Right now, international travel isn’t exactly on the menu. In case you’ve been living under a rock, COVID-19 has ground air travel to a standstill.
However, the day will come when travelers once again head abroad. When they do, you’ll want to be ready to greet them. If you aren’t set up to accept foreign currencies, you will end up losing tonnes of potential profits.
So, let’s change that. In today’s blog post, we’ll share how to reorient your Airbnb business to accept foreigners better in the years ahead.
International Travel Had Never Been So Big
Before the Coronavirus turned everything upside down, international travel to America was near all-time highs. In 2018, a record of 79.62 million people visited the US from abroad. 5.4% of all international travelers in 2019 visited America. While here, they spent over $254 billion – more than triple the rate of those who visited Spain, our closest competitor.
Things were going well despite global economic headwinds, which caused 2019 arrivals to decline. But now, COVID-19 has put the entire tourism sector on pause. Except for bookings made by domestic travelers, Airbnb units will mostly lie empty this year.
That’s scary for those who were overextended. But for most, this is a chance to reflect on the impressive growth of the past few years. Those who orientate their business towards foreign customers will win big post-COVID.
Now, that’s an exciting thought to consider. But, before you start drawing up grand plans, start by plugging a few leaks first. Chief among them: foreign transaction fees.
Foreign Transaction Fees Are Bleeding Away Your Profits
Every time a traveler pays with something other than USD, the banks take a chunk of profits away. Let’s say, for instance, you are hosting a traveler from the United Kingdom. When they go to book your Airbnb suite, they use their Barclaycard to do so.
Every time a British traveler does this, their bank charges a fee of 2.99% each time. The more expensive your suite is, the heavier this charge weighs on the customer. As a result, they may choose a cheaper suite offered by a competitor.
Worse yet, your bank may charge a fee if your account receives payment in a currency other than USD. Some charge a percentage, while others opt for a flat fee. Either way, you’re likely giving up dozens of dollars in profits per booking.
To be clear: Airbnb isn’t charging these conversion fees – the banks are. Whether it’s your customer’s institution or yours, they help themselves every time a foreign transaction happens. To avoid charges on either end, you’ll want to explore various foreign currency accounts for a business. By setting up a multi-currency account, your customer can pay in their currency, thereby avoiding costly fees. Not only that, but you also get to convert currency at rates far better than what your bank currently offers.
Setting Up a Foreign Currency Business Account: A How-to
Opening a multi-currency account sounds like something Jason Bourne would do. However, there’s nothing mysterious about it – international businesspeople do this every day.
Want to do the same? First, do your due diligence. Jump on a review site like MoneyTransferComparison.com, and compare the options available to us Americans. Of the ones you’ll find, Moneycorp, OFX, and Transferwise all stand out. All three offer accounts that support dozens of major world currencies.
Once one of these sites sell you on their benefits, simply click “Register” to start the process. The creators of these platforms built them with usability in mind. Every step of the way, directions are usually clear. If you happen to hit a snag, customer support will help you get back on track.
However, there are a couple of things you can do to make your experience as smooth as possible. First, ensure you have a couple of pieces of government-issued photo ID at the ready. During the onboarding process, virtually all multi-currency account providers will require it. When asked to provide identification, take a clear photo of your ID, and upload it. Secondly, ensure you have your banking info available. To move money to/from your business account, you’ll need to supply your branch number, account number, routing number, and other details.
Making Your Airbnb Business More Appealing to Foreign Travelers
Now that you have that out of the way, relax – you just saved yourself a ton of money. However, your job isn’t done yet – there’s a lot more you can do to make your suite foreigner-friendly.
First, understand that your guests may speak languages other than English. Be sure to create a destination guide, as it will help visitors make the most of their stay. But, we advise going the extra mile by having it translated into common traveler languages. Don’t run it through Google Translate – have a professional do it for you.
Second, the world’s electric system is quite Balkanized. Voltages range from 110 volts in much of the Americas to 220 volts abroad. Even more maddening is the plug situation – globally, there are more than 15 different plug/socket combos. By offering plug adapters for the most common types (C for Europeans, G for Britons, I for Aussies/Kiwis/Chinese, etc.), you can make the lives of your visitors easier.
Lastly, be aware that guests may arrive at a late hour. For someone who hasn’t been to America before, the prospect of being out after dark may be frightening. As such, it’s a good idea to be around to greet them, rather than just leaving your suite’s key in the mailbox. That way, if they have trouble finding your place, you can guide them in.
The World Is Eager to Travel Again
The COVID crisis may have stopped travel, but it hasn’t extinguished the flame. This whole time, travelers have been dreaming up new itineraries while stuck at home. When they can take to the air again, they’ll do so in droves.
If you’ve adequately prepared, your Airbnb business will be positioned to take full advantage of the coming boom.
Thanks for this post. Very helpful!