Airbnb Business Plan
If you want to start a successful Airbnb business or expand your current Airbnb business, you need a business plan.
The following Airbnb business plan template gives you the key components to include in a winning Airbnb business plan.
Airbnb Business Plan Example
Below is an Airbnb business plan example with each of the key sections to help you write an Airbnb business plan for your own company.
I. Executive Summary
Business Overview
[Company Name], located at [insert location here] is a new, small Airbnb space focused on providing rooms with a clean and modern character that is attractive to leisure visitors to the area. The Company’s rooms will feature modern furniture, high-end technology and modern accessories.
Services
[Company Name] will offer all the standard Airbnb services including daily room cleaning, free local calls, cable TV, a free wireless network and various other amenities.
Customer Focus
[Company Name]will primarily serve leisure travelers who seek comfort, necessary amenities, and simplicity of services. In general, the market for the Airbnb segment tends to be relatively affluent and well-educated.
- The single largest segment that uses Airbnb are guests on vacations/pleasure trips. These tend to be short, weekend breaks to relieve work-related stress. Special events, such as weddings, are important revenue drivers.
- Group travel and business meetings/seminars are important revenue drivers during weekdays and increasingly access points at a central point or in rooms, to attract this latter market.
- 150,000 visitors to the area in according to Office of Tourism
- 55% between ages of 40 and 49, 16% 18 to 29, 18% 50-59, 10% 60+according to the National Household Survey of Travel
- Average household income of $85,900 according to the American Lodging Association
Management Team
[Company Name]is led by [Founder’s Name] who has been in the Airbnb industry for 20 years.
While [Founder] has never developed an Airbnb from the ground up, he has worked in the industry most recently as a general manager, and has held various positions in the management chain over the last 10 years. As such [Founder] has in-depth knowledge of the Airbnb business including the operations side (e.g., running day-to-day operations) and the business management side (e.g., staffing, marketing, etc.).
Success Factors
[Company Name] is uniquely qualified to succeed due to the following reasons:
- There is currently no Airbnb in the community we are entering. In addition, we have surveyed the area and determined that they have frequent visitors who would use our Airbnb location when launched.
- Our location is central to the downtown, airport, tourist attractions and corporate district of the city.
- The management team has a track record of success in the Airbnb industry.
- The city announced plans to invest over $1 billion in tourist attractions over the next two years and existing hotels will not be able to handle the increased capacity of visitors traveling to the city.
Financial Highlights
[Company Name] is seeking a total funding of $3,000,000 to launch the Airbnb business.
Specifically, these funds will be used as follows:
- Design/build: approximately $2,500,000
- Working capital: approximately $500,000 to pay for Marketing, salaries, and lease costs until [Company Name] reaches break-even
Topline projections over the next five years are as follows:
| Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | |
|---|---|---|---|---|---|
| Revenue | $1,980,125 | $2,832,031 | $3,409,160 | $3,783,447 | $4,100,713 |
| Total Expenses | $1,375,530 | $1,561,763 | $1,866,977 | $2,027,436 | $2,107,349 |
| EBITDA | $604,595 | $1,270,268 | $152,183 | $1,756,011 | $1,993,364 |
| Depreciation | $372,760 | $372,760 | $372,760 | $372,760 | $372,760 |
| EBIT | $231,835 | $897,508 | $1,169,423 | $1,383,251 | $1,620,604 |
| Interest | $164,782 | $144,184 | $123,586 | $102,988 | $82,391 |
| Pre-Tax Income | $67,054 | $753,324 | $1,045,837 | $1,280,263 | $1,538,213 |
| Income Tax Expense | $23,469 | $263,663 | $366,043 | $448,092 | $538,375 |
| Net Income | $43,585 | $489,661 | $679,794 | $832,171 | $999,839 |
II. Company Overview
Who is [Company Name]?
[Company Name], located at [insert location here], is a new Airbnb space focused on providing accommodation with a clean and modern character that is attractive to visitors to the area. The [Company]’s rooms will feature modern furniture, high-end technology and modern accessories.
[Company Name] is owned by [Founder’s Name]. While [Founder’s Name] has been in the Airbnb hosting industry for some time, it was in [month, date] that he decided to launch [Company Name]. Specifically, during this time, [Founder] took a business trip to [City, State]. During his trip, [Founder’s Name] could not find a mid-level, Airbnb in the downtown area. After visiting several Airbnb options in the city and learning of the expected growth in travel to [City], [Founder’s Name] clearly recognized an opportunity that an Airbnb would enjoy significant success in this area.
