Short term rentals now generate billions of dollars of new revenue. The simple combination of a website listing, customer service and payments has created a new industry where ordinary people can rent out rooms and homes and earn some extra money for themselves. This isn’t to say companies aren’t getting into the action either – it’s quite a party, as everyone benefits from the convenience and value brought by short term rentals.
Like any new industry, there is enough to go around, and making your own short term rental app like Airbnb can be quite lucrative. But the question is what ingredients will give you the perfect recipe for success? Studying Airbnb can shed some light on the best practices for any new short term rental mobile app development.
What Is Airbnb?
Airbnb is a recent phenomena that has taken the travel industry by storm. Ordinary people are now able to rent out rooms and even entire houses themselves, acting as virtual hotels. Initially thought of as cheap accommodations for the founders visiting conferences, the idea has grown into a multi-billion dollar company that empowers people to become hosts. Luxury accommodations are commonplace, and features especially interesting for larger parties are available.
The idea is simple. A website listing rooms and entire properties for rent, while also handling scheduling, payments, customer service and reviews. Users can browse listings as diverse as single rooms, entire houses, ranches, islands, boats and RVs. Users communicate through the platform and book rooms. Airbnb also provides a modicum of support with their AirCover insurance, as well as a review system to vet problematic users.
Customers enjoy the variety of rentals on the site. More than just a hotel room, one can book an island, a campsite or a luxury villa. These rentals probably existed before, but were not as easy to find until now. Another benefit is accommodating needs, such as families who want kitchens for their hungry families or travelers who want extended stays.
Hosts love the site because they are now discoverable in a centralized search system. Customers can browse areas and times easily with Airbnb’s map and scheduling system. Additionally, there is a bit of credibility and security booking with Airbnb. Reviews allow one to vet hosts, properties and customers. Payments are handled through the website. Airbnb also offers customer service to mediate disputes as well as additional insurance for emergencies.
AirBnB Market Trends
Airbnb has grown dramatically in the last ten years. While the number of properties has decreased slightly, they still have over 12 million listings and generate almost $50 billion in revenue. The site is immensely popular, although very recently there has been some backlash against parties, cleaning fees and chores required by hosts of some properties. Another constant struggle is between neighborhoods who want to prevent companies from coming in and displacing residents and those that want to earn some extra money for their properties.
Regardless of these issues, it’s clear that Airbnb is here to stay. Growth in recent years has been spectacular, and it’s common for some growing pains to occur. But the convenience and selection is hard to beat for many.
Essential Features of a Rental App like AirBnB
The popularity of Airbnb and their app shows in their app store reviews. On Android, they have over 100 million downloads and over 1 million ratings (4.5 star), while on Apple, they have 585,000 ratings (4.8 star). Clearly the app has the right mix of form and function, and it’s worth investigating.
The biggest feature of any short term rental app such as Airbnb are the listings and searching capabilities. Any app needs to have an easy to use search function that lets users search by location and date and view available properties. One should be able to filter by guests, specific amenities and price.
Besides the obvious search features, Airbnb has a nice feature to search for “flexible dates” if you want an area but can adjust your schedule for better pricing. This makes searching for properties easier. Additionally, at the top of their app they show some quick searches for different property types such as cabins, houses and even something called OMG, which showcases more unusual properties.
Once users have found the ideal property, displaying all the relevant information clearly is extremely important. There’s a lot to display and it needs to be organized properly. That is where a good UI/UX (user interface, user experience) expert is needed. Users want to see photos of the property, read amenities, see possible schedules and reviews. It’s a lot of information to show on a small mobile app screen.
Once users have selected their property, managing the booking is the key user experience. Simply scheduling the dates is one part, but people may want to cancel or adjust bookings. Also, the checkout procedure has to be smooth and frictionless, as you want to finish the transaction as quickly as possible.
Property and Client Ratings
We talked about ratings and reviews earlier when we discussed the listings in general. But these topics are so important they warrant their own discussion. The real value behind an app like Airbnb is the reviews and ratings. After all, people want to know if the properties are really what is described. On Airbnb, there are extra ratings besides the general “how did you like it.” There are ratings for things like photo accuracy, location accuracy and value. The goal is to make sure the property matches its description accurately.
