App monetization isn’t just about selling a product and pocketing the profit—it’s a whole different game.
Popular vacation rental apps thrive on offering convenience. So it's vital to know how you generate revenue before getting started.
We will see different monetization strategies—from commission to in-app advertising.
Each method can help you identify the most effective ways to generate income and sustain your app long-term.
1. Commission-based Model
It is one of the most common and popular ways to monetize your app.
As you know, it’s the main revenue source for platforms like Airbnb.
In this model, you may charge a percentage or flat fee for each successful booking made through the app, from the guest and the host as well.
Let’s see how Airbnb has been doing this.
For hosts, Airbnb charges a flat service fee of 3% on the booking subtotal. Whereas for guests, they charge around 14% of the booking subtotal.
How can you approach the commission-based model?
In the initial time, offer lower commission rates to attract new users, then gradually increase the rates, as your platform becomes an established one.
2. Subscription Fee
Subscription fee is a recurring payment, where users have to pay monthly, or yearly.
This ensures a predictable revenue stream.
When you come up with a subscription plan, users would expect beyond the normal service offered.
For example, hosts could expect premium features such as:
- Priority listing placements in search results
- Enhanced customer support with faster response times
- Access to premium marketing tools, like advanced analytics, targeted promotions, or professional photography services
- Reduced service fees or commissions on bookings for subscribers
And the guest can access benefits, such as,
- Discounts on service fees
- Early access to popular or new listings
- Special offers or promotions on accommodations in specific locations
- Enhanced customer service, with quicker support and assistance with bookings or cancellations
3. In-app Advertising
In-app advertising involves placing ads within a mobile app. However, it's crucial not to disrupt the user experience.
To maintain a smooth experience, stick to the ads that are relevant to your users. For example, travel insurance or car rental ads.
In-app advertising goes beyond just third-party ads. That can be featured listing placements.
This allows the hosts to promote their listings while you earn the fee for promoting them.
In a nutshell, in-app advertising uncovers new revenue opportunities while providing value to both advertisers and users.
4. Ancillary Services and Partnerships
Travelers need more than a place to stay. They may also look for convenience and experiences.
By partnering with third-party providers, you can offer extra services to your guests within your app, such as food delivery or local tours.
It’s a win-win situation for you and the users, while you create an additional revenue source for your business.
Some inspiration for you below,
- Transportation service – Collaborate with car rental business
- Private chefs – Offer guests the option to book personal chefs
- Mid-Stay Cleaning – Allow guests to book extra cleaning services during their stay.
- Laundry Services – Partner with laundry services to provide pickup and delivery options
Diversify your Revenue Channels
Relying on a single revenue stream can limit your growth potential.
Take companies like Airbnb and Uber—even they are constantly seeking ways to expand their revenue streams as they aim for profitability.
To steer your business in the same profitable direction, diversification is key.
By exploring multiple income sources, you can unlock new opportunities for growth and success.
