As we enter the second month of the last half of 2023, many real estate investors question whether Airbnb returns in Nairobi still make sense. With the hospitality industry evolving rapidly and the global pandemic continuing to influence travel patterns, a closer look at the data provided by AirDNA sheds light on the current state of Airbnb hosting in Nairobi.
Shifting Landscape of Listings
One of the most notable changes over the past few years is the rapid growth in Airbnb listings in Nairobi. According to AirDNA’s data, listings have doubled from 5,554 in 2020 to 10,9021 in 2023. This surge in listings underscores the growing interest in short-term rentals as an income source. However, it also introduces a new layer of competition that hosts must navigate.
Property Types and Preferences
Diving deeper into the data, we find that different property types dominate the Nairobi Airbnb market. One-bedroom listings constitute 46% of the total, followed by two-bedroom listings at 29% and studios at 7%. AirDNA’s data indicates that travellers prefer smaller, more intimate accommodations. The sweet spot is one to two bedrooms, accommodating an average of 3.4 guests.
Interestingly, travellers in Nairobi prefer booking entire houses, with 81% opting for this option rather than private or shared rooms. This trend aligns with the desire for privacy and a homely experience that an entire house can provide.
Occupancy and Rates
While the Airbnb market in Nairobi is bustling with listings, the occupancy rate paints a more complex picture. The data reveals an occupancy rate of approximately 31%, significantly lower than the global average of 56.4%. This discrepancy suggests that despite the many listings, hosts need help consistently filling their properties.
The average daily rate for Nairobi Airbnb listings is $46 (KES 6,633), a far cry from the global average of $166 (KES 23,937). This raises questions about the potential profitability of hosting on Airbnb in Nairobi compared to other locations.
Monthly Revenue and Challenges
The average monthly revenue per listing is around $298 (KES 42,972), which may seem appealing at first glance. However, hosts should interpret these numbers with caution. It’s worth noting that while some hosts can achieve higher revenues, the odds are only in favour of some. The competitive landscape, coupled with the relatively low daily rates and occupancy rates, can pose challenges for aspiring hosts.
The Changing Landscape
As Nairobi’s Airbnb market evolves, unique stays like the Container House in Kajiado or the A-frame in Karen stand out. These distinctive accommodations have a better chance of attracting guests seeking memorable experiences.
However, the growth of Airbnb in Nairobi has not gone unnoticed. Landlords and homeowners’ associations are tightening their grip on short-term rentals, particularly in popular areas. This shift in regulations adds an extra layer of complexity for hosts, making it imperative to stay informed and compliant with local laws.
Choosing Between Airbnb and Traditional Rentals
The decision to invest in Airbnb hosting versus traditional long-term rentals is multifaceted. While the potential for higher returns exists with short-term rentals, hosts must consider several factors. These include the fierce competition, seasonal fluctuations, the effort required to manage short stays, and the cost of furnishing properties to meet the standards of discerning travellers.
Before leaping, investors should conduct thorough research. Utilising platforms like AirDNA (and soon, SafariQuest Rentals) to gather comprehensive data for the local area can provide valuable insights into market trends, seasonality, and pricing strategies. Additionally, calculating the potential yields and comparing them with traditional long-term rentals can aid in making an informed decision.
In conclusion, while the glory days of easy and consistently high Airbnb returns may be in the past, the Nairobi market still holds opportunities for savvy hosts. However, success in this landscape requires meticulous planning, adapting to changing regulations, and offering unique stays that capture the imagination of travellers. As with any investment, carefully assessing the data, local trends, and personal goals is crucial to determining if Airbnb hosting in Nairobi remains a viable and lucrative venture in 2023 and beyond.
- Those with at least one reserved or available day in the last month. ↩︎