Discover The Ultimate 5 Step Unhassle Tutorial To Simplify: How To Convert Your GuestHouse Into Airbnb Self Catering Accommodation | Cape Town Airbnb Management Agency
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Discover The Ultimate 5 Step Unhassle Tutorial To Simplify: How To Convert Your GuestHouse Into Airbnb Self Catering Accommodation

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Unhassle Tutorial: How To Convert Your Guesthouse Into Airbnb Self Catering Accommodation

 

How To Convert Your GuestHouse Into Airbnb Self Catering Accommodation sharedWhy would you even consider converting your guesthouse into Airbnb? 

Intro: Identify The Hassles With A Guest House Then Convert It To Airbnb

As you know, travel trends change and can affect you. A guest house or bed-and-breakfast requires a special type of passion and dedication. 

To be a chef, guest liaison officer, staff and maintenance manager, and marketeer makes your life more complex. And it’s 24/7. 

I believe that by converting your guesthouse or B&B into an Airbnb you will immediately reduce the complexity, you’ll give guests the freedom to choose a value, and your marketing will be easier. 

If you do it right, you’ll have a lot more time to enjoy life.

If you do it right, make more while working less… 

How? 

Let me tell you. But beware I am Airbnb biased. 

Doing less and getting more is based on my fascination with Pareto’s Principle. The clever Italian, to paraphrase him, implied something like:

Pareto On How To Convert Your GuestHouse Into Airbnb Self Catering Accommodation

80% of your return comes from 20% of your (most important) activities

Therefore, you can ask: am I wasting most of my time on a tiny return?  

I am a lazy guy. And this man helped me focus my time where it matters.

I adopted my own Pareto strategy… 

I always try to not chase after the 80% useless activities. I focus on the important and easy 20%. But it’s difficult to identify the critical 20% while running around (keeping a guest house afloat). 

This reminds me… 

Let’s Learn From Kitchen Nightmares

I love Gordon Ramsay’s Kitchen Nightmares. During his FIXing of a restaurant, one of his first goals is to replace the old menu with a handful of simple and excellent dishes. 

By doing less (and focusing on the important 20%), he shows how we can ensure consistency, easy stocktaking, less to source, easier to identify quality produce, happy patrons and a fast ringing till. 

Is A GuestHouse Designed For Many Activities? 

To me, its design creates complexity. It’s difficult to simplify; it’s nearly impossible. 

The owner is running around after very many activities. 

But I believe Airbnb gives you the opportunity to simplify: 

  • Reduce staff, 
  • Reduce changeovers, laundry, etc.
  • Stop sourcing food, prepping, and cooking. 

Obviously, you make more. 

Any proof? 

Yes. I’ll share it all later. 

Is There A Place For A Traditional GuestHouse? 

Breakfast How To Convert Your GuestHouse Into Airbnb Self Catering Accommodation

Breakfast is fun but adds complexity

The answer is‌ yes. There are amazing guest house owners who thrive. 

And there is a need. Specifically, for guests who want breakfast, daily room services, short stays for business or a quick break. 

But as trends change, tourists are looking for more independence and more local experiences. Nothing boring. And better value. This Forbes said, 

Guests Are Not Looking At Paying Less. They Are Getting Better Value For The Same Price

How Can An Owner Offer Better Value While Guests Want Flexibility? 

Today, guests are clever. They use tools like Airbnb and Uber to stretch their money. 

These guests are asking:

Why should I stay at a place with daily services, lots of linen changes, and breakfast at set times with set offerings? All these services increase the costs to me. 

Are today’s guests willing to pay a premium for these services you are dictating?

I don’t think so. But what do I mean by dictating?

It’s like watching TV before Netflix. You had limited choice and had to watch as per the fixed schedule. TV dictated to you. 

But Netflix gave you the choice. You can watch whatever whenever. Netflix does not dictate. 

Is Breakfast Really The Major Highlight? 

I read Guest House Pro, motivated why a B&B is ideal;

Whether you’re staying one night or an entire week, having a homemade breakfast can end up being the highlight of your trip. (ref

Yes, breakfast is an experience, albeit an inflexible one. A good one if a host doesn’t want to simplify. 

Consequences Inflated Rates At Airbnb

If you keep going the old bed and breakfast way on Airbnb, you’ll find the going tough. 

Your design of short stays, breakfast, other services and costly changeovers force you to inflate rates.

Unfortunately, on Airbnb, guests are not even given an option to search for hosts offering breakfast. 

When guests compare options they see your beautiful house photos but at inflated rates. And you get passed by.

What Are The Concerns Running A Bed And Breakfast? 