On the client side, hosts don’t want someone who is going to cause problems with neighbors, loud parties, dirty tenants or poor behavior. These are all things that the host can rate customers for, and it’s viewable to the next host when considering a guest.
Because of the importance of these ratings, any short term rental app needs to have a proper system in place to manage the reviews. Collecting the reviews is the easy part. But afterwards, there has to be a system to post responses, mediate reviews and check for accuracy.
Messaging is one of the most important aspects of a short term rental app. Airbnb typically hides the exact address of the property until after a stay is booked. Therefore, traditional communication through email or texting is not possible. Instead, they provide their own messaging inside their app.
An internal messaging system, therefore, needs to be able to handle everything hosts and tenants need. Otherwise, there is a risk that bookings will move off the platform, and this results in a loss of revenue. The most important aspect of messaging is to be both reliable and fast. The app should support push notifications for immediate responses. It should also allow attachments and other images.
There are many technical considerations to discuss with any app development. A deeper discussion can be found here. However, for this article we will focus on a few important issues.
Mapping listings is one of the most important features of a short term rental app. People typically want to be located in a specific area when booking a vacation. For this reason, it’s important for the app to have integration with a mapping system, such as Google Maps. Of course, there are alternatives like Mapquest, for example.
All rental apps should show listings on a map view. Sometimes, as in the case of Airbnb, there is a reason to anonymize the exact locations until absolutely necessary. Besides showing listings, it’s important to allow filtering by location and availability on the map, which requires some sophisticated coding. It’s worth it, however, as users need this to visualize when and where their travels could occur.
Care must be taken when integrating a map provider. Each provider typically charges based on how many times users fetch data. If someone is searching often, and the app is not coded properly, the number of fetches could be quite high, resulting in increased fees to the developer. Sometimes caching can reduce the number of queries, especially when scrolling around a map.
Accepting payments is a big part of any app, and a short term rental app is no exception. There are multiple considerations when choosing a payment processor. For apps, the most common processors are Apple Pay and Google Pay. These payment systems were developed specifically for apps. Because they are directly linked to the phones themselves, the interfaces are very fast. Usually it takes just one or two clicks to process a payment. However, the fees, which have been decreasing, are higher than other processors. When the in-app purchase first came out, fees were a whopping 30 percent of transaction costs! Now fees start at 15 percent and go down. Whatever the case, in-app purchases are still pretty expensive to the app owner.
An alternative system is to use a payment processor such as Stripe. This is more like a traditional credit card processing system. The downside, however, is that first time users need to enter a credit card number, zip code and, many times, a security code. This introduces “friction” into app transactions. However, the fees are typical credit card fees of 2.9 percent plus 30 cents.
There are other alternatives, such as Paypal, and they have similar pricing.
When choosing an app payment processor, probably a big consideration is if transactions might happen on the web. Sites like Airbnb have a web portal and users commonly go back and forth between them. So, a payment system that relies solely on in-app purchases will not work.
Whatever the case, the short term rental app development must consider all its use cases and costs before selecting a payment processor.
Scalability is a word that describes how easily and well a platform can handle more and more users. This relates to how the platform was created. For example, WordPress powers more than 40 percent of the internet and is quite a popular framework. However, is it suitable for something like a rental app? It depends. Because WordPress is a content management system (CMS), there are some difficulties in backing up and updating the site. Some people may consider this an impediment to scalability.
Definitely enterprise level developments do not use something like WordPress, and instead go with a custom coded development. The cost of custom code is much higher than a content management system like WordPress, but the scalability is much better. For example, Django, which is a python framework, has powered sites with more than 100 million users and can be set up in a fully enterprise level development setting.
The choice between developing quickly or preparing for scalability usually depends on cost and speed. However, it is something that should be considered before any serious development.
When developing any app, legal issues should be considered early in the development cycle. Insurance, dispute resolution and customer service are all extremely important to an app’s success and have nothing to do with the technical side of development.
