The Rise of Airbnb: Which Cities Are the Most Profitable for Airbnb Landlords?

The Rise of Airbnb: Which Cities Are the Most Profitable for Airbnb Landlords?

In recent years there has been an influx in travellers staying in Airbnbs, and the site now showcases more than six million rooms, flats and houses in more than 81,000 cities across the globe. But where can landlords looking to venture into this space expect to make the most money?

A new study by CIA Landlord Insurance has revealed the average cost to stay in an Airbnb around the world, in the city and close to renowned landmarks, along with the cost to buy properties here, to reveal the most profitable cities for landlords. 

Landlords With Airbnbs Near The Burj Khalifa Make The Most Money 

CIA Landlord Insurance

In the last 40 years, Dubai has become a city of skyscrapers and many have flocked here for city breaks and hot holidays. But how much money can landlords make here? 

Landlords who have a property close to the Burj Khalifa, the world’s tallest building, are making the most money of all Airbnb owners. With the average cost of staying here sitting at £930 a night, Dubai is the most expensive Airbnb location across the globe. This means landlords can make £6,510 if guests stay for 7 nights. However, this is only a profitable location for landlords who have a property near the Burj Khalifa, as those further away rent for just £181 per night. 

New York ranks second for charging the most for Airbnbs, with those near Central Park costing £767 per night. However, landlords can still make money if they have a property further away as the going rate is £534 per night. This makes New York City, as a whole, the most profitable location for Airbnb landlords. 

Although landlords can clearly make money from buying properties within these locations, where in the world will it take them the least amount of time to earn their money back?

The following table shows the cities with the biggest price difference in the cost of staying in an Airbnb near a landmark compared to the city: 

Rank

City 

Landmark

Average Cost of Staying in an Airbnb Near the Landmark For 1 Night (£)

Average Price to Stay In an Airbnb in the City for 1 Night  (£)

1

Dubai

Burj Khalifa 

930

181

2

NYC

Empire State Building 

767

534

3

Edinburgh

Edinburgh Castle 

416

100

4

Paris

Arc de Triomphe 

412

115

5

San Francisco

Golden Gate Bridge 

403

196

6

Miami

Everglades National Park 

370

95

7

Nairobi

Serengeti National Park 

367

216

8

Barcelona

La Sagrada Familia

358

164

9

Seattle

Space Needle 

294

272

10

Venice

Rialto Bridge 

286

115

Landlords Who Buy Airbnbs Near the Burj Khalifa Could Make Their Money Back in Just Four Months 

CIA Landlord Insurance

Landlords in Dubai can not only make the most money, but it takes them the least amount of time to earn it back after investing. With the average price to buy an apartment in the city costing £112,624, landlords would need to have guests stay for an average of just 121 nights to break even. This does, however, exclude any expenses or costs for furnishing the property, so landlords should factor this into their overall outgoings too. 

The second most profitable location for landlords is Hilo, in Hawaii, where it takes just 200 nights to be sold for landlords to make their money back. With the average cost of buying an apartment here also over half that in Dubai, £51,300, this is a safer investment option for those just beginning their Airbnb journey. 

The following table shows the cities where it will take landlords the least amount of time to earn their money back if they Airbnb a property: 

Rank

City 

Country 

The Average Price of Buying a 1 Bed Apartment in the City (£)

The Average Cost to stay in an Airbnb here for 1 night (£)

The Average Number of Nights a Landlord Would Need to Airbnb Their Property to Make Their Money Back  

1

Dubai

UAE

112,624

930

121

2

Hilo

USA

51,300

257

200

3

Hanoi

Vietnam

66,776

232

288

4

Nairobi

Kenya

108,447

367

295

5

Niagara Falls City

USA

37,620

115

327

6

Athens

Greece

81,969

217

378

7

Las Vegas

USA

104,959

262

401

8

Edinburgh

UK

168,964

416

406

9

Cairo

Egypt

21,686

50

434

10

Foz de Iguazu

Brazil 

29,234

66

443

London Ranks Fourth for Being the Least Profitable Location for Airbnb Landlords 

CIA Landlord Insurance

Whilst there are many places around the world where landlords can earn their money back quickly, Cuzco, in Peru, is extremely unprofitable for Airbnb landlords. It would take over 13 years (4,810 nights) for a landlord to earn their money back here, and that is if the property was occupied by a paying customer every single night. This is 3,875% more than that of Dubai. and is primarily due to the extremely low nightly costs of Airbnbs. 

London ranks fourth for being the least profitable and Airbnb landlords can expect it to take over five and a half years (2,803 nights) to earn their money back after investing in a property here. With the average cost of buying a one bed apartment being £524,088, landlords here would need to charge more to make their money back quicker. 

But which cities around the world are in demand and have the most travellers?

The following table shows the cities where it takes landlords the longest to earn their money back if they Airbnb a property: 

Rank

City 

Country 

The Average Price of Buying a 1 Bed Apartment in the City (£)

The Average Cost to stay in an Airbnb here for 1 night (£)

Nights a Landlord Would Need to Airbnb Their Property to Make Their Money Back   

1

Cuzco

Peru 

129,861

27

4,810

2

Beijing

China 

648,595

172

3,771

3

Nairobi

Kenya

108,447

32

3,389

4

London

UK

524,088

187

2,803

5

Sydney

Australia 

379,531

150

2,530

6

Singapore

Singapore 

590,733

235

2,514

7

NYC

USA

493,266

198

2,491

8

Taipei

Taiwan 

410,399

176

2,332

9

Rome

Italy 

524,088

127

1,869

10

Paris

France

437,440

241

1,815

Central Park Is the Most Instagrammed Landmark Across the Globe 

CIA Landlord Insurance

With social media on the rise, the want for travellers to get that picture perfect backdrop is increasing. The most instagrammed landmark across the Globe is Central Park in New York, where over seven million photos have been posted across the social media site along with the hashtag ‘#CentralPark.’ 

Paris ranks second, with the Eiffel Tower hashtag following closely behind with just under seven million photos and Dubai comes third with just over five and a half million instagram photos tagged at the Burj Khalifa. With the world’s tallest building only being finished in 2010, it is clear that Dubai is a city that is highly desired by travellers and has seen an immense amount of popularity in the last decade. 

The USA is home to the majority of the most instagrammed landmarks, making it the most desired country for travellers looking for the perfect picture. Whilst this does not suggest that these are the most profitable places for landlords who want to begin their Airbnb journey, there is definitely a demand here for people needing a place to stay as there is clearly popularity around the landmarks.  

The following table shows the cities where there are the most photos tagged with their landmark’s hashtag: 

Rank

City 

Country

Hashtag 

Number of Instagram Photos Using This Hashtag 

1

NYC

USA

#CentralPark

7,962,543

2

Paris

France

#Eiffeltower

6,947,540

3

Dubai

UAE

#BurjKhalifa

5,799,087

4

Las Vegas

USA

#Lasvegasstrip

5,458,210

5

Flagstaff

USA

#GrandCanyon

4,093,640

6

Niagara Falls, NY

USA

#NiagaraFalls

3,351,480

7

San Francisco

USA

#GoldenGateBridge

3,125,324

8

NYC

USA

#EmpireStateBuilding

3,038,595

9

Cuzco

Peru

#MachuPicchu

1,996,204

10

Delhi

India 

#TajMahal

1,933,641

Whilst landlords may be sceptical about investing within properties for the purpose of Airbnb’s, it is clear that there is a demand for properties in this space, and it is a profitable business move. It is important, however, that landlords weigh up the pros and cons with investing abroad, especially in countries in other continents where maintaining properties and guests will be harder. If these problems can be overcome then evidently they will see a healthy return. 

Methodology 

The average cost of staying in an Airbnb near the city's landmark was used compiling all the properties that were available from july 8-9, 2023, for two adults sharing a room. Please note the average price for Airbnb’s in Singapore close to landmarks is higher due to the amount of high-end hotels in this area.

All data for the average cost of a property was collected from city-specific pages on numbeo. We used the closest city to the landmark when the data for that location was not available. 

How long it would take landlords to earn their money back was determined by the average size of a 1 bed apartment being 450 square feet. The price of the apartment was then divided by the avg. airbnb price for per night.

Sources

www.airbnb.co.uk

www.numbeo.com