools to get data like average daily rate and occupancy rate in order to calculate the net rental yield, return on investment (ROI) and cash return. Then, they compare those metrics across the different classifications of properties based on two key factors, geographical locations and number of rooms they have. Those steps will help to determine if a property is ideal as a vacation rental. It is critical to make the right decision on the two key factors as they would not be able to alter it in any way after, unlike purchasing amenities or beds. Those vacation rental data platforms offer some data which may be useful for property investors in making their decision. 


Airbtics provide customized investment and market reports on a yearly basis where property investors can compare the performances of STRs over the years. We released the Tailored Region Explorer feature recently, where users can customize their specific region of interest and get data just on that region. This will give property investors an opportunity to zoom into smaller and perhaps the underrated markets and gain a competitive advantage over other investors. 

Airbtics also provides ADRs, occupancy rates, and revenue data, but what stands out is that it gives property investors actionable insights. As a property investor, you would be interested to know the answer for questions like “should I buy a 2 bedroom house or a 3 bedroom house?”

*The feature below is only available on the enterprise plan currently but will become available to everyone in 2021 January.* 

Graph, Number of rooms, Occupancy rates

Besides the STR calculator where both property operators and investors can use to predict their revenue, Airbtics also provides historical data from year 2018 which can help property investors forecast the future market trends and potential properties to invest in. 


AirDNA provides performance data where they identify the most lucrative locations to invest in. The Airbnb calculator rentalizor tool and ratings on rental demand mentioned above for property operators are also useful for property investors in figuring out the potential revenue they can get from the properties they have shortlisted. 

AirDNA also offers market data, which includes top properties, detailed and summarised listing historical data, trend report, weekly pacing report and downloadable custom data which can be delivered on a daily, weekly, monthly or quarterly basis.    


SeeTransparent allows users to create custom groups based on filters such as more precise location, best reviewed listings, bathroom counts, amenities or luxury listings. These custom groups are useful to property investors in finding the best type of properties to invest in. They can also use the tool mentioned above for property operators to estimate returns on specific properties which they have shortlisted.

By tracking the market supply and performances of individual listings in specific regions on their dashboards, property investors can decide if there is still a demand for short-term rental in those regions.     

Alltherooms Analytics

Alltherooms Analytics provides market data such as ADRs, occupancy rates and revenue on different property types and locations. These data are essential for property investors to find out the demand of STRs in various locations. Alltherooms Analytics also came up with a calculator to determine the profitability of a short-term rental property, with easy-to-fill parameters such as street address, number of guests who can stay, number of bedrooms and number of bathrooms. 

Beside the real-time data, the company provides up to four years of historical data and where property investors can do their forecast based on those data. 


AirDNA, SeeTransparent and Alltherooms Analytics offer solutions for enterprises and the prices depend on the types of customized data the clients are looking for, thus, not mentioned below.

User Experience

It is important to have a platform that is easy to navigate, where users can find the data that they need with ease. 


  • Dashboard is well-labelled and organized
  • FAQ button available at the top of the page in case the users have some general queries about the platform
  • Able to switch between 3 different currencies (USD, Euro, Pound)
  • Free trial version available for users to use


  • Automated chatbots on their website can be useful when users are unable to find what they are looking for
  • Dashboard is well-labelled and organized
  • Able to switch between 2 different currencies (USD and Pound)
  • Free trial version available for users to use


  • Automated chatbots on their website can be useful when users are unable to find what they are looking for
  • Dashboard is well-labelled and organized
  • Information on dashboard available in 3 different languages (English, Spanish, French)
  • Useful to have the breakdown of number of listings from different booking channels on the main page of dashboard 
  • Free trial version available for users to use

Alltherooms Analytics

  • Dashboard is well-labelled and organized
  • Some data on dashboard does not load well
  • Able to switch between 9 different currencies (Canadian dollar, Indian rupee, Euro, Mexican peso, Brazilian real, USD, Pound, Australian dollar, South African rand)
  • Free trial version available for users to use
Blog posts

Airbnb Rental Arbitrage: The Ultimate Guide for STR Investors

Rental arbitrage has become a highly lucrative business for short-term rental (STR) investors. It’s definitely popular among those who desire financial freedom through passive income. The appeal of rental arbitrage is that investors do not need to own property in order to start this business. 

