Breaking Down Profitability by Median Revenue

Median revenue from NYC AirBnB’s is $57.90 per night. Revenue skews low with many low revenue listings.

Comparing Profitability to Price Per Night

Price per night seems to be somewhat important.

Looking at Average Revenue by Neighborhood

There are a few hot spots where average revenue is very high, while the rest of the city has low revenue listings.

Profitability Ratio

After breaking down profitability by neighborhood, we want to see how many listings are profitable in each neighborhood. (Using each of the neighborhood’s average revenue.)

This paints a different picture from before. Neighborhoods in have higher overall average revenue, but only a few of those listings are profitable per neighborhood.

Identify Important Variables

In order to, as an investor, decide where to invest and either create a listing or improve an existing one, I want to understand which features are important. I will use a decision tree: 

##                       price                   occupancy 
##                 27986051.06                 23689265.93 
##                neighborhood                accommodates 
##                  7416795.01                  6184157.88 
##                   room_type                    bedrooms 
##                  5514525.75                  4188340.68 
##                        beds          host_response_rate 
##                  3591480.05                  1061904.63 
##                   bathrooms                   longitude 
##                   599566.26                   514768.33 
##           reviews_per_month              minimum_nights 
##                   454425.88                   317738.36 
##                  host_since              maximum_nights 
##                   112384.66                    64776.29 
##                    latitude        review_scores_rating 
##                    43966.88                    34670.49 
## review_scores_communication   review_scores_cleanliness 
##                    28366.77                    26790.84

Opportunities to Invest

Some listings can be improved based on the changeable factors in the importance hierarchy generated by the decision tree. We can plot those locations to see what neighborhoods they belong to:

There are certainly a few places in the city where there is a high chance to have a profitable listing, but it would require some work on some of the modifiable characteristics of the listing such as price, minimum nights, and reviews for cleanliness and host communication. As an existing host I would take this into consideration and make the appropriate adjustments. As an investor I would see these as long-term fixer-upper projects.