Specifically, the local demographics, business demographics and competitive situations in [City] were so favorable to the success of this Airbnb idea that he knew it would work.
[Company Name]’s History
Upon returning from [City], surveying the local customer base and online market, estimating travel growth, and finding a potential Airbnb location, [Founder’s Name] incorporated [Company Name] as an S-Corporation on [date of incorporation].
The Airbnb development operations are currently being run out of [Founder’s Name] home office. Once the land rights have been purchased, operations will be run from an on-site location to ensure that every detail is being thought out and completed.
Since incorporation, the company has achieved the following milestones:
- Found site location and signed the land deed purchasing rights to the land.
- Developed the company’s name, logo and website
- Hired an architecture firm to create a blueprint of the Airbnb home
- Taking bids from construction crews and electrical engineering firms
- Determined equipment leasing and financing requirements
- Began recruiting key employees with experience in the industry
[Company Name]’s Products/Services
Below is [Company Name]’s initial service offerings and amenities provided.
Single Room
- Two Double Beds or One Queen Bed
- Workspace
- Modern Bathroom
- Daily Cleaning
- Toiletries
- Complimentary Coffee, Tea, and Chocolate
- TV with Cable
- Wireless Network
Whole apartment
- Sitting Room area with Workspace, Couch and TV.
- California King bed
- Luxury Bathroom with Jacuzzi and Shower
- Daily Cleaning
- Toiletries
- Coffee, Tea, and Hot Chocolate
- Fully-equipped kitchenette with oven, microwave, refrigerator, pots, pans, etc.
- Dining area with dining table
- Flat Panel TV
- Wireless Network
- Complimentary Slippers and Bathroom Amenities
The Airbnb location will also have 5 dedicated parking spots which should suffice even in peak parts of the travel season as guests will often not have cars with them.
[Company Name] plans to be open 7 days a week, 24 hours a day, to take care of all guests’ inquiries and issues as they may arise. As demand dictates, we may extend or reduce our services and hours.
III. Industry Analysis
The Vacation Rentals market has experienced explosive growth in recent years, and reached $14.9 billion last year. Over the past five years, the industry contracted slightly. This contraction is largely expected because of an expected rise in the rental vacancy rate, which indicates a slowdown in demand for industry products relative to the supply on the market. Most importantly, industry performance is expected to be hindered by increasing rental vacancy rates, which are indicative of the oversupply of luxury units on the market; the rental vacancy rate is expected to increase an annualized 0.8% over the next five years, which will hamper industry revenue growth and profitability.
Key factors affecting the tourism market include:
- Domestic trips by US residents-This industry is sensitive to changes in the number of domestic day trips and overnight stays. The more consumers travel domestically, the more likely they are to spend on vacation rentals.
- Consumer Confidence Index-The Consumer Confidence Index measures consumers’ feelings regarding their current and future financial prospects. Changes in consumer sentiment have a significant influence on travel intentions, demand and expenditure.
- Inbound trips by non-US residents-This industry is sensitive to changes in the number of nights international visitors spend in the United States. The longer a tourist stays in the United States, the more money they are likely to spend.
- National unemployment rate-The national unemployment rate is a benchmark for determining the overall health of the US economy and has had mixed effects on industry demand. As the unemployment rate falls, individuals tend to have more money to spend on living expenses and afford higher rent prices. At the same time, with more money to spend, individuals may choose to purchase a home rather than rent, which can adversely affect industry demand.
IV. Customer Analysis
Profile of Target Market
[Company Name]will serve the leisure travel market of [Insert location] and its immediate surrounding area.
The market we serve is value-conscious and has a desire for high comfort and basic amenities geared towards the family and comfort travel.
U.S. leisure travelers are more likely to book a trip this year, relying on a new resourcefulness fostered by the belt-tightening times of the Great Recession, according to new findings from a partnership/Harrison Group survey.
The number of domestic trips by US residents has turned the corner since the recession.
- Direct spending on leisure travel by domestic and international travelers totaled $650.8 billion in 2015.
- Spending on leisure travel generated $99.6 billion in tax revenue.
- Nearly 4 out of 5 domestic trips taken are for leisure purposes (79%).
