With over 6 million Airbnb listings worldwide, knowing which cities generate the highest revenue for hosts is key for those looking to make the most money on their short-term rental investments. In this article, we’ll examine data on the most profitable Airbnb markets and cities around the world to help current and aspiring hosts maximize their rental income.
How Airbnb Profitability is Measured
There are a few key metrics used to measure how profitable an Airbnb rental can be in a given city:
- Average daily rate (ADR) – This calculates the average price charged per night for an entire home or apartment rental.
- Occupancy rate – The percentage of days throughout the year that a listing is booked.
- Revenue per available rental (RevPAR) – Total rental revenue earned divided by the number of available rental days. Combines ADR and occupancy.
Cities with higher ADRs, occupancy rates, and RevPAR indicate more demand from guests and an ability to charge higher prices. This results in maximum revenue for hosts.
Global Overview of Most Profitable Airbnb Cities
Airbnb has grown tremendously since its start in 2008 to over 4 million hosts worldwide. While popular tourist destinations often top the list for profitable Airbnb markets, major cities across the globe represent a significant share.
According to Airbnb data, here are some of the most profitable cities globally based on Airbnb host earnings:
- Paris, France – $24,300 average annual revenue per host
- Sydney, Australia – $22,700 average revenue
- Cape Town, South Africa – $21,300 average revenue
- San Francisco, USA – $21,000 average revenue
- New York City, USA – $20,500 average revenue
The average global Airbnb host earns about $9,600 per year. However, as the above data shows, listing in an in-demand location with higher tourism can result in revenues over $20,000 annually.
Factors That Impact Airbnb Profitability
Why do the cities above earn so much more than average on Airbnb? There are a few key factors that drive profitability:
- High Tourism/Traveler Demand – More visitors looking for accommodations means higher occupancy rates and ability to charge higher prices.
- Location – Properties located very close to top attractions or city centers command higher rates.
- Events/Seasonality – Big events, concerts, conferences, and peak tourist seasons drive up short-term rental demand.
- Regulations – Cities with strict rental limits can constrain supply and increase occupancy for eligible properties.
Understanding these factors in a city and local market is key for maximizing Airbnb profitability.
Most Profitable Cities for Airbnb in the United States
The United States has over 1 million Airbnb hosts and is the platform’s largest market globally. Here are some of the top cities American hosts are earning the most rental income in:
| Metro Area | Average Annual Host Revenue |
|---|---|
| Kailua-Kona, HI | $52,500 |
| Cape Coral-Fort Myers, FL | $23,000 |
| Urban Honolulu, HI | $21,500 |
| Naples, FL | $20,800 |
| Barnstable Town, MA | $19,900 |
| Santa Cruz-Watsonville, CA | $19,800 |
| Nantucket, MA | $19,600 |
The top cities like Kailua-Kona and Urban Honolulu in Hawaii far exceed the U.S. average host earnings of $13,800. What makes Hawaii such a profitable Airbnb location? Factors like consistent tourism demand, remote island geography limiting accommodations, and proximity to attractions like beaches drive revenue.
State-Level Airbnb Profitability
In addition to metro areas, Hawaii generates the highest average income for Airbnb hosts across all U.S. states. Here are the top 5 states by host earnings:
- Hawaii – $30,900 average revenue per host
- Florida – $17,900 average revenue
- California – $15,900 average revenue
- Vermont – $15,500 average revenue
- Maine – $14,900 average revenue
Popular winter vacation destinations like Florida and California join Hawaii at the top with their consistent tourism demand. Certain cities and states clearly stand out for their Airbnb profit potential based on local markets.
Most Profitable U.S. Airbnb Cities by Occupancy Rate
In addition to earnings, occupancy rate is a top indicator of profitability. The higher the occupancy, the more days throughout the year a listing is rented. Here are top U.S. cities by Airbnb occupancy rates:
| Metro Area | Occupancy Rate |
|---|---|
| Breckenridge, CO | 84% |
| Gatlinburg, TN | 83% |
| Kissimmee, FL | 80% |
| Panama City, FL | 79% |
| Miramar Beach, FL | 78% |
Popular tourist destinations like Breckenridge and Kissimmee have the highest occupancy rates, keeping units consistently filled. This maximizes rental revenue for hosts.
