All of us have to admit that many Airbnb hosts draw blanks when it comes to proper pricing – It really is one of the most challenging aspects. Things like market demand and competitor behaviors are often overlooked and some hosts usually go with their gut feel for their prices.
That is why we came up with a list of pricing techniques that can fit any type of Airbnb host. To begin, It is important to do a bit of research and at least understand the basic information about competitor listings in your area, travel trends for both business and leisure trips and some guest preferences on amenities. A dipstick into these information buckets should be a good start for you to decide on your Airbnb listing price.
For Airbnb host newbies:
Don’t put up your price too early. You need to set your apartment’s price below the market price to capture initial bookings. You can’t directly compete with other long standing listings as they already have a full blown list of reviews to show guests – you’re gonna have to slowly build yours first.
Tip: this will allow you to better build your credibility rather than being rejected at first glance. Plus, you can kill competition with lower initial prices while offering great service .
Lower pricing is awesome bait for Airbnb guests!
Slowly increase your listing price
After you’ve collected a fair bit of reviews, this is your chance to increase your price. If you keep your price down for too long then you might already be missing out on profits
Keep note: if you enjoy very high occupancy for extended periods of time, it does not necessarily follow that you are maximizing earnings – people could be choosing you because of your low price (when they may be willing to pay more) so you’re technically… leaving money on the table…
Which brings me to my next point:
Do some research
Understand how other hosts with properties similar to yours (size, number of bedrooms, style, amenities, etc.) and in relatively the same area are pricing their properties
Tip: take note of how the longer-standing properties (with a long list of reviews already, probably more than 10) and newly listed ones (no reviews yet or only a couple) are priced – established hosts will most likely be charging full market price
Do some more research
We’re serious here. It takes time and effort to effectively learn how to price your Airbnb property and know it’s true worth (based on how the market is reacting to it)
As you learn about the similar properties around you, you learn about your direct competitors. Very important to know who you are up against.
Likewise, also do some research about some of the best or most loved properties on Airbnb and see what effectively awesome things they are doing that wow their guests. Follow those.
Tip: Learn what the guests love and they will love you back.
Here’s a neat hint:
If you are the type of host to offer a little something extra to your guests, then do not be ashamed to charge higher for that. Some Airbnb hosts do that to add value to their service and often, guests will love these extra touches.
Timing is essential
You must always keep note of seasonalities, dips and highs in travel trends for tourists, even weekday and weekend prices should differ!
Weekdays VS Weekends:
There is a reason why hotel prices go up during the weekends, and why they tend to skyrocket during LONG weekends – it’s because that’s when people get out and travel. Simply put, demand increases during weekends.
Tip: if you are keeping to the same price for weekdays and weekends, then we don’t think you’re really doing it right.
Know what’s on
It is also important to know what big events are happening in your city that would be likely to draw a big [international] crowd – either for leisure or business (e.g. leisure events like concerts, musicals, local festivities, worldwide happenings like F1, the Olympics; or business events like conferences, seminars or exhibitions and the like)
We know, we know…
It’s a tough climb to setting that perfect price for your Airbnