How to Make it Big In Los Angeles: Leveraging Insights from Airbnb

Airbnb is a fast-growing industry, reaching almost $10 billion in total revenue in 2023, which is an 18% increase in total revenue from the previous year. As an alternative to traditional hotel lodging, Airbnb continues to impact urban rental markets, especially in high-tourism areas.? With more than 5 million hosts utilizing Airbnb, my team and I used extensive data about listings in Los Angeles to guide new Airbnb users to make data-driven decisions to set themselves up for success. By leveraging our data’s ability to shed light on factors affecting price, popularity of properties, and traits that make you a great host, we hope to inform others on how to make it big in Los Angeles with Airbnb.

Our data, sourced from Inside Airbnb, contained over 44,000 unique listings for properties in Los Angeles County. Our dataset included information about specific property characteristics (i.e. bed and bathrooms, how many individuals a listing can accommodate), the location of every listing and the popularity of listings (represented by number of reviews and average review score). With this information, we hoped to identify popular property types and highly sought after amenities to identify the listings leading to success for hosts. Below you can find a map of Airbnb listings.

Data also include host behaviors related to individual listings. These behaviors included host status on Airbnb, typical response time and rate to messages, and how long a host has been with Airbnb. For host status, Airbnb features a Superhost designation, which is awarded to individuals who demonstrate exceptional hospitality, maintain high standards, and consistently provide excellent guest experiences. My team utilized insights from current Superhosts to showcase how going above and beyond expectations can lead to success.

Through utilization of our data, we have identified common characteristics of successful Airbnb hosts. By highlighting exemplary hosts, we hope future Airbnb hosts are able to apply these insights to themselves. Success was determined by the number of reviews a property had, as this was the only data original to the dataset we had. Number of reviews and average review score were used to gauge the popularity of properties. This article will take you through our analysis, conclusions, and offer tools for identifying the perfect combination of property and individual elements to rise through the ranks of Airbnb hosts in Los Angeles.

Property Characteristics

First, Airbnb allows for a variety of accommodations, ranging from entire homes to unique stays like yurts, castles, or shipping containers. From 2015 - 2024, entire place listings totaled 33,051, private rooms totaled 11,234 locations, shared rooms equaled 747 listings, and unique stays came in at 501 listings.

While the amount of people a place can accommodate doesn’t affect average reviews, it does affect the average price per night. To no surprise the more people a place can accommodate the higher the price per night is on average. While it may seem easy to just get a larger place and charge more, there are some other factors that impact financials.

We used average price per night and estimated yearly revenue as a measurement of financial potential, while using average rating (one through five) and amount of ratings as a measurement of success through engagement. To get the estimated yearly revenue we took the total number of days that a property was available to be booked, multiplied it by 0.8, and then multiplied it by the price per night. The number we end up with is the total amount of money a property will make in the next 365 days if it is booked 80% of the time that it is available for booking. We found that the type of property had an effect on all of these averages. Below we can see the averages for every property.

As we can see Unique Stays have significantly higher average price per night, yearly revenue, and number of reviews while still maintaining a respectable average rating of 4.8 stars. We can attest these higher averages to the fact that unique stays are destinations that people are traveling to for the experience, leaving more of an impression on the guests and explaining the increase in rating and price.

Entire places are slightly above average overall, which shouldn’t be a surprise because they make up a significant portion of the data, so we would expect it to be close to the overall average. This is one of the most popular property types, and as such is most accessible for new Airbnb hosts, and are well received by guests.

Trailing slightly below average are private rooms, which have an average price per night over 20 dollars less than the average of all properties, but still maintain a relatively similar yearly revenue, meaning that on average they sell their rooms more days out of the year while still maintaining a high average rating. This is the second most popular property type, however it will require more engagement on the owners part, as they are booked more frequently than other property types.

Finally a property type that is well below average are shared rooms, with a drastic drop in nightly price, yearly revenue, and user engagement as well as slightly lower ratings. This is a property type we would not recommend to new Airbnb hosts, as it does not yield the same financial potential or user engagement as other property types.

