At Pass the Keys, we estimate that running a single property on Airbnb full time can create as much as 40 hours of work per month, and in 2018, there have been nearly 5 million properties listed on Airbnb. Doing the maths leads to an assumption of a truly incredible amount of work, and it is not fun work either. Property listing, guest messaging, key handling, cleaning and linen, all need to be constantly managed to be successful on Airbnb and to maximise the income that a property can unlock through short-letting.
This new mountain of work has led to the creation of a new kind of industry, often referred to as Airbnb Management or Host Management. While Pass the Keys is a market leader, it is only one of a large number of short-let management companies to have been created in the last few years, and the number of new entrants is increasing every week. Airbnb Management companies promise to take care of all the work associated with a property on Airbnb for a small percentage of the booking fee, typically between 15% and 25%. To the untrained eye, it can look like a very easy way of making decent money. If Airbnb creates in the region of £80 billion each year in revenue for its hosts, then, in theory, over £15 billion of cash is up for grabs. All you need to do is recruit the hosts, arrange cleaners and linen, and you’re ready to go! In fact, our models suggest that if you can recruit a portfolio of 150 properties in any one city, you can be on your way to earning over £150k in profit per year. This very appealing forecast is one of the many reasons the industry is growing so rapidly.
As things stand currently, the industry in the UK can loosely be split into two types of short-let management companies - the scaled and the non-scaled. Scaled companies such as Pass the Keys, AirSorted and HostMaker manage hundreds of properties simultaneously across multiple cities and even countries. Smaller companies such as AirAgents, BnbBuddy or Dromor have smaller portfolios and tend to offer a slightly more personal service in return for a higher fee.
The scaled companies are part of the highly regarded UK “Prop-Tech” scene, a sector that can loosely be described as ‘using technology to disrupt the property industry’; this technology is what sets apart a scaled company from a non-scaled company. As an example, Pass the Keys has invested huge sums into a team of software developers who have built client management software, an app, and even a host portal, which not only enables us to manage hundreds of stays each week in multiple cities, but also to scale up to thousands and even tens of thousands of stays without increasing our overheads linearly. This custom made technology, partnered with the Airbnb platform (also a tech company), allows thousands of potential hosts across the UK to unlock the power of short-letting, and join the sharing economy. It will also allow Airbnb itself to access the latent potential of thousands or even millions of hosts who want to join the service, but do not have the time or ability to do it on their own, thus relying on an Airbnb Management company. The last point is crucial, and Airbnb has started to partner with some companies in this emerging industry, and ‘flex their muscles’.
Through their “Professional Co-Hosting Programme”, Airbnb is working with a few chosen Host Management companies such as Pass the Keys to move towards the common goal of bringing more hosts onto the platform. The U.S. giant also aims to ensure quality within the industry and is bringing pressure to bear on the most significant players. The “give” is the support of the market leader, the “take” is that all members of the Professional Co-Hosting Program need to adhere to strict guidelines, and deliver excellent service to both hosts and guests. Here at Pass the Keys, we are very excited to be in the unique position of being the only scaled Professional Co-Host in the world. With both the support of Airbnb and the technology in place, we have the potential to scale up to a global level.
In Q3 2018, we are also now in a position where we are looking to expand our operation into all corners of the UK and Europe, and are actively looking for interested parties who are considering entering the short-let management industry. If you are considering starting your own short-let management company, we would be interested in having a discussion on how we might be able to help. Ranging from 3 years of operational experience to custom built technology, and even the support of Airbnb through the Professional Co-Hosting Programme, we have a lot of tips and tricks to share.
If you are interested in starting your own Airbnb Management company, we would love to hear from you. To get in touch visit our Franchise page. We believe that we are all in this together, and should be offering help and support, wherever possible.