However, many potential rental property investors are unsure of the true profitability of Airbnb arbitrage. As with every business, there are always risks. More importantly, first-time rental property hosts need to know the ins and outs of rental arbitrage before jumping to the conclusion that it’s not profitable.

So when it comes to short-term rental arbitrage, is it actually profitable? How can you get started? Where do you even find the rental arbitrage properties, to begin with? Keep reading — we’ll explain everything you need to know.

What is Rental Arbitrage?

Rental arbitrage is the practice of renting out long-term properties and re-renting them out to others on a short-term basis through short-term rental platforms such as Airbnb or HomeAway.

Contrary to popular belief, Airbnb arbitrage is a legal business, as long as you adhere to the specific laws and liability guidelines in your region. It is also known as corporate leasing or subletting if you want to Google around for more information.

Basically, rental arbitrage is a way to operate an STR business without actually owning property and for people to start earning passive income through real estate. Oftentimes, property managers and hosts use a rental arbitrage calculat1or to foresee profitability and avoid losses.

Here are some real-life examples of successful Airbnb hosts who started doing rental arbitrage in their own apartments. Check out the podcast files below!

how much can you make on airbnb

Rental Arbitrage vs Owning Rental Property

STR property investors can either buy their own property or start rental arbitrage for their business. There are several differences as well as pros and cons to both methods. But rental arbitrage seems to be a more popular method among those who want consistent cash flow. Here’s a closer look at the differences between owning property and doing rental arbitrage for an STR business:

Rental arbitrage
  • You don’t need to own the property
  • Provides a steady stream of passive income
  • Enables serial renting (renting multiple properties)
  • No property taxes
  • No need to insure appliances (landlord’s responsibility)
  • Enables the ability to grow in small increments and reinvest profits monthly
  • Allows the opportunity to end the lease early- LESS COMMITMENT
Owning Property
  • Need to put 20% down payment on the property (non-FHA loan)
  • Need to pay for property taxes, HOA fees and utilities
  • Requires a whole year or more to regenerate the original investment money amount and buy a second property
  • Requires high commitment to a mortgage. (If the property is in an unpopular area for Airbnb, you’re stuck with the mortgage. You need to turn it into a long-term rental property or sell the home)
  • Appreciation
If you are more interested in buying a second house, check out these helpful tips on how to manage one!

How to Start a Rental Arbitrage Business Without Owning A Property 

There are many phases to getting started with your Airbnb business, but here is a general list of action items to help:

Step 1. Find a “Goldmine” area for Airbnb

(Skip this step if you have already decided where to start your Airbnb arbitrage business.)

As a first-time STR business owner, the most realistic option is to start looking at rental properties in the area you live. This option is the most convenient for you to handle guest or property issues in realtime. You will be able to fix issues more quickly if you live close to the property.

On the other hand, it’s not ideal to limit your business to the area in which you are currently living. The opportunities are endless when it comes to rental arbitrage. The STR market may be booming in other cities far from where you live. So it’s important to keep this in mind when choosing the location. You always have the option to expand your short-term rental arbitrage business to other locations. After you are done experimenting within your current area.

Key Points to Remember

Primarily, it is important to find a location that produces the most profit. The short-term rental price (bid) and the amount of short-term rental revenue (ask) should be high.

