While the travel ban imposed in South Africa in November 2021 due to the recent discovery of the Omicron variant initially decreased the international demand for luxury accommodation over the festive season, those who had invested in affordable short-term letting properties in coastal areas remained relatively unscathed.

“With borders closed and once it became clear that a beach ban would not be imposed, both South Africans and international travellers who could still come into South Africa truly embraced coastal travel over the festive season,” explains property investor and MD of Only Realty Group Grant Smee. “And surprisingly, while large hotels across the country still had many rooms empty, it was almost impossible to get an Airbnb in hotspot areas such as Cape Town, Kenton and Plettenberg Bay during this time.”

Smee attributes the success of short-term letting during the holiday period to shifting consumer preferences: “Since the onset of the COVID-19 pandemic, many travellers feel that short-term lets are safer than a hotel because you have control over your entire living environment, which isn’t possible in a hotel where you are sharing common areas and lifts with many other guests,” he explains. 

“Short-term letting has also become increasingly affordable, and you can often get an entire flat for the same price as a single room in an upmarket hotel. A desire for privacy and convenience are also contributing factors.” 

What the stats are saying

A recent Airbnb report indicates that it has seen rapid growth in recent years. Domestic travel on the platform grew almost six-fold from 2016 to 2019 even though domestic travel decreased by 9% during the same period.

Airbnb contributed R10,97 billion to South Africa’s GDP in 2019 and R8,1 billion in 2020 – an impressive figure considering the devastating impact of COVID-19 on the tourism industry that year. “It’s clear that locals are embracing Airbnb when travelling domestically and that owners with desirable properties are cashing-in,” comments Smee.

Success isn’t a given

Airbnb may be the most popular platform for short-term letting in South Africa, but Smee warns that the profitability of a property investment is not always guaranteed. “Short-term letting has a higher turnover than long-term rentals and can be more lucrative, but you’re also losing out on the financial security of having a long-term tenant.”

Other important factors to consider before listing on Airbnb:

• Check your complex/building rules. “To protect the safety of other residents and reduce noise disturbances, the Body Corporate rules of apartment buildings and complexes will sometimes prohibit short-term letting, particularly in touristy areas such as Sea Point in Cape Town.”
• Consider location. “If you’re buying a property purely for the purposes of short-term letting, make sure it’s in an area that people will actually want to visit.” 
• Price it according to what you’re offering. “If you’re listing a property at top-end prices (in the R2,500-R7000 per night range), make sure that you’re offering luxury accommodation. Domestic travellers are still shopping around for good deals so its strongly advised not to out-price your property and risk losing income.” 
• Remember that demand won’t be the same year-round. “Make sure you can afford to cover the quiet months when you may only have one or two guests. If you’re in a coastal area, consider different pricing for summer and winter.”

How to make your property ‘Airbnb ready’ 

Once a would-be host has considered whether short-term letting is a viable prospect, one should consider the following factors to entice visitors: 

• Make sure that your listing includes high-quality, well-lit pictures of each room and the outdoor areas your guests will have access to.
• Write a detailed property description that includes what guests can expect when staying, the house rules, what amenities they can enjoy and more information on the area they will be visiting.
• Offer flexible check-in hours or better yet, a lockbox or keypad that allows guests to safely check-in on their own.
• Ensure that the property is regularly maintained. 
• Upgrade the safety of the property. This can include installing an alarm system, electric fence and burglar bars on the windows.
• Ensure that the property is thoroughly cleaned before and after their arrival – consider a professional cleaning service as this can be built into the price of a rental.
• Make sure that the property is adequately ventilated and provide mechanisms for heating and cooling the rooms.
• If the property is not a dedicated short-term let but rather a holiday home or a guest suite in your house, ensure that all personal items are removed. 
• Install high-speed internet and consider purchasing streaming services for guest use if there is a television on the property.
• Invest in hotel-quality linen and towels and complimentary amenities such as soap or toothpaste.
• Provide on-site laundry facilities.
• Make sure that the kitchen is fully equipped with the necessary utensils for cooking.
• Consider investing in your outdoor areas, such as a dedicated braai area or a swimming pool as these are sought-after features.

Finally, Smee recommends that the best way to ensure the profitability of a short-term property investment is to treat it like a business, and make sure that guests have a hotel-worthy experience. “Consider hiring a professional Airbnb management service if you are unable to do this yourself, as they can also assist with guest check-ins and managing bookings,” he concludes.