- U.S. residents logged 1.7 billion person‑trips for leisure purposes last year
- Top leisure travel activities for U.S. domestic travelers: (1) visiting relatives; (2) shopping; (3) visiting friends; (4) fine dining; and (5) beaches.
The demographic profile of the target market can be seen below:
| United States | |
|---|---|
| Total Population | 312,796,426 |
| Population Male | 49.00% |
| Population Female | 51.00% |
| Median Age | 37.5 |
| Target Population by Age | |
| Age 18 to 24 | 9.99% |
| Age 25 to 34 | 13.08% |
| Age 35 to 44 | 12.94% |
| Age 45 to 54 | 14.64% |
| Age 55 to 64 | 12.43% |
| Median Household Income | $57,639 |
| Households w/disposable income | |
| Income $50,000 to $74,999 | 18.03% |
| Income $75,000 to $99,999 | 12.97% |
| Income $100,000 to $124,999 | 8.65% |
| Income $125,000 to $149,999 | 5.40% |
| Income $150,000 to $199,999 | 5.12% |
| Income $200,000 and Over | 5.34% |
Customer Segmentation
We will primarily target the following three market segments:
- The U.S. Leisure Travel Market: Travelers to [Insert Area or City] tourist attractions such as the Museum of Fine Art and the Annual Film Festival, as well as visitors to social events such as weddings.
- The U.S. Business Travel Market: Travelers to [Insert Area, City] corporations and events.
- International Tourists: Last year, there were over 903 million international tourist arrivals worldwide, with a growth of 6.6%. International tourist receipts were $856 billion, according to tourismroi.com.
V. Competitive Analysis
Direct & Indirect Competitors
The following businesses are located within a 2-mile radius of [Company Name], thus providing either direct or indirect competition for customers:
Vacation Rental Management
This company boasts nearly 1 million paid listings for vacation rental properties across 190 countries worldwide and helps property owners rent out their property. Its website is free to travelers, who are typically affluent, and is searchable by destination. Its listings include information on weekly rates, availability, and amenities, as well as photographs, descriptions, and contact information.
Vacation Bookings Inc.
The company operates online travel tools and offers online reservation services for some 2.2 million properties — including hotels, resorts, apartments, and homes — across 230-plus countries. It works to connect customers looking to make travel reservations with providers of travel services worldwide. In the US, it offers reservations via an online booking portal for hotels, rental cars, airline tickets, and vacations packages.
Short Term Rentals
Unlike hotel accommodations, Short Term Rentals helps travelers book short-term vacation properties from local hosts (typically the property owners). Rentals can range from modest apartments in urban areas to castles in the countryside; other accommodations include houses and villas. The company operates in more than 100,000 cities and towns in 190 countries around the world. The service, which boasts more than six million listings, provides a convenient way for homeowners to monetize their residential properties. The company offers a simple user interface that can be used online or from a mobile phone or tablet.
Competitive Pricing
The pricing of individuals properties varies widely depending on the type of property and location, but each competitor has fees as follows:
| Short Term Rentals | Vacation Bookings | Vacation Rental Management | |
|---|---|---|---|
| Booking fee | 2% | 1% | 2.50% |
| Listing Fee | 5% | 10% | 15% |
| Commission | 5% | 7% | 3% |
Competitive Advantage
[Company Name] enjoys several advantages over its competitors. These advantages include:
- Location: [Company Name]’s location in the downtown area, gives the best access to the airport, tourist attractions, corporate center, downtown, shopping and restaurants. The Company also offers adequate parking making it easy for customers to relax upon arrival.
- Business Amenities: WiFi throughout the Airbnb place will make working remotely simple for business visitors.
- Management: Our management team has years of business and marketing experience that allows us to market and serve customers in the same manner as our most sophisticated competitors.
- Relationships: Having visited the community for a number of years, [Founder’s Name] knows all of the local leaders, newspapers and other influences. As such, it will be relatively easy for us to build the brand and awareness of the Airbnb.
VI. Marketing Plan
The [Company Name] Brand
The [Company Name] brand will focus on the Company’s unique value proposition:
- Offering rooms suited for families and business travelers and services
- Offering a central location in the downtown area
- Providing excellent customer service
Promotions Strategy
[Company Name]expects its target market to leisure travelers mainly from the U.S and surrounding locations in the Midwest. The Company’s promotions strategy to reach these individuals includes:
Phone Prospecting
[Company Name] will assign salespeople to contact area corporations to arrange for bulk corporate rates for their visitors depending on the volume of visitors they will have.