While insurance is not exactly the responsibility of a rental app, it is an important consideration of the business as a whole. Airbnb, for example, offers its hosts coverage under its AirCover plan, which operates a little like an umbrella policy over all its hosts.
Hosts should have their own policy, but it’s prudent to shield the app legal entity itself from liability. Also, it may be a marketing technique to assure worried hosts to join your program, as they are unable to evaluate all the risks of renting out their properties.
Dispute resolution is another feature of app development that is mostly not technical. While there may be a location in the app to file a dispute or flag a listing, the real work goes on behind the scenes. It’s valuable to give the admins some methods to view and comment on disputes. Disputes can have statuses that move them through the dispute resolution process, including open, pending, rejected and approved.
Care should be taken to develop the proper process during the UIUX phase so that disputes can be handled properly. Because if there’s one guarantee in life, it’s that people will have disputes!
Niches and Competitors
Trying to compete directly with entrenched sites is possible, but it takes deep pockets. A more popular technique is to find a niche and apply the same principles to that niche by offering features that improve on the experience. Here’s a few examples of competitors or niche competitors.
VRBO is probably the biggest competitor to Airbnb. It has virtually the same target audience and offerings, in addition to searches, listings, payments and reviews. It’s a good comparison of UI/UX if you want to see an alternative design.
Furnished Finders is a perfect example of a niche site. Although they are a short term rental site, they focus on medical professionals like traveling nurses and doctors. They do not have much in terms of features because bookings are managed directly with the owners. Instead, they offer a background check service and mostly simply listing. However, they don’t charge fees per bookings, as they are done directly.
Traditional Hotel Booking Sites
Booking.com is a site that focuses on hotel bookings. They offer the same features on their app as Airbnb with listings, searches and reviews; however, they are geared towards commercial hotels so there isn’t an admin site for regular “hosts.” Their site plugs directly into hotel booking systems.
Building an MVP
Now that there has been a full analysis of Airbnb and other short term rental apps, it’s time to look into building a Minimally Viable Product (MVP). This term is widely credited to Eric Ries and his book The Lean Startup. The book explains the goal is to get a version of your idea up and running as soon as possible with the smallest set of features. By doing so, you can get users and collect feedback, letting the user’s guide your development.
4 Steps to Build an MVP for a Rental App like Airbnb
The first step is to research a niche and evaluate the idea, as finding the right idea needs confirmation. A lot of times one can test the idea without building an app. Instead, starting with a website, spreadsheet or even pencil and paper. By the time you have enough users where things get out of hand you know you have the right idea and can get started.
In the case of a short term rental app, pencil and paper isn’t going to cut it because you need somewhere for users to list their properties. Instead, you could start with a listing site first and manage customer service and other items manually.
Once you’ve verified your idea, you will need to decide what features are the most important, what you can afford and what your customer wants. Then you should start on the UI/UX and design the app to be as intuitive as possible. You may need to build an app first, get feedback and make changes. This is called iteration, and is quite often done with established businesses like Airbnb. Keep in mind their first website was very clunky and visually unappealing, but people still wanted deals and used it.
3. Develop and Test
Building the actual app will take time and is better left to the professionals. Hiring an established company is recommended, as they’ll have the resources to help you fix bugs quickly and add features. Development is not always steady and you need resources at a moment’s notice. This is something an individual developer can’t provide.
4. Deliver and Maintain
Now that your app is done, it’s time to get users and gather feedback. During this time, you should have your developers ready and waiting to fix any upcoming issues. Time is of the essence because people’s attention spans are shorter than ever.
Idea Maker’s Experience In Housing Rental
If you are searching for a trusted and experienced development agency to bring your rental app to life, then look no further. Idea Maker has built a variety of custom mobile applications and websites, including Open House Junky, which seeks to simplify the house hunting process by connecting real estate agents and homebuyers. With our expert team of designers and developers, you can rest assured that all your ideas will be transformed into reality. You dream it and we build it. Schedule a consultation with us today, and we’ll take care of the rest.