Is Airbnb Worth It in Cairns? Real Returns From Our Own Property Portfolio
Airbnb investing in Cairns can be incredibly rewarding, but there's a big difference between generating impressive booking revenue and owning a genuinely profitable investment property.
Over the past 12 months, our personal portfolio of four Airbnb properties in Cairns has generated approximately $285,000 in bookings.
But not every property has delivered the same financial outcome.
One of our apartments generated approximately $71,000 in annual bookings, while another generated $91,000. Both are located in Cairns, both operate as short-term rentals, and yet their potential financial returns compared with traditional long-term renting are remarkably different.
At Pebble Stays, our Cairns-based Airbnb management business, we believe understanding these differences is essential to making informed decisions about short-term accommodation.
Here are five things every property owner should understand about Airbnb investing in Cairns.
1. Airbnb Revenue Is Not the Same as Profit
One of the most common mistakes property owners make is focusing exclusively on gross booking revenue.
Consider our one-bedroom apartment in Cairns City, directly opposite the Cairns Esplanade Lagoon.
We estimate the property is currently worth approximately $550,000.
Over the past 12 months, it achieved:
Gross annual bookings: $91,000
Occupancy: 90%
Income after short-term rental operating expenses: Approximately $60,000
Income after allowing for professional Airbnb management: Approximately $49,000
That $49,000 is not the property's final profit.
There are still additional ownership expenses to consider, including body corporate levies, council rates, insurance, maintenance and replacing furniture over time.
However, when we compare this with traditional long-term renting, the numbers become interesting.
We estimate the same apartment could generate approximately $34,000 annually in long-term rental income, or around $30,000 after allowing for traditional property management fees.
That's an approximate $19,000 annual income advantage for short-term accommodation, based on the expenses included in this comparison.
The actual net advantage depends on the remaining ownership costs associated with each rental strategy.
For a property owner, understanding these figures is far more important than simply achieving an impressive nightly rate.
2. Location Can Make or Break an Airbnb Investment
Location is important in all forms of property investing, but it's particularly significant for holiday accommodation.
Our own Cairns investment portfolio demonstrates why.
Despite having fewer bedrooms, the Cairns City apartment generated approximately $20,000 more in annual bookings.
We believe location is a major reason for that difference.
The Cairns City property is directly opposite the Esplanade Lagoon, within walking distance of restaurants, cafés, the waterfront and tourist attractions.
For visitors coming to Cairns to experience the Great Barrier Reef and Tropical North Queensland, that convenience is particularly attractive.
But location doesn't always mean being in the CBD.
In destinations such as Palm Cove and Cairns' Northern Beaches, properties with exceptional facilities, private pools, coastal positioning or beautiful outdoor entertaining areas can also provide compelling holiday experiences.
The question every property owner should ask is:
Why would a guest choose my property over the other accommodation available in Cairns?
If the answer isn't obvious, it may be difficult to achieve premium nightly rates consistently.
3. High Occupancy Doesn't Always Mean Higher Revenue
This is one of the most misunderstood aspects of Airbnb management.
Many property owners assume that achieving 90% or 95% occupancy automatically means their property is performing exceptionally well.
But occupancy only tells part of the story.
Consider two hypothetical properties:
Despite being occupied less frequently, Property B generates approximately $8,200 more annually.
It may also experience less wear and tear or fewer guest changeovers, depending on booking patterns.
The objective of professional Airbnb management shouldn't simply be to fill every available night. It should be to optimise revenue while controlling expenses.
Why Airbnb pricing in Cairns needs a seasonal strategy
Cairns has distinct seasonal patterns influenced by tourism, interstate school holidays, winter visitors, events and weather.
At Pebble Stays, our pricing philosophy is straightforward.
During quieter periods, we aim to position properties competitively to secure bookings early.
During periods of stronger demand, we want to avoid filling the calendar too far in advance at unnecessarily low nightly rates.
This requires continually reviewing competing accommodation, booking lead times, demand and available inventory.
