Profitability: Airbnb vs. Long-Term Rentals in Vanuatu

Published on October 4, 2025 and written by Cyril Jarnias

In the current real estate context, many property owners are questioning the profitability of their assets in Vanuatu, torn between the lucrative appeal of Airbnb and the stability of long-term rentals. This article explores the delicate balance between these two options, offering a detailed city-by-city analysis to determine which presents the best income potential.

While popular cities can offer varying returns depending on the season, it’s crucial to examine concrete figures and local trends. We’ll dive into current data to determine where the most advantageous opportunity truly lies for investors seeking to maximize their profitability in this enchanting island nation.

Comparison of Returns Between Airbnb and Long-Term Rentals in Vanuatu

Vanuatu City	Average Monthly Airbnb Revenue*	Airbnb Occupancy Rate (%)	Average Price Per Night (USD)	Monthly Long-Term Rental Revenue*	Airbnb Management Costs (%)	Long-Term Rental Management Costs (%)
Port-Vila	~1,100	40–55	60–80	~700	20–25	8–12
Luganville	~900	35–50	50–70	~600	20–25	8–12

*Estimates based on regional comparisons and similar profiles in the Pacific Ocean.

Key Differences Influencing Profitability:

Generated Revenue

Short-term rentals (Airbnb) offer higher return potential, particularly during peak tourist season when the price per night can double or triple. However, this profitability is strongly tied to occupancy rates, which drop during off-peak periods, affecting overall annual income.

Occupancy Rates and Seasonality

Tourist demand in Vanuatu is highly seasonal: June to September shows the best occupancy rates (>70%), while the low season sometimes sees these figures drop below 30%. Many owners then switch to medium or long-term rentals to stabilize their cash flow.

Associated Costs

Airbnb management involves higher fees (frequent cleaning, increased maintenance, platform commissions), often representing up to a quarter of gross revenue. Conversely, long-term rentals stand out for their reduced costs and stability: less tenant turnover and simplified management.

Local Regulations

Vanuatu doesn’t strictly regulate short-term rentals, but some municipalities are already considering special permits to address rental imbalances in city centers. Applicable taxation remains moderate but subject to change due to the growing influence of international tourism.

Local Testimonials

“We achieve our best months with Airbnb during the Australian winter; off-season we switch to six-month leases to guarantee stable income,” explains Sophie M., property owner in Port-Vila.

“The expenses are much heavier with Airbnb – cleaning between each guest and commissions – but the extra income largely compensates if you optimize your calendar,” adds Etienne L., local investor.

“For those who don’t live on-site or don’t want to deal with constant turnover, long-term rentals remain preferable despite lower returns,” analyzes Julie R., independent real estate agent.

Recent Vanuatu Real Estate Market Statistics:

• Average annual price increase: +3% over two years
• Growing share of furnished tourist rentals (+18% over twelve months)
• Increase in properties listed on platforms like Airbnb (+24% between January 2024 and March 2025)

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Investors must therefore choose between:

• Potentially higher profitability through Airbnb but subject to local tourism fluctuations,
• Secure income with less effort through long-term rentals,

while considering their capacity/willingness to actively manage their property and possible regulatory changes.

Data Analysis for Decision Making

City	Monthly Airbnb Revenue (Median)	Airbnb Occupancy Rate	ADR (Average Daily Rate)	Monthly Long-Term Rental Revenue*	Airbnb Peak Season	Airbnb Low Season
Port Vila	$1,220	29%	$253	~$750–900	September	February
Mele	$2,088	27%	$268	~$800–950	August	December

*Estimate based on current local market.

Key Statistics:

• The best-managed properties in Port Vila exceed $5,094 per month in short-term rentals, while most hover around the median ($1,220).
• In Mele, the top of the market exceeds $23,643, but the median remains around $2,088.
• Occupancy rates remain moderate (between 27 and 29%) despite seasonal tourist influx.
• Long-term rental income is stable but capped, with little seasonal fluctuation.

List of Main Factors Influencing Profitability:

• Strong Tourist Seasonality: maximum revenue between August and September depending on the city; low revenue during Australian summer or off-peak tourist season.
• Specific Events: cultural festivals, sports competitions, or international conferences can temporarily boost occupancy and nightly rates in certain locations.
• Dynamic Pricing Management: regularly adjusting prices helps offset off-season drops and optimize demand peaks.

Economic Advantages – Airbnb:

• Potentially two to three times higher revenue during peak season compared to equivalent traditional rentals.
• Flexibility to quickly adjust prices and availability to local tourism market variations.

Economic Disadvantages – Airbnb:

• Strong dependence on international tourism, leading to increased volatility during health or geopolitical crises.
• Additional costs related to frequent tenant turnover (cleaning, increased maintenance).

Economic Advantages – Long-Term Rentals:

• Stable income year-round with low vacancy rates.
• Simplified management; less exposed to variable costs related to regular client changes.

Economic Disadvantages – Long-Term Rentals:

• Capped returns despite recent real estate price increases (+9.5% average over one year).

Practical Recommendations for Real Estate Investors in Vanuatu:

To maximize their returns in a context marked by strong tourist seasonality, owners with attractive, well-located properties are advised to use short-term rentals via Airbnb during peak periods and potentially switch to medium/long-term rentals during low seasons.

For those seeking security and administrative/tax simplicity – or whose property is located outside major tourist areas – opting for traditional leases remains wise.

In summary: Short-term rentals via platforms like Airbnb offer significantly higher potential in dynamic tourist areas like Port Vila or Mele, provided there’s active management. However, stability remains the main advantage of traditional leases in this same market where volatility sometimes rhymes with high profitability… but also increased risk.

