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How to run an Airbnb business in Sydney

An exploration of Sydney Airbnb Dataset of 2018

Airbnb is becoming the first choice of some young people for its sharing and communication characteristics. As a world-famous tourist city, Sydney has a large number of Airbnb hosts. Do you want to be one of them? If the answer is yes, here are several tips from the data.

I used the data from Sydney Airbnb Dataset of 2018, which contains 36,662 Airbnb rooms located in the Greater Sydney area. This dataset lists multiple aspects, including room location, price, room type, minimum nights, and other tens of features.

Many people ’s biggest worry is that I only have one house or apartment, and can I run an Airbnb business?

Here from the figure, we can see there are more than 8,000 hosts manage only one private room. It seems that those hosts use one of their residence rooms to do the business, that’s more than 20% of all 36,662 Airbnb rooms. If we consider that some hosts list two or more places, the percentage of hosts with only one house can be even higher.

Figure 1: The number of Airbnb rooms in Sydney

So if you have two or more independent rooms, you can run the business. That’s what more than 8,000 hosts in Sydney is doing. If you can not even meet this condition, you still have the choice of trying a shared room.

Location is always an essential aspect of a real estate related business. If you have the opportunity to find a better place for your Airbnb business, it’s a good idea to take a peek at how professional operators choose.

I divided the data into three groups based on how many homes the host owns, then plot these groups separately on a Syndey map. I classified hosts who operate more than 4 Airbnb rooms as professional operators and hosts who operate an only place as an amateur.

Figure 2: Airbnb Location distributions

From the last figure, we can see professional operators’ choices highly clustered in two areas: the CBD surroundings and Bondi beach surroundings. These areas are the most popular area of Sydney for tourists. Maybe, another reason is there are lots of available apartments and townhouses to rent in these areas.

If you are trying to break into this field, and want to follow the professional operators’ steps, begin from Bondi, CBD or other seaside areas is the right choice. I can give more supportive information later.

I compared the available rate and average room price of the top 10 room amount areas with the rest. The high ten neighborhoods with the most significant room amount are Sydney, Waverley, Randwick, Manly, Warringah, Woollahra, North Sydney, Marrickville, Pittwater, and Leichhardt. They are the most famous waterside areas and account for 76.5% of Airbnb rooms in Sydney.

Figure 3: Time series analysis of average price and available rate

I find another support for choosing the waterside areas here. In the top 10 regions, despite the plentiful supply of rooms, the average price of the available room is about $320, the highest average price can reach $550, they are both nearly twice the rest 28 areas. The available rate is almost less than 30% for the top 10 and is lower than in other areas’ 50%. Waterside area means higher demand, higher price, lower vacancy rate. These benefits can offset the lack of experience for new beginners.

As for pricing strategy, the above figure has lots of information, and I had four takeaways:

Because of high demand, around Christman and new year’s day, there is a price spike, the available room’s price is about 1.5 to 1.8 times as usual. This rate is even higher in the top 10 areas. The available rate is also the lowest of the year. But after the holiday, the price and the available rate return to normal quickly.

The available rate shows an apparent step-like distribution. From January to early March, Airbnb available is the highest of the year, and the price is the lowest. Then in the first week of Mar, Jun, and Sep, the available rate decreases dramatically, especially at the beginning of Mar and Jun, the average rate has a more than 10% decrease. The price follows the opposite trend.

After releasing the highest demand around new year’s day, Sydney comes into the hottest period of the year as a city in the southern hemisphere. I think that’s why Sydney has the highest available rate at that time.

In this article, we took a look at how to begin an Airbnb business in Sydney, according to the Airbnb Sydney dataset 2018.

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