1. Start with a neighborhood that is within a 2-hour drive from your base.

2. Identify a market that has at least 2,000 Airbnb listings 

3. Identify a market that has above 50% year round occupancy rate

4. Check if there is above 70% gap between annual average Airbnb revenue and 1-year long-term rental cost.(E.g. annual average Airbnb revenue = $18,000 & 1 year long-term rental lease cost = $10,000, then the gap is 80%, so it’s good) 

Let’s put this into perspective with a more realistic situation. If you are looking to start a rental arbitrage business and currently live in London, UK, then you might want to choose profitable regions that are within a 2-hour drive from London. 

The first step you should take when looking for an area is to identify the locations where there is sufficient short-term rental demand and a high volume of transactions. This step will ensure that you can keep occupancy rates high for your business. One important metric to consider during this step is the “Average Occupancy Rate”.

The Average Occupancy Rate is a great indicator of overall supply and demand in the market. Use this data to determine how many days your property might be booked out of all the days the property is available.

Tips from Airbnb hosts

We spoke to 50+ Airbnb hosts to get an idea of the different ways that hosts found a location. After screening all the answers, we found out that they get their information from various sources.       

Here are some of the different methods used by Airbnb hosts:

  • Connecting with local property managers in their area.
  • Participating in Airbnb host communities on social media platforms.
  • Asking questions in the real estate forum, BiggerPockets.
  • Manually researching individual listings on Airbnb for various locations.

Whichever method or combination of methods you choose, keep in mind that all hosts are different. One host might run their business differently from another host in the same area. This might be gaining more profit despite the similar location.

We recommend that you use a more methodical approach to set up your business. Using a software to conduct rental arbitrage market research could be a great option to find the best location. Our exclusive Tailored Region Explorer allows you to define your own region to gain more tailored and accurate insights. The advantage of this data is that our software tools account for geographical pricing differences across different regions. So the data is more accurate and reflects the location’s pricing trends.

Instead of blindly starting your business based on someone else’s experience and knowledge, we recommend starting your own journey by doing your own research.

Make more informed decisions using precise data that is tailored to your specific business needs so you don’t have to rely on others.  We built our STR software tools so you can use others’ knowledge as a supplement to your rental arbitrage business, not a primary source.

rental arbitrage

Once you have found a couple of locations that you would like to further investigate, move on to Step #2.

Step 2. Find a unique gap in your market

Unique gap similar to a product’s unique selling point. By looking at your competitors’ performances within your preferred area to start a rental arbitrage business, you can easily find a unique gap in the market. There are opportunities in every location and you simply need to find the gap in the market where there’s a low supply and high demand. Since you are renting instead of buying a property, you have more options to choose from.

Here are a few things you need to think about:

  • Which niche do you want to focus on? (handicap-friendly homes, business traveler-friendly, anime-themed rooms, etc.)
  • What type of property do you want? (studio, 5-bedroom house, 3-bedroom apartment, etc.)
  • How many bedrooms do you want to invest in? What is the number limit of people you want to accommodate for?
  • What kind of amenities are you looking for? (hot tubs, pools, gyms, recreational rooms, etc.)
rental arbitrage

There are so many factors that you must think of before launching your rental arbitrage business. So we did some of the work for you and according to our research, studio units tend to have higher occupancy rates and relatively higher average daily rates (ADR) compared to the monthly, long-term rental fees. It’s also usually worth it to buy a few extra beds so that you can accommodate more people. 

We want your business to run smoothly with the help of innovative software. So make sure to check out our dedicated market research to generate detailed reports and insights as a basis for your business decisions. 

Our market research reports include data such as occupancy rate differences by the number of rooms and revenue earnings for a certain property type each month.

how much can you make on airbnb
Step 3. Check real estate laws and regulations

There are different regulations and rules for the STR industry in regard to Airbnb arbitrage depending on the location. Make sure to apply for any required permits for rental arbitrage in your target location. For instance, Airbnb rental arbitrage in Brooklyn prohibits hosts from renting out their entire homes as an STR.

For a more detailed location-specific list of legal and regulatory issues to consider before hosting on Airbnb, visit Airbnb’s official page.