Here are a few concerns listed by HotelPropeller:

  • Working 24/7 and missing holidays.
  • Can you afford (and trust) to hire someone to run the B&B in your absence?
  • It’s never easy doing all the work by yourself.
  • You must be an exceptional marketer. 
  • Changeovers and arranging breakfast. 
  • Too few rooms are not profitable. Ten is ideal but not less than 5.
  • Low occupancy of 50%.

What Are The Pros And Cons Of Running An Airbnb? 

Simplicity How To Convert Your GuestHouse Into Airbnb Self Catering Accommodation

Airbnb: Easy, Relax, and Fun

Concerns Of Running An Airbnb? 

  • Many new hosts are worried about the type of guests they will get. Read how Airbnb qualifies guests. 
  • Although there are millions of hosts, few do well. Hosts should strive to become Superhosts. On average Superhosts generate twice as much income as ordinary hosts. 
  • Achieving high occupancy is difficult. It depends on the skill of the host. 
  • Effective pricing strategies are simple but difficult. 
  • Guests may throw parties. Yes. If you do one or two nights. We suggest 3 to 4-night minimum stays. 
  • There’s a threat of regulations. 

Obviously, there are other concerns, but they are common for Airbnb as well. 

What Are The Advantages Of Running An Airbnb?

    • We believe Airbnb could bring higher income
    • And a higher income whilst doing less
    • Less staff required. 
    • More free time: Scale down on guest interaction. This depends on the host. But the minimum we offer is meeting guests on arrival and greeting the guest on departure. And then on 7-day intervals to change linen depending on the length of stay. 
    • 1. Reduced costs: Increased length of stay to 4 nights or minimum of 3 nights. This can reduce potential changeover costs by 75%. This also reduces the number of arrivals, freeing the host even more. 
    • 2. Reduced cost: no more sourcing and preparing breakfast. Fewer essentials, like toilet paper, soap etc, as you are selling self catering. (only a start-up kit)

I can summarise this as more free time for the host, less input cost, and a higher income, or should I say higher profits. 

What Are The Objections Of Converting To Airbnb Self Catering? 

I found a few objections at a forum. Let me share them and then address them. 

  • The first issue I see is the daily service.

Daily service is a complexity to be simplified as mentioned before. 

  • Somehow, not having someone around seems like an invitation to trouble with single-room rentals. 

The above is a valid objection. But if you run an Airbnb home, like millions of others, then you allow guests to stay without someone present. 

This gives guests the independence, flexibility and freedom we mentioned.

If the above freedom worries you, then remember Airbnb owners have a powerful weapon…

Airbnb Hosts Wield A Power Guests Fear! 

Review Guest At Airbnb How To Convert Your GuestHouse Into Airbnb Self Catering Accommodation

Airbnb is the only site I know about that allows hosts to review guests for all to see. 

Eventually, all guests know, Airbnb will name and shame them if they misbehave. 

This results in unwelcoming guests getting eliminated. Great guests get 5 stars 🌟 

  • I would rather rent the entire house out to a group.

This objection or alternative is the easy way out. If the guesthouse is 5 bedrooms or less, then it is an easy (logical) option to consider renting the entire house. 

  • Having multiple strangers sharing a kitchen with people coming and going regularly is very difficult to manage.

This is a very valid objection. A conversion to Airbnb depends on sharing mutual areas. 

Again, I must remind you that as the host, you wield a sword to review guests. 

More on this below when we consider features. 

  • I had my guesthouse on Airbnb and made very little money.

Staying with your inflated guest house model, while on Airbnb, maybe a disappointment. 

  • But many guests want breakfast! 

Yes. A specific type of guest wants breakfast and daily services. 

Will Enough People Choose A One Bedroom Airbnb? 

The answer is yes. But let me say larger groups of people (p>2) prefer to not stay in shared accommodation. 

The following survey results are insightful and encouraging. 

(Please read it as they also explain why people are staying longer after Covid):

Nearly 40% of longer-term stays are for one person.

Nearly 40% of longer-term stays included two people. Survey respondents shared that the additional person in their booking was most often a significant other.

Guests are staying 28 nights, and longer doubled time during Covid. (ref

60% of longer-term guests were working or studying during their stays. (ref)

65% of guests work or study remotely during their stay. (ref) 

This is exactly where guest house converted owners can shine if they plan to Airbnb individual rooms with shared communal areas. 

Why? 

Your many one-bedrooms cater exactly for these long(er) staying singles or couples. 

From our own experience, with such a guest-house-Airbnb conversion, we noticed an influx of long-staying guests. 