Most Profitable Cities for Airbnb by Rental Type
Airbnb offers different accommodation types – shared rooms, private rooms, and entire homes or apartments. Profitability can vary across these rental types. Here are top cities based on annual host earnings by rental type:
Most Profitable Airbnb Markets for Shared Room Rentals
| Metro Area | Avg. Annual Revenue |
|---|---|
| Los Angeles, CA | $9,000 |
| San Francisco, CA | $8,600 |
| San Diego, CA | $7,900 |
| Austin, TX | $7,500 |
| Chicago, IL | $7,200 |
Major metro areas like Los Angeles and San Francisco with young transient populations are most lucrative for renting out shared rooms via Airbnb.
Most Profitable Cities for Private Room Rentals
| Metro Area | Avg. Annual Revenue |
|---|---|
| Kahului, HI | $17,900 |
| Kaunakakai, HI | $17,800 |
| Kapaa, HI | $17,500 |
| North Port, FL | $16,600 |
| Port St. Lucie, FL | $15,800 |
Hawaii and Florida vacation destinations lead for private room profitability, signaling strong tourism demand.
Most lucrative cities for entire home/apartment rentals
| Metro Area | Avg. Annual Revenue |
|---|---|
| Kailua-Kona, HI | $66,100 |
| Hilo, HI | $43,100 |
| Urban Honolulu, HI | $40,400 |
| Lahaina, HI | $39,100 |
| Naples, FL | $30,400 |
Kailua-Kona, Hawaii tops the list for whole home/apartment rentals by a significant margin. Hawaii continues to dominate this category with 4 cities in the top 5. Naples, Florida breaks into the top 5 as the only non-Hawaii destination.
Factors Driving Hawaii’s Airbnb Profitability
It’s clear Hawaii has the most profitable cities for Airbnb hosts across all rental types. Let’s examine why in more detail:
- High Tourism Demand – Hawaii sees over 9 million visitors annually. Vacationers flock to the islands year-round for the beaches, nature, and tropical climate.
- Limited Accommodations – Due to the remote island geography, hotels and rooms are more constrained versus mainland destinations.
- Ideal for Entire Home Rentals – Hawaiian homes with ocean/mountain views in vacation areas generate strong demand for week+ long rentals.
- Regulatory Environment – Rules allow vacation rentals while limiting hotels. Oahu has occupancy limits which reduces supply.
- Premium Pricing – Hawaii’s desirability lets hosts charge higher nightly rates, especially in peak seasons.
Combining scarce vacation rentals in a popular island destination with premium pricing drives Hawaii’s position as the most profitable Airbnb market in the U.S.
Tips for Maximizing Airbnb Profitability
While Hawaii may be the holy grail for profitable Airbnb listings, hosts in many global cities can earn excellent income. Here are tips to maximize your revenue:
- Target tourist hotspots – Popular destinations enable higher rates and occupancy.
- Focus on entire home rentals – These earn significantly more than shared/private rooms.
- Price competitively based on local rates – Don’t under-price compared to similar listings.
- Highlight premium features – Oceanfront views, luxury amenities, new furnishings, etc.
- Pay close attention to reviews and cleanliness.
- Block off dates far in advance when occupied for peak seasons.
- Experiment with pricing to find the optimal rate.
Analyzing the data and deploying best practices can help hosts maximize Airbnb income. While not every market is Hawaii, the platform provides an appealing way to generate rental revenue. Attention to listing quality, pricing, and responding to traveler demand makes earning $20,000+ per year achievable in many global destinations.
Conclusion
Hawaii, especially cities like Kailua-Kona, consistently ranks as the most profitable Airbnb marketplace in the United States. Key factors like high tourism demand, limited accommodations, and premium pricing position Hawaii so well. For hosts in other cities, targeting popular tourist destinations and entire home rentals while paying close attention to pricing and listing quality is key to maximize income. While only a tiny fraction of listings will earn over $100,000 like in Hawaii, data shows Airbnb can be a highly lucrative rental platform across destinations worldwide.