To fully explore all of these elements, you can utilize this Tableau dashboard

Host Behaviors

Airbnb features a Superhost designation, which is awarded to individuals who demonstrate exceptional hospitality, maintain high standards, and consistently provide excellent guest experiences. The specific criteria for achieving Superhost status includes hosting at least 10 reservations or 3 reservations that total at least 100 nights, maintaining a 90% or higher response rate, maintaining a less than 1% cancellation rate, and maintaining a 4.8 or higher overall rating.

We analyzed Host and Superhost behavior to see if it influences their Airbnb success, and the results were clear. Superhosts tend to achieve higher average ratings of 4.9 stars, compared to 4.7 stars for Non-Superhosts. Additionally, Superhosts attract a significantly higher average number of positive reviews—65 compared to just 19 for their counterparts.

So how do they achieve it?

Superhosts distinguish themselves through maintaining quick response times (how long they take to respond), an almost perfect response rate (how often they respond), low cancellation rates, and consistently high guest satisfaction. With our data we found out that 89% of Superhosts always answer, with the remainder answering between 99% to 90% of the time. Consequently, 85% of all Superhosts answer within an hour and 12% within a couple hours.

On the other hand, only 68.8% of Non-Superhosts always respond, and just 56% respond within an hour, with 20% failing to respond at all. Since the number of reviews is our metric of success, it’s crucial to note that hosts who respond 100% of the time account for 87.7% of all reviews, while those who respond within an hour account for 77% of reviews in our data. As Superhosts consistently meet these benchmarks, we can infer that achieving Superhost status correlates with better customer acquisition and improved guest experiences.

In order to more fully explore these elements, you can utilize this Tableau dashboard

Common Characteristics

Now that we know what is driving the popularity of listings, my team wanted to focus on what properties were most common in Los Angeles County Airbnb listings. The first step was identifying how many listings each Airbnb host included in our dataset were responsible for. Below you can find the number of hosts operating different quantities of Airbnb properties.

The vast majority of hosts are operating between 1 and 5 properties. This category contains over 2 times the number of hosts in the following 5 categories combined. This tells us that most individuals are not trying to juggle an outrageous number of properties. Starting with 1 - 2 locations is a great way to get started and viable in the long term as well. Something else that is interesting to note is that Superhosts also follow this trend, so hosts that are doing well with Airbnb aren’t those with an extreme number of properties.

Groupings increase after the 11 - 20 bin because the number of Airbnb hosts operating that quantity of properties decreases. For example, for 21 - 30 listings, only 57 hosts would count and similarly for 31 - 40 listings, only 36 hosts would be included. So my team decided at this point that increments of 10 weren't offering us useful information. Similarly, if we had grouped the first bucket as 1 - 10 properties, we would have lost the ability to determine that 1-5 was the most common number of properties Airbnb hosts were operating.

Continuing the focus on hosts with 1-5 properties, we then determined that most properties include 1 full bathroom. Full bathrooms include a bathtub, shower, toilet, and sink. Our data included properties with up to 16 bathrooms, but after 4.5 baths, the number of listings drops to below 100. Moving onto bedrooms, the most common amount was once again one. Properties could have up to 23 bedrooms, but after 6, quantity once again decreased to less than 100. Using this information, we were able to determine that 1 bed/1 bath properties were the most popular and among hosts with 1-5 listings totaling 22.5% of all? listings. This data showcases that popular Airbnb listings are not mini mansions with half a dozen bedrooms and bathrooms, but more reasonably sized homes. And returning to our use of the number of reviews to measure success, graphs for the number of reviews by number of bedrooms and bathrooms looked remarkably similar to those shown below.