A fixed nightly rate throughout the year can mean missed revenue opportunities.
4. Property Presentation and Facilities Matter
Airbnb guests make their accommodation decisions online.
Before they experience your property, they've already formed an opinion based on photographs, amenities, reviews and presentation.
This makes professional photography, furnishings and guest experience extremely important.
In Cairns and Palm Cove, facilities such as swimming pools, outdoor entertaining areas, comfortable air-conditioning and well-appointed interiors can significantly influence a property's appeal.
But providing an exceptional guest experience doesn't necessarily require luxury furnishings.
It requires understanding the target audience.
A family-friendly holiday apartment should be equipped for comfortable family stays.
A premium Palm Cove holiday home should deliver the experience guests expect from a premium tropical destination.
When preparing a property for short-term accommodation, consider:
Quality furniture, comfortable bedding and attractive styling.
Professional photography that accurately showcases the property.
Functional kitchens and well-equipped living spaces.
Reliable air-conditioning and practical amenities.
Outdoor spaces and recreational facilities.
The total cost of furnishing, maintaining and periodically refreshing the property.
Remember, these costs should be considered before deciding whether Airbnb is the most appropriate rental strategy.
5. Professional Airbnb Management Can Influence Financial Performance
Short-term accommodation is often described as passive income.
In practice, managing a successful Airbnb is much closer to operating a hospitality business.
There are guest enquiries, bookings, cleaning schedules, maintenance, pricing decisions, reviews and ongoing property presentation to manage.
A successful Airbnb requires consistent attention.
At Pebble Stays, our approach to Airbnb management in Cairns and Palm Cove focuses on the key factors that influence property performance, including guest experience, dynamic pricing, presentation and day-to-day operations.
Comparing Two Cairns Airbnb Investments
Let's return to our actual property figures.
Our Manoora apartment generated approximately $71,000 in annual bookings.
After the short-term rental operating expenses included in our analysis, this reduces to approximately $42,000 before professional management fees, or around $30,000 after management.
We estimate a comparable long-term rental arrangement could generate approximately $26,000 annually after traditional property management fees.
That's only a $4,000 difference before accounting for other relevant ownership expenses.
Now compare our Cairns City apartment.
After operating expenses and allowing for professional Airbnb management, it generates approximately $49,000 before other ownership expenses.
That's approximately $19,000 more than its estimated long-term rental income after management fees, on the same comparison basis.
These are two very different outcomes.
And they demonstrate why not every property should automatically become an Airbnb.
Is Airbnb or Long-Term Renting Better in Cairns?
There's no universal answer.
Traditional long-term rental properties can offer more predictable rental income and a simpler management structure.
Short-term accommodation can potentially generate higher income, but usually involves greater operating complexity, additional expenses and exposure to fluctuations in tourism demand.
The right decision depends on the property's location, facilities, ownership costs, target market and realistic earning potential.
For some owners, Airbnb may be the clear choice.
For others, traditional renting may deliver a better risk-adjusted outcome.
The important thing is making that decision using realistic financial projections rather than headline booking figures.
Looking for Airbnb Management in Cairns or Palm Cove?
At Pebble Stays, we specialise in short-term rental and Airbnb management across Cairns and Palm Cove.
Our approach is built on firsthand property investment experience, an understanding of the local tourism market and a commitment to providing excellent guest experiences.
Whether you're considering converting an existing investment property into holiday accommodation or looking for a professional manager for your current Airbnb, understanding your property's realistic earning potential is the starting point.
Discover professional Airbnb management in Cairns and Palm Cove at www.pebblestays.com.au.
And if you're considering purchasing an investment property specifically for short-term accommodation, our related business, The Buyers Co, can assist with property sourcing, investment assessment and purchasing across North Queensland.
The figures in this article are based on our personal investment portfolio and estimates. They are illustrative, do not represent guaranteed performance and may not reflect the returns achievable by other property owners.