Step 4. Secure your credibility to prepare your pitch to property owners

Before you dive head-first into crafting your pitch to property owners, here are a few things to consider:

  • Maintain good credit.
  • Save enough funds (extra money to offer for rent).
  • Have some references available.
  • Agree to cover minor maintenance issues up to an agreed value.
  • Provide your own liability insurance (especially if taking direct bookings).

All of these suggestions will help you alleviate some of the property owner’s concerns or issues with your rental arbitrage pitch. Preparation is key to the time you spend getting ready to pitch to property owners, so make sure not to skip this step.

Step 5. Furnish the property

This step is where most of your expenses should go. Great quality design and make use of an Airbnb furniture checklist that can appeal to different types of guests.

Make sure to budget a few thousand dollars to cover all of the basic Airbnb amenities. A sofa, a high-quality mattress and bedframe, great pillows, kitchen utensils, towels, and more. The details are solely up to you, but try to consider adding some extra special touches here and there to truly make your home stand out to guests.

How to pitch to property owners

There are different kinds of property owners, from single-family property owners to multi-family and even whole apartment buildings. The key to pitching to different property owners is to look closely at that specific property owner’s needs.

Try not to focus on your needs as a first-time STR business owner. 

The whole point of pitching to property owners is to focus on what their present or future needs are and how you can help them with your business. 

For example, you can emphasize the fact that they can also expand their real estate investments by using you as a guaranteed tenant if they choose to buy another property. This approach would focus on their future financial desires to expand their real estate portfolio. 

If the property you are looking at is a newly-built apartment building, this means the property needs to pay off a hefty bank loan. 

They have a financial need to increase their occupancy to at least around 70% in order to pay the banks back. You can leverage your understanding of this and ensure a profitable cash flow if they allow you to run Airbnb from that property.

If you’re dealing with a landlord who owns a single-family home, make sure to convince them that you can be the one to handle the management of the property. They have a supervisory need to deal with tenants and handle rental property needs.

Who likes to deal with tenants on a daily basis?

Not many people. 

If you offer to be the sole point of contact and property manager for both the tenants and the landlord, you can make the landlord’s life easier.

When negotiating for your Airbnb business, keep in mind that some homeowners may be sensitive to the fact that their property was attained through years of hard work and saving money. 

Their property is a huge and significant asset that might not be easily negotiated. 

You need to be sensitive when approaching this topic and show respect for their property.

Additionally, you can start targeting homeowners who don’t have as much success renting out their properties. They have more of a financial need and will be more open-minded. 

Here are some key compromises to consider when pitching your rental arbitrage business to homeowners:

  • Suggest that you will fix anything that needs maintenance
  • Offer to do a background check on every tenant
  • Possibly negotiate a profit-share
  • Offer a slight premium on rent

Is rental arbitrage profitable?

The profitability of rental arbitrage is based on a certain number of factors. Location, type of amenities, the current market, historical or future trends, and occupancy rates to name a few. 

As a first-time rental investor or Airbnb host, we understand that it may be difficult to research all of these factors independently by yourself, especially among the long laundry list of items you need to accomplish. 

We made it easier for you by compiling all the information you need about specific Airbnb locations in our market research dashboard, such as the average daily rate (ADR), occupancy rate, guest origins, and more. Understanding and regular monitoring of this data is essential to know how potentially profitable your rental property can be.

rental arbitrage

Compared to the equity you earn from owning property, the cash flow you earn from rental arbitrage has the potential to grow exponentially, or at least in small increments. 

Once you start to generate profit from your rental properties, the best practice is to use those profits to reinvest in new properties. 


Because people who succeed in business understand how to scale it even further. 

Take Elon Musk, for example. We all know him for his success with Tesla and SpaceX, but what most people don’t know is that he has been launching several other companies since 1995. Musk used the profits from his previous companies to fund and create even more successful companies. This method of scaling and funding your business with your previous investments is key to your ROI. 