Impact of Rental Contracts on Profitability

In Vanuatu’s main cities, such as Port Vila (Shefa) and Luganville (Sanma), the profitability of short-term rental contracts, like those offered via Airbnb, differs significantly from long-term rental contracts. This difference is explained by various factors: occupancy rates, average revenues, associated costs, and seasonal or regulatory fluctuations.

City	Short-Term Rental (Airbnb)	Long-Term Rental
Port Vila	Median Monthly Revenue: $1,220 Average ADR: $253 Average Occupancy: 29% Strong Seasonality (peak in September)	Approximately $700–900 / month* Fixed Monthly Rent Generally Stable Occupancy Rate Less Exposure to Seasons
Luganville	Average Monthly Revenue: $451.90 Average ADR: $123.46 Average Occupancy: 21.4%	Approximately $350–500 / month* Fixed Monthly Rent Generally Stable Occupancy Rate

*Estimate based on local market; precise data not widely disseminated.

Factors Influencing Profitability

• Short-term rentals offer higher income potential when occupancy rates are optimal or during peak periods. However:
  • They require active management (frequent check-ins/outs)
  • Maintenance costs are higher due to rental turnover
  • Platform fees and taxes apply
• Long-term rentals ensure income stability with less vacancy and reduced administrative fees.
• Specifically in Port Vila:
  • The top 10% of properties generate over $5,094/month thanks to premium positioning or professional management.
  • The median remains well above what traditional rentals typically offer.
• In Luganville:
  • The market is less dynamic but remains attractive for STR investment due to weak local regulation.

Seasonality

• Airbnb revenues vary strongly according to tourist seasons:
  • Peak in September
  • Trough noted in February
  • This requires owners to adapt their prices and marketing strategy to maximize ADR during low periods

Regulation

Regulation surrounding short-term rentals remains relatively flexible in Vanuatu’s main cities. This flexibility continues to favor the expansion of the Airbnb model.

Potential tightening could nevertheless impact future returns.

Key Takeaway:

Short-term rentals maximize profitability during tourist peaks but require increased operational investment. They also present increased volatility linked to seasonal demand.

Long-term rentals offer financial security with less daily effort but often cap annual returns.

In summary:

• In Port Vila: STR highly profitable if well managed; advantages accentuated during high tourist influx.
• In Luganville: Moderate profitability on Airbnb compared to the capital but favorable regulatory environment for starting in this sector.

An owner must therefore choose their strategy based on their risk/operational appetite and their direct versus long-term financial objectives.

Case Study: Focus on Vanuatu

Comparison of Airbnb and Long-Term Rental Options in Vanuatu’s Main Cities

City	Option	Average Monthly Rent (USD)	Occupancy Rate (%)	Peak Season	Low Season
Port-Vila	Airbnb (Top 10%)	5,094+	~29	September	February
Port-Vila	Airbnb (Median)	1,220	~29	September	February
Port-Vila	Long-Term	600-900	>95	Stable	Stable
Luganville	Airbnb	~700-1,100	Estimated: 90	Stable	Stable

Vanuatu-Specific Factors Influencing Profitability:

• Tourism: Demand for short-term rentals heavily depends on tourist flow, which is marked by strong seasonality. September often corresponds to peak attendance, while February records the lowest occupancy levels. Airbnb revenues can therefore vary strongly depending on the period.
• Local Regulation: To date, legislation concerning short-term rentals in Vanuatu remains relatively flexible and not very restrictive for owners, which favors Airbnb-type rental investment.
• Local Owner Preferences: Many still prioritize the security of stable rental income through long-term leases over the uncertainty linked to seasonal variations and increased management of short stays.

Concrete Examples of Financial Performance

Port-Vila

Airbnb:

• High-end properties generate over $5,094/month with an average occupancy rate around 29%.
• Typical properties earn about $1,220/month; the median income is significantly higher than that obtained through traditional long-term rentals but requires active involvement in management.

Long-Term Rental:

• A standard apartment rents between $600 and $900/month with high occupancy (>95%), offering stability but lower annual returns.

Luganville

Airbnb:

• Estimated revenues between $700 and $1,100/month for well-located or unique properties; however the market is less developed than in Port Vila, with fewer international tourists outside peak season.

Long-Term Rental:

• Rents generally between $400 and $700/month depending on location and standard.

Recent Trends

• Strong growth in Airbnb listings in Port Vila since late 2023, stimulated by the gradual return of international tourism post-pandemic.
• Gradual emergence in some peripheral or secondary tourist neighborhoods like Teouma or Montmartre due to their proximity to beaches or attractive natural sites.
• Persistent stability for the traditional residential rental market despite some temporary tensions related to temporary arrivals (NGOs, diplomats).

Advantages & Disadvantages for Potential Owners

Short-Term Rental/Airbnb Advantages

• Potentially superior profitability during tourist peaks
• Flexibility regarding future use of the property
• Few/no regulatory constraints currently

Disadvantages

• Time-consuming daily management: cleaning/welcome/maintenance/bookings
• Highly variable income depending on the season
• Dependence on the global tourism sector

Long-Term Rental Advantages

• Financial security through stable leases
• Less need for regular intervention

Disadvantages

• Generally lower overall annual returns
• Less flexibility if personal desire to occupy the dwelling

The current dynamic still favors Airbnb in Port Vila during strong tourist periods – but this option requires increasing professionalization in the face of growing competition. In other cities or rural areas where tourist activity remains limited outside peak season, traditional rentals often remain preferable to guarantee income stability.