Even though Airbnb is most popular in the USA, it is impossible to ignore the European market as well. In 2020, thirty per cent of all Airbnb’s revenue was generated by the EMEA region. More and more entrepreneurs are starting to get interested in investing in Airbnb vacation rental business in Europe, so we have decided to write this article, covering the essential related aspects and highlighting the best cities available for launching a business right now.
Discover top 20 US cities for Airbnb investment.
Info Starter Pack
Becoming an Airbnb host requires a lot of preparation, and learning the key information is essential for a successful start. In this section, we will highlight the specific info you should be looking for to become truly prepared for launching a business.
If you’re not strongly familiar with Airbnb, you should start with the basics. Visit their official website and try to learn as much as possible about the key business processes. Discover the way you create a listing, the options available for interacting with the visitors, the features for managing your profile and listings, as well as all the other points you will have to know as an Airbnb host. Seeing the full picture will make it easier for you to make an informed decision on whether or not you intend to enter the market.
In case the information from the previous section does make you reconsider the option of becoming a host, it is time for some key metrics to kick in. Of course, the more detailed information you obtain and analyze, the better, but in this section, we will cover the two most essential metrics you should never avoid checking out.
The abbreviation RevPar stands for Revenue per Available Room, which makes the name of this metric speak for itself. It is calculated by multiplying the cost for the room by its occupancy rate, allowing the hosts to accurately adjust their prices. Even though it was initially created for estimating the efficiency of hotels, taking the average RevPar value for a specific city is a good way to start. Further in the article, we will share a list of the European cities with the highest RevPar values.
At this point, checking out the metric will allow you to have a very approximate value that you will receive as a landlord in your city. After launching your business and operating for a few weeks or months, you can calculate the metric for your property and adjust your prices until they are perfectly balanced with your occupancy rates.
Airbnb Occupancy Rate
Learning the average occupancy rate is not only necessary because it is used in calculating the RevPar value. Analyzing the occupancy rate in your region will allow you to be more informed about the conditions of the market you’re about to enter. In case you see low occupancy rates in your city, you should do your best to find the reasons behind it. Doing so will either allow you to find an untapped segment of the market or opt out before you invest in a potentially unprofitable business.
Last but not least, you will need to get fluent in local legislation. For each European country, the rules of hosting guests via Airbnb are different, so it is necessary to take them into account while considering an investment. Thankfully, Airbnb itself provides potential entrepreneurs with enough information about the laws of the countries it operates in. In case you feel that the information from the official website of Airbnb is not enough, you can easily search for all the related legislation on your own.
European Cities to Consider for an Investment
In this part of our article, we will share the best cities in Europe to launch a vacation rental business. We will both share a long list of the cities with the highest potential revenues and present you with detailed reviews of the most attractive cities in terms of launching an Airbnb business.
Best RevPar Cities
As we have already mentioned, RevPar is an important metric you should take into account. Even though it does not accurately represent the revenue you will receive as a landlord, it gives a great picture of the state of the hospitality markets in different cities. As the metric includes both the average occupancy rate and the average prices, cities with the highest RevPar values should be considered promising for Airbnb businesses. Below, you will find a table that contains the European cities with the highest RevPar values, according to Transparent.
|Sant Josep de sa Talaia||Spain||€107|
|St Ives||Great Britain||€86|
Reviews of Best Cities
To complement the list from the previous section, we will also present you with detailed reviews of the best European cities by the RevPar value. For potential hosts who are eager to launch their Airbnb businesses in one of these cities, knowing some details will be useful. At the same time, learning their backgrounds will enable you to understand that the conditions may vary a lot for each city, proving once again that you should perform an analysis rather than rush to launch with no preparation.
Zermatt is an extremely popular ski resort in Switzerland, and it holds first place in the European RevPar rating. It is the highest area for skiing in the Alps, attracting millions of tourists annually. Zermatt is also a city that perfectly shows that you should not rely solely on the RevPar value when considering launching an Airbnb business.
First of all, there are tons of external factors that make the metric less representative in terms of international analysis. Switzerland is one of the world’s leading countries in terms of prosperity, quality of life and competitiveness. It is logical that the average revenue in its most popular ski resort will be higher than in many other European cities, but the costs and the competition there are higher as well. Thus, the highest RevPar value of a specific city does not necessarily mean a higher return on investments.
This commune on the southwest of France is another tourist magnet, but of a smaller scale compared to Zermatt. Lège-Cap-Ferret is mostly famous for its nature as it is a long piece of land that is washed by the Atlantic Ocean on one side and by the Acharon Bay lagoon on the other. Its population counts less than 10,000 people, which does not prevent thousands of tourists from visiting the natural reserve annually. The high RevPar value of Lège-Cap-Ferret is related to the unique location and strongly limited hosting space of the commune.
Bagnes is another Swiss location on our list, and it is also popular for its skiing resorts and hiking tours. It is also located in close proximity to Mont Fort, Grand Combin and other natural tourist attractions. The RevPar value of €108 is triggered by the same factors we have elaborated on in the review of Zermatt above. This also shows that the RevPar metric is useful to compare the cities within a single country, as the main drivers, as well as the economic conditions are usually the same for them.
Sant Josep de sa Talaia, Spain
There is no surprise this small village has made it to the list as it is located right in the middle of Ibiza island. The shoreline hotels are probably more attractive to tourists, but Sant Josep de sa Talaia is a perfect location for tourists who wish to visit all the island’s attractions. Its high RevPar value is related to the reputation and the luxuriousness of Ibiza.
Being now a part of Courchevel, Saint-Bon-Tarentaise attracts thousands of tourists annually. In contrast to the warm beaches of Lège-Cap-Ferret, Courchevel offers an amazing ski resort as it is located near the French Alps. The region is considered to be one of the best for winter sports in France, so there is no wonder its average RevPar index is extremely high.
As you could have noticed from our reviews, starting a vacation rental business requires a lot of preparation, which should also be individual for each region. To have a successful start, you will need to learn the business processes and the local legislation, as well as to analyze the key drivers of the RevPar metric. Thankfully, there are comprehensive tools such as AirDNA that will present all the relevant information in a comfortable form, simplifying the research greatly.
Read also more about the best Airbnb cities in Canada.