Reinvesting your money on a monthly basis instead of annually, as you would if you actually owned the properties, will substantially increase your rental arbitrage profitability.

Rental arbitrage can be absolutely profitable as long as you have the correct tools and resources to help you maintain your rental properties. 

We want you to succeed in your investments, so we’ve created a free Airbnb Income Calculator to help you simulate your potential profit from your rental properties. Using these calculations, you can feel more confident in making decisions with the help of accurate data.

Real-Life Success Stories

Calculating potential rental arbitrage profit is only the tip of the iceberg, so let’s take a look at real-life success stories. 

Even throughout the COVID-19 pandemic, some Airbnb hosts have found success with their rental arbitrage properties and we’ve featured their stories on our podcast: Into the Airbnb

An Airbnb host who does Airbnb rental arbitrage in Texas on four listings achieved a 70% occupancy rate even during the pandemic. His story is just one of many among others who have successfully mastered rental arbitrage despite the uncertain economy. 

At Airbtics, we provide the most accurate and relevant data that you may need as a first-time STR investor or even a veteran. We recommend that the best practice to increase rental arbitrage profitability is to understand the data and create a data-based business strategy to scale your investments. 

Best cities for rental arbitrage

Rental arbitrage is a business that continues to evolve, especially as people continue to pivot their travel plans or living situations during the ongoing pandemic. To pinpoint only a handful of places as the “best cities for rental arbitrage” is not a conclusive answer to your search for the best location. 

The factors that determine how great a location is are not always controllable. Some Airbnb hosts may have been successful with their properties in booming tourist areas before the pandemic hit, but now those specific cities may not be doing well anymore.

Location analysis must be one of your top priorities when deciding on a rental location in order to increase profitability during such volatile times, especially while the pandemic continues to impact the rental market.

Let’s take a closer look at the progress of some cities during the pandemic (Jan. 2020- June 2020) that reflect COVID-19’s impact.

1. Myrtle Beach
Myrtle Beach (SC)
After COVID's sudden impact in late March, Myrtle Beach saw a huge decrease in growth until business started picking up again in early May.

After COVID’s sudden impact in late March, Myrtle Beach saw a huge decrease in growth until business started picking up again in early May. It is also considered one of the best places to Airbnb in South Carolina!

2. Big Bear Lake
Big Bear Lake (CA)
Similarly to Myrtle Beach, Big Bear Lake (CA) experienced a sudden decrease in demand. On the contrary, Big Bear Lake drastically increased far more in demand during mid-May than they had earlier this year.

Similarly to Myrtle Beach, Big Bear Lake (CA) experienced a sudden decrease in demand. On the contrary, Big Bear Lake drastically increased far more in demand during mid-May than it had earlier this year. Big Bear Lake is also one of the best neighborhoods in LA for Airbnb, with an average monthly revenue of $2,538.

3. Honolulu
Honolulu (HI)
Honolulu (HI) has been a popular destination for people all over the world, but COVID-19's lasting impact on this location has yet to improve.

Honolulu (HI) has been a popular destination for people all over the world, but COVID-19’s lasting impact on this location has yet to improve.

4. San Jose
San Jose (CA)
San Jose experienced short periods of increased and decreased demand after the pandemic hit and has yet to show complete signs of recovery.

San Jose experienced short periods of increased and decreased demand after the pandemic hit and has yet to show complete signs of recovery.

Simulation of our Airbnb Income Profit Calculator
Rental arbitrage
Simulation of our Airbnb Income Profit Calculator

All the data here without explicit references are sourced and processed by our technologies.

To see more snapshots of the US Airbnb market (June 2020), visit our blog post analysis here

As we can see from the graphs. One could argue that Honolulu could have been considered one of the best cities to do rental arbitrage before the pandemic hit. Now, Honolulu has yet to show signs of recovery from the pandemic and would not be a prime choice of location for rental arbitrage at the moment.