Our guests are staying 28 nights to 3 months. A few are short stays, but our pricing strategy encourages longer stays. And currently, this property is close to 100% occupancy. 

What Features Are Required For The Guest House to Airbnb Conversion?

Feautures How To Convert Your GuestHouse Into Airbnb Self Catering Accommodation

What Size House Should Airbnb The Whole House? 

I mentioned that guest houses with 5 to 6 bedrooms and more should rather do the per room model. 

What About Kitchens When Converting To Airbnb?

Kitchenettes are a major advantage. With a reasonable kitchenette, a communal kitchen becomes irrelevant. 

What Extra Amenities And Features Do You Need To Attract The Ideal Airbnb Guests? 

We have seen that your ideal guest stays longer. They are mostly digital nomads and others study. These guests have specific needs.

High-Speed Internet Is A Top Priority

This is obvious. But if you don’t have high speed, you have nothing. Don’t skimp. 

Second Is Proximity To Frequent Destinations 

This can include family, restaurants, universities, points of interest (beaches, wine farms, shopping, etc). 

Comfortable Workspaces

These should be within the room, and, in communal areas. 

Neighbourhood Walkability

Mostly older people prefer this, but younger people don’t mind walking to fun places. 

Cool Amenities To Have

These will increase your occupancy:

  • Smart TV or TV with an android tv box. Where they can stream their own Netflix, etc. 
  • An ensuite bathroom or private bathroom will do better than a shared bathroom. 
  • Nice to have is a private patio or balcony. 
  • A private pool per room is the cherry on the cake. But a shared pool with enough sun loungers in a garden will suffice. 

Summary: How Do You Unhassle The GuestHouse to Airbnb Conversion? 

You don’t need to implement everything, you can change the ideas, but the more you do, the less you’ll chase the irrelevant 80%.

Stop The Breakfast. 

convert guesthouse to airbnb breakfast

Stop sourcing food and preparing food. I suggest you don’t mention bed-and-breakfast or guest house anywhere. 

Immediately Increase The Minimum Stay

Most guesthouses have a minimum stay of 1 day. 

Increase it to 3 nights. But set these minimum stays much longer for popular periods. We have ten nights minimum stays of very high demand periods.

Stop Unnecessary Room Services

  • No more daily cleaning. 
  • Limit linen changes to every 7 nights or when guests depart. 

Change Your Website

I mentioned removing the references to the guest house. Tell people about your self catering offering. 

Setting Daily Rates For Your Airbnb Converted Guest House

I recently wrote an article called:

Setting Daily Airbnb Rates Too High Is A Victory Not Worth Winning!

I suggest you read it. As most hosts have no clue how to set rates. 

convert guest house to airbnb supply vs demand pricing

Never ignore supply vs demand…

Let me try to summarise our Airbnb pricing strategy:

  • Guests are the only judge of rates; if too high they don’t book, if too low they book fast and furious. 
  • If there are no reservations, then reduce the rate. If you get too many reservations too quickly, increase the rate.
  • It’s important to set your best-guess daily rates for the various seasons. (Our short, very high season is three times higher than normal). 
  • Look at what you want to make in a year after Airbnb fees. Divide it by 365. That’s your rock-bottom minimum rate at 100% occupancy. 
  • Now, looking at the previous, and setting a reasonably high rate for 3 nights of 40% to 50% more than rock-bottom. 
  • Now, progressively, set discounts for 2, 3 and 4 weeks. Four weeks discounts could be close to 40% or 50%.

I am going to be blunt: Don’t be a fool

If guests don’t book, there is something wrong. Your only tool is daily rates. Reduce it. Get the money in. And get the reviews piling up. Airbnb will award you with love

Hopefully, following this Airbnb rate strategy you’ll have more peace of mind. 

Remember the 20:80 guy, Pareto? 

Case Study: Converting A Guest House To Airbnb

Being an Airbnb management agency in Cape Town, we steered away from complexity (the trivial 80% Pareto). 

Taking on the marketing of a large (7 bedroom) guest house is not simple. 

And we asked, why should we get involved with many one bedrooms? 

These individual rooms will just give us more admin headaches. For example… 

Each room gets listed separately on Airbnb. Instead of one enquiry for the whole 7 bedroom home, we now sit with 7 enquiries (for 7 rooms). And it multiplies. Is it worth it? 

But a beautiful guest house and an excellent host will make it easier. Let’s see…

Our Experience To Date Converting A Guest House to Airbnb

Sally*, the host and owner, wanted to convert her 5 star 7 bedroom guest house to an Airbnb in Stellenbosch South Africa. 

