Starting an Airbnb business in the Philippines is a fantastic idea for real estate investors. But the question is – how to start an Airbnb business in the Philippines and be successful? Are there any Airbnb business plans to follow, or how about using an Airbnb property management service? These questions and more will be answered in today’s guide on how you can start an Airbnb business in the Philippines.
Table of Contents
How To Start An Airbnb Business Philippines
1. Research Your Market And Customer
Naturally, one of the first steps in growing and starting a successful Airbnb business in the Philippines is market research. Research is critical for any successful real estate investor, but it is even more important to research the market and customer type if you turn your investment into a business. Here are a few areas to consider;
- Competition Analysis (Supply, Current Prices Etc)
- Does My Property Have The Right Facilities For My Targeted Audience?
- General Real Estate Market In The Philippines
- If This Business Was Successful, What Would Be The Reason?
- Is My Property Suitable Enough For My Audience?
- Is This Business Didn’t Work? What Would Be The Reason?
- Local Real Estate Market
- What Are The Current Market Trends?
- What Are The Current Risks And Threats To The Market?
- What Is The Demand In My Targeted Market?
- What Is The Volume Of Customers In The Market?
- What Laws And Regulations Could Impact An Airbnb Business In The Philippines?
- Which Locations And Neighborhoods Are Expanding And Why?
- Who Are My Customers And What Are They Seeking?
Here are several questions that tap into researching the real estate market, researching the business, and researching the customer type. These questions have relevance when starting an Airbnb business in the Philippines but feel free to add your own or change these to suit your situation.
If you are thinking about hosting events in the Philippines on Airbnb for some additional cash, you may also wish to follow the research. However, one of the most important areas for events is the current or expected demand. The great news is for many events; there is a low supply (depending on location); however, hosts will need to ensure that this event is desirable for potential customers.
2. Build Your Airbnb Business Plan Philippines
When starting an Airbnb business in the Philippines, you will find the plan the most important step. There are several ways to go about this. You can use the free template we have available at Filipino Wealth, download a template from another website, or create your own.
Unfortunately, Airbnb does not currently offer a business plan for its hosts; however, they have some great information on what you can do to build a successful business on Airbnb. Nevertheless, below we have documented the most important areas when building an Airbnb business plan in the Philippines.
- Costs, Expenses, Profits, And Prices (Everything Financial)
- Customer Understanding (What Do They Want And Need)
- Full Competition Analysis
- Operational Overview (Time Allocation, Marketing Efforts, Etc.)
- USP/ESP & Why Customers Will Choose You
When building your real estate business plan in the Philippines, there may be some areas you wish to include or not include. Of course, we focus on successful people and successful businesses when it comes to business and investment. Still, sometimes it’s important to learn from other people’s mistakes and instead think about why people have failed and how you can avoid making the same mistakes.
For example, an Airbnb business owner did not make as much money over the years as expected. During the investigation, we found this was due to the lack of research and understanding of what the customers wanted and needed. Data and research are key to a successful Airbnb business in the Philippines.
3. Decide On Your Fees, Features, And Rules
We have mentioned the fees and income several times today as they are critical during the initial stages of starting an Airbnb business. Nevertheless, this stage focuses on the big money questions and how this impacts the success or failure of your Airbnb business.
The first step is to calculate all your expenses. It’s often wise to do this based on one month, and then this can be divided down into per day. In other words, it’s wise to have your total costs (expenses) for the month and daily. It’s important to include all expenses, including insurance, cleaning fees, and so on.
Once you have completed this stage, you will now have your break-even level. For example, if you found that your total expenses came to P850 per day, you know you need to make P850 daily to break even on average. Of course, not every day will be booked, but as long as, on average, you are making at least P850, you are not losing money.
Additionally, there will be some fees that are fixed, and others will fluctuate, so it isn’t easy to calculate exactly; however, this will give you a baseline. From this baseline (AKA the break-even point), you can then decide how much you will charge your guests. The good news is it’s possible to increase your Airbnb profit in the Philippines (more on this later).
Lastly, this step includes the rules and regulations of your Airbnb property. Some common rules include no smoking and no parties. Airbnb allows hosts to list their rules on their profiles. Once completed, you will already have completed a large part of the work involved in starting an Airbnb business in the Philippines. From the calculations – you can forecast how much you expect to make (naturally, your profits will depend on the demand and prices).
4. Apply With Airbnb And Complete Your Profile And Listing
The most important element of being a successful host is creating a visually stunning listing. Your profile and property listing need to be so compelling that your customers can’t afford to say no. For example, Images can do a lot. There have been many psychological studies on the importance of images and how it influences sales. So let’s look at how you can stand out from the crowd.
The first stage is to include simple, flattering pictures of your property. This includes ensuring that your curtains are open and light penetrates the whole room before taking any pictures. Customers like to see several photos, including the outside of the property and nearby facilities, but the main focus should always be on the property or unit.
Another important step toward success is fully completing your hosting profile and property listing. This can impact the algorithm, and studies have shown that more good quality in-depth information is linked to positive indicators such as trustability which links to purchases, interests, and orders.
5. Start Self-Promoting And Marketing
When trying to make money on Airbnb in the Philippines, you will have several decisions. And at this stage, the decision is whether you will promote your business or leave it up to the algorithm of Airbnb. So naturally, it’s often recommended to self-promote, leading to the greatest opportunity for success.
The methods of marketing an Airbnb business in the Philippines may differ from customer to customer. For example, if you want to target a younger crowd, such as backpackers, you may wish to use TikTok. However, if you have a luxury unit, it may be wise to invest in Facebook ads or post in the local Facebook groups.
Previously we explored how to market real estate in the Philippines, where we covered all the options available. Additionally, you may be interested in looking at our marketing with no money guide if you are on a budget.
6. Register Your Business
Registration of a business is an essential step. There are many time-consuming tasks that include registering the business itself and the tax. However, there are advantages to registering a business in the Philippines, and this can even be used as a form of leverage.
Leverage is a concept that can save business owners and investors many years. If done correctly, leverage can take you from point A to point Z quicker than it would get from point A to point B. Several business loans are available that can be fantastic for growing Airbnb businesses in the Philippines. But, leverage comes with risk.
Suppose you are looking at the process of how to register a business in the Philippines physically. In that case, Security Bank has a fantastic article covering this topic in more detail which we have linked above for reference.
7. Reinvest Back Into Your Business
When your business has become profitable, one of the most important stages is reinvestment. A common question asked is – how much should I reinvest back into my Filipino business? This depends on your personal and other business expenses; however, most businesses aim for at least 10% to 20%. If business expenses are low, this may be as high as 50%. But there is no limit.
The next important question is, what should you reinvest into if you are managing an Airbnb business in the Philippines? Naturally, the property is the obvious choice if you have the funds available. However, other reinvestments can include improvements to your property and increased profitability.
How can you increase your profits if you are an Airbnb host? Some things are expected of a property, but some things are a premium and can be used to increase your profit margins. For example, a washing machine can be included for free, but a coin-operated dryer is not essential and could have a fee. This can also include many other products and services to increase profits.
Of course, this has to be balanced as guests pay for the room and its facilities. However, if something is not essential or you wish to include it as an extra, you will find that this is a great option for extra profits. For example, when I was staying in Manila, the host had a small vending machine in the back room! This was very hard to say no to when I had a sugar craving! So now we know how to start an Airbnb business in the Philippines for beginners.