Public Relations
We will contact all local and regional area newspapers and television stations to tell them about the Airbnb opening and unique value proposition of [Company Name].
Advertising
[Company Name] will initially advertise on travel websites, which are frequently being used these days to book travel due to their ease of use and reviews.
Pricing Strategy
[Company Name]’s pricing will fluctuate based on the season and occupancy percentages using a computerized yield management system, but pricing will always place the Airbnb in the mid-range, below luxury offerings and above Airbnb and motels in the area. Customers will feel they receive great value when patronizing the Airbnb.
VII. Operations Plan
Functional Roles
In order to execute on [Company Name]’s business model, the Company needs to perform many functions including the following:
Administrative Functions
- General & Administrative functions including legal, marketing, bookkeeping, etc.
- Sourcing and storing supplies for the Airbnb
- Hiring and training staff
- Corporate sales to individuals and groups
Airbnb Services
- Housekeeping
- Check-in focused on customer service
- Janitor/maintenance personnel to keep the units clean and in working order
Milestones
[Company Name] expects to achieve the following milestones in the following [] months:
| Date | Milestone |
|---|---|
| [Date 1] | Finalize real estate lease/sale |
| [Date 2] | Complete professional photography of the property |
| [Date 3] | Launch Property website/online |
| [Date 4] | Launch marketing campaign |
| [Date 5] | Serve 50th customer |
| [Date 6] | Serve 100th customer |
| [Date 7] | Break even |
VIII. Management Team
Management Team Members
[Company Name]is led by [Founder’s Name] who has been in the Airbnb industry for 20 years.
While [Founder] has never developed an Airbnb from the ground up, he has worked in the industry most recently as a general manager, and has held various different positions in the management chain over the last 20 years. As such [Founder] has in-depth knowledge of the Airbnb business including the operations side (e.g., running day-to-day operations) and the business management side (e.g., staffing, marketing, etc.).
[Founder] has also worked as a real estate consultant on a part-time basis over the past 10 years. Specifically, he has worked in contracting positions to help real estate developers with their Airbnb launch plans as well as their operations plans once the business has been launched.
[Founder] graduated from the University of ABC where he majored in Hotel and Restaurant Management.
IX. Financial Plan
Revenue and Cost Drivers
[Company Name]’s revenue will come from Airbnb room occupancy.
The major costs for the company will be salaries of the staff and cost to maintain the standard of the Airbnb. In the initial years, the company’s marketing spend will be high, as it establishes itself in the market.
Capital Requirements and Use of Funds
[Company Name] is seeking a total funding of $3,000,000 to launch the Airbnb. The capital will be used for funding capital expenditures, manpower costs, marketing expenses and working capital.
Specifically, these funds will be used as follows:
- Airbnb design/build: approximately $2,500,000
- Working capital: approximately $500,000 to pay for Marketing, salaries, and lease costs until [Company Name] reaches break-even
Key Assumptions
Below please find the key assumptions that went into the financial forecast and a summary of the financial projections over the next five years.