She wanted us to do the Airbnb (technology, marketing, pricing, etc) and she will be the host managing the accommodation and guests. 

She wanted more freedom and not to have to worry about technology, vetting guests and responding to requests 24/7. 

We eventually agreed. Now we wanted to share with you the million-dollar question… 

Why Did Sally Convert Her Guest House To Airbnb?

We asked her a few questions to understand:

  • Why Did You Decide To Convert To Airbnb?

I felt the environment change with younger tourists looking for experiences and I wanted an easier life. Let me break them down for you:

  • I wanted more freedom.
  • Airbnb is a lot simpler. 
  • Less staff and problems.  
  • Admin of reservations seamless. 
  • Finances are simpler.
  • Planning is easier. 
  • Less cost.   
  • I am more hands-on – I like hosting
  • No struggles with (listing) platforms and marketing.
  • Guest communications are simpler. 
  • I believe I can achieve my annual income goals with fewer activities

What Made You Think CapeHolidays Can Assist You?

I sat with my friend one day and she recommended you. At the time, I had a lot of creative stuff I wanted to do, but the guest house was bogging me down. Let me break it down:

  • Your short-term rental (Airbnb) experience and knowledge fascinated me.
  • Your marketing is the high standard I expected. Your slogan “Only The Remarkable Is Good Enough” says it all.

Results From Sally’s Guest House Conversion To Airbnb

The best judge would be to look at the annual performance. But that’s still many months in the future. For now, we will look from January to April 2022. Today’s date is 22 February. 

You’ll see from the image below showing the occupancy calendar for the seven bedrooms:

convert guesthouse to airbnb

For reference: We started mid-January on Airbnb. I took the above image on 22 February. 

  1. We started slowly after 11 January when we listed the 7 rooms.
  2. But as you scroll through February, March and April, you’ll see occupancy jumped to above 95% with a tapering off as we go forward.
  3. You’ll notice mostly long stays of 28 days and more. 
  4. As we progress through time, we expect more reservations.
  5. We have met nearly 30% of our annual goal income during the first two months (17%) of the year. 

You’ll agree ‌these figures exceeded our expectations. But again, before we brag, we must be consistent over 12 months. And time will tell as our winter, from May to September, is slower.

Hopefully, our long-stay pricing strategy will be flexible enough to maintain high occupancy.

The problem is if the host/owner will have the guts to not try to win the war and lose the battle; read more on the Pyrrhic victory.   

Final Thoughts On 5 Steps On How To Convert A Guest House To Airbnb

  1. Uncover and eliminate the 80% effort which returns only 20% value.
  2. Before you consider this option, decide if you want to Airbnb individual rooms or the entire house.
  3. Your competitive pricing strategy working on supply and demand will make you a success.
  4. If you want guests to experience your hospitality that does not FOCUs on breakfast, go the Airbnb route.
  5. One bedrooms ensuite with a kitchenette are ideal. But don’t let this stop you.

You should consider if you want to do everything, including Airbnb and manage yourself or if you want to get another to focus on Airbnb and marketing. 

If you do it right, make more while working less… 

If you have questions, leave a comment. 

Regards 

 

Johan Horak 

Experience The Remarkable at CapeHolidays. 

More Frequently Asked Questions 

What is the difference between a guest house and a bed-and-breakfast? 

A guesthouse is generally a larger property with more than 5 bedrooms. It is basically a small hotel and is usually owner-operated. B&Bs are generally smaller than a guest house and normally accommodate no more than 6 guests. Neither offers a restaurant or bar.

Is Airbnb considered bed-and-breakfast?

No, Airbnb is not a B&B. The B&B in Airbnb is confusing. Initially, Airbnb was called Air Bed and Breakfast. People were sleeping on air mattresses at the founder’s bed-and-breakfast. 

As it became popular, it was called Airbnb, and it morphed into self catering with no breakfast. (A host can offer breakfast if they want to). 

Airbnb is where almost anyone lists accommodations for short-term rent. 

B&B’s get regulated and subject to various laws. 

How is (unregulated) Airbnb’s quality ensured (graded)? 

Airbnb’s quality offering gets graded in a few different ways. 

Previous guests score the accommodation (and host) on various aspects out of 5 and leave a review. Airbnb averages the scores and is available to prospecting guests. 

The best host qualifies as Superhost

How are Airbnb guests graded? 

Guests are reviewed by previous hosts and only qualify to reserve instantly if their average score is 4.8 or higher. And they are verified. You can read more here.

 

1 Comment

  1. […] By now you know I love the Pareto Principle (we discussed it when we converted a guest house to Airbnb). […]

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