We next looked at pricing, reviews, and revenue for our 1 bed/ 1 bath properties. Price per night was not a column in our data, so we created a rough estimation by driving our price column but the minimum number of nights necessary to make a booking. Our average value came to $66.81. And with an average rating of 4.8 stars, guests are pleased with these accommodations. Compared to hotels with similar ratings in similar locations, $66 a night is a steal. The cheapest hotel the team was able to locate was still going for roughly $140 a night. Now obviously hotels vary considerably in amenities, with luxury lodgings in prime locations being more expensive. But our selected Airbnb properties were similarly positioned in tourism hotspots and for travelers who want a more at home feel to their vacations, your Airbnb is going to have much more appeal.

Remember that estimated yearly revenue was calculated assuming a property is available for 80% of all their available days. This value is also showing the value before Airbnb takes their 3% of booking subtotals. However, despite being a very rough estimation, with a yearly revenue of $11,812.19 1 bed/1 bath combos are doing well in terms of generating income. And if you’re looking to operate up to five properties, like a majority of our hosts were, you could be bringing in over $59,000. So while 1 or 2 properties might not be enough to completely replace your full-time job, this data shows that Airbnb can be a viable option for 2nd income sources, especially if just starting out on your hosting journey.

Listing Hotspots

But where are these properties located? Taking our same criteria of 1 bed/1 bath combos among hosts with 1-5 properties, we see several local spots with a high number of listings.

The first of these is Santa Monica, right near the beach. These listings were all between 5 and 15 minutes of museums, tourist attractions, and historic districts. For example, guests could visit the Mosaic Tile House, Venice Boardwalk, Cayton Children’s Museum, Santa Monica Pier, Bergamot Station Arts Center, and the Venice Canal Historic District.

Next up was downtown Los Angeles in the Historic Core District. Like its name suggests, properties in this area were all less than a 5 minute drive from museums and historical landmarks. Key spots included the Bradbury Building, Museum of Contemporary Art, Angels Flight Railway, The Broad Museum, and The Orpheum Theatre.

Finally, a large cluster was situated around Beverly Hills. The first of these two clusters have properties within a 15 minute drive to more museums, shopping, and unique L.A. experiences. These include The Grove, the Museum of Tolerance, Sony Pictures Studio Tour, Museum of Jurassic Technology, and the L.A. County Museum of Art. The larger cluster has similar appeal, with properties being within a 10 minute drive to iconic California landmarks and experiences. These include the TCL Chinese Theatre, Sunset Boulevard, Paramount Pictures Studio Tour, and the Hollywood Walk of Fame.

Now it is not surprising that listings with highly sought after features are clustered around points of interest for tourists. So, when deciding locations for new properties as an up and coming Airbnb host, research the spots being sought out by visitors to the area.

Conclusion

Now we can begin piecing it all together. We’ve looked at various factors that are influencing the success of Airbnb listings, but what does this mean for your hosting knowledge? First returning to property characteristics, we saw that entire and private place properties were the most common. This is unsurprisingly considering that Airbnb functions as an alternative to hotels and you typically aren’t asked to share your space. From looking at average review rating, we demonstrated that travelers tend to enjoy these accommodations and thus are a good place to look forwards for hosting inspiration.

In terms of amenities that were popular among the data, we found that 1 bed/1 bath accommodations were the most popular. This was both by sheer numbers and the number of reviews for these properties. When utilizing the dashboards, we saw that these properties were generating considerable revenue. So with each additional 1 bed/1 bath property generating about $11,000 in revenue, these elements are well-suited to set you up for success.

Finally, when looking to stand out among the ever increasing number of Airbnb hosts, the short answer is to be a Superhost. Awarded for above and beyond hospitality, guest experiences, and high property standards, this designation has been shown to result in more reviews and higher ratings.

Our dashboard can be used to further explore how different properties might perform in different areas of Los Angeles, how different property characteristics (amount of bedrooms/ bathrooms, how many people a place can accommodate) interact with each other, and how this all comes together and affects your bottom line.

To explore the data and visualizations, please visit our Tableau workbooks: Host Characteristics, Property Characteristics, Common Characteristics & Listing Hotspots.