| Number of customers per day | Per location |
|---|---|
| Year 1 | 10 |
| Year 2 | 15 |
| Year 3 | 20 |
| Year 4 | 25 |
| Year 5 | 30 |
| Average rental price per night | $245 |
| Annual Lease (per location) | 50000 |
5 Year Annual Income Statement
| Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | ||
|---|---|---|---|---|---|---|
| Revenues | ||||||
| Product/Service A | $151,200 | $333,396 | $367,569 | $405,245 | $446,783 | |
| Product/Service B | $100,800 | $222,264 | $245,046 | $270,163 | $297,855 | |
| Total Revenues | $252,000 | $555,660 | $612,615 | $675,408 | $744,638 | |
| Expenses & Costs | ||||||
| Cost of goods sold | $57,960 | $122,245 | $122,523 | $128,328 | $134,035 | |
| Lease | $60,000 | $61,500 | $63,038 | $64,613 | $66,229 | |
| Marketing | $20,000 | $25,000 | $25,000 | $25,000 | $25,000 | |
| Salaries | $133,890 | $204,030 | $224,943 | $236,190 | $248,000 | |
| Other Expenses | $3,500 | $4,000 | $4,500 | $5,000 | $5,500 | |
| Total Expenses & Costs | $271,850 | $412,775 | $435,504 | $454,131 | $473,263 | |
| EBITDA | ($19,850) | $142,885 | $177,112 | $221,277 | $271,374 | |
| Depreciation | $36,960 | $36,960 | $36,960 | $36,960 | $36,960 | |
| EBIT | ($56,810) | $105,925 | $140,152 | $184,317 | $234,414 | |
| Interest | $23,621 | $20,668 | $17,716 | $14,763 | $11,810 | |
| PRE-TAX INCOME | ($80,431) | $85,257 | $122,436 | $169,554 | $222,604 | |
| Net Operating Loss | ($80,431) | ($80,431) | $0 | $0 | $0 | |
| Income Tax Expense | $0 | $1,689 | $42,853 | $59,344 | $77,911 | |
| NET INCOME | ($80,431) | $83,568 | $79,583 | $110,210 | $144,693 | |
| Net Profit Margin (%) | - | 15.00% | 13.00% | 16.30% | 19.40% |
5 Year Annual Balance Sheet
| Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | ||
|---|---|---|---|---|---|---|
| ASSETS | ||||||
| Cash | $16,710 | $90,188 | $158,957 | $258,570 | $392,389 | |
| Accounts receivable | $0 | $0 | $0 | $0 | $0 | |
| Inventory | $21,000 | $23,153 | $25,526 | $28,142 | $31,027 | |
| Total Current Assets | $37,710 | $113,340 | $184,482 | $286,712 | $423,416 | |
| Fixed assets | $246,450 | $246,450 | $246,450 | $246,450 | $246,450 | |
| Depreciation | $36,960 | $73,920 | $110,880 | $147,840 | $184,800 | |
| Net fixed assets | $209,490 | $172,530 | $135,570 | $98,610 | $61,650 | |
| TOTAL ASSETS | $247,200 | $285,870 | $320,052 | $385,322 | $485,066 | |
| LIABILITIES & EQUITY | ||||||
| Debt | $317,971 | $272,546 | $227,122 | $181,698 | $136,273 | |
| Accounts payable | $9,660 | $10,187 | $10,210 | $10,694 | $11,170 | |
| Total Liabilities | $327,631 | $282,733 | $237,332 | $192,391 | $147,443 | |
| Share Capital | $0 | $0 | $0 | $0 | $0 | |
| Retained earnings | ($80,431) | $3,137 | $82,720 | $192,930 | $337,623 | |
| Total Equity | ($80,431) | $3,137 | $82,720 | $192,930 | $337,623 | |
| TOTAL LIABILITIES & EQUITY | $247,200 | $285,870 | $320,052 | $385,322 | $485,066 |
5 Year Annual Cash Flow Statement
| Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | |
|---|---|---|---|---|---|
| CASH FLOW FROM OPERATIONS | |||||
| Net Income (Loss) | ($80,431) | $83,568 | $79,583 | $110,210 | $144,693 |
| Change in working capital | ($11,340) | ($1,625) | ($2,350) | ($2,133) | ($2,409) |
| Depreciation | $36,960 | $36,960 | $36,960 | $36,960 | $36,960 |
| Net Cash Flow from Operations | ($54,811) | $118,902 | $114,193 | $145,037 | $179,244 |
| CASH FLOW FROM INVESTMENTS | |||||
| Investment | ($246,450) | $0 | $0 | $0 | $0 |
| Net Cash Flow from Investments | ($246,450) | $0 | $0 | $0 | $0 |
| CASH FLOW FROM FINANCING | |||||
| Cash from equity | $0 | $0 | $0 | $0 | $0 |
| Cash from debt | $317,971 | ($45,424) | ($45,424) | ($45,424) | ($45,424) |
| Net Cash Flow from Financing | $317,971 | ($45,424) | ($45,424) | ($45,424) | ($45,424) |
| SUMMARY | |||||
| Net Cash Flow | $16,710 | $73,478 | $68,769 | $99,613 | $133,819 |
| Cash at Beginning of Period | $0 | $16,710 | $90,188 | $158,957 | $258,570 |
| Cash at End of Period | $16,710 | $90,188 | $158,957 | $258,570 | $392,389 |