Looking at Big Bear Lake in California, the amount of growth it experienced during these recent months is a great indicator of the current trends of traveling domestically and enjoying “staycations” rather than international travel. 

These unprecedented times have changed the factors of success for STR properties. As we continue to navigate the post-COVID landscape in the rental arbitrage industry. It’s important to regularly monitor the progress and data of each specific location.

Gain Insider Access

Start making data-based decisions for your Airbnb business and increase your profitability

Despite the future’s uncertainty, using data to your advantage will help you determine the best location for your rental arbitrage business. We have included the most useful metrics in our vacation rental insights dashboard. So now you have the flexibility to decide which locations are best for you.

As mentioned before, if your current rental arbitrage properties are not doing well. Then you always have the choice to cut the leases and move your business to another location. This kind of low commitment is the appeal of rental arbitrage. Until you figure out which cities are the best for you.

Why is market research important and how can you use it?

Market research is highly valuable for your rental arbitrage business. As it has the potential to earn a substantial profit because data = knowledge.

You can use data to identify the cause of problems and predict future trends. This will help you to make informed decisions and implement evidence-based strategies for your rental arbitrage business.

Other than having the determination to succeed in rental arbitrage. Making sure you understand data is one of your strongest assets to strategize in your business. 

We’ve seen from the pandemic this year that crises throw out several unexpected problems and obstacles for business owners. But, there is strong potential to bounce back as long as you know how to utilize the data to your advantage.

Here’s a closer look at our case study of the STR market during COVID-19 in the US:

Airbnb occupancy rate YoY growth in Big Bear Lake, Jacksonville, NYC
We can see from the graph YoY growth for 5 different cities in the U.S. This data indicates a trend of recovery growth from COVID's impact in the US, meaning that rental arbitrage hosts in the US should continue their growth efforts.

To see YoY growth for cities in Europe and China and what we found from this data. Visit our detailed blog post here

Market research is always important in knowing how to take the next step in your business. In our analytics dashboard, we include specific metrics to help you make better decisions.

Here’s a snapshot of current occupancy rates and ADR of specific cities that reflect their current performance:

1. Honolulu, United States

The occupancy rate is still experiencing a decrease, so this location may not be ideal for your business in terms of occupancy. On the other hand, their average daily rates have increased by $9, so you need to take this metric into consideration as well.

2. Cancun, Mexico
Cancun Mexico Airbnb

Cancún has always been a popular destination and the data continues to reflect specific trends. Although there is not a huge increase or decrease in occupancy rates and ADR, you can compare these numbers to another year’s numbers to make a judgment on this location.

2. Greater London, United Kingdom
rental arbitrage

This location is also experiencing a slight decrease in occupancy rates as the pandemic continues to impact Greater London, but we can see from the data that the ADR has remained the same. This may prompt some investors to continue their rental arbitrage in this area or to find somewhere more profitable.

We strongly recommend that you create actionable strategies for your business according to the data. 

For example, if the data shows that despite COVID-19’s impact on the economy, specific cities still see a significant number of bookings, it’s time to pivot your business strategy. 

You can see which cities are doing well or doing poorly and decide to move locations accordingly. This is the charm of rental arbitrage because you are not tied down to a mortgage. Instead of a lease, which is a lot less commitment than a 15 or 30-year fixed mortgage loan.

If you would like to gain access to this kind of helpful data, contact us here.

When identifying an underperforming factor that causes your profitability or booking numbers to decrease, you can use data to find any concrete evidence that points to the specific problem. 

Our Mission

At Airbtics, our mission is to help you manifest success with your rental arbitrage or any STR business endeavors. We invite you to interact with our resources and start making data-based decisions. This will boost the profitability of your rental arbitrage properties, and help create the passive income stream you’ve always dreamed of!

how much can you make on airbnb
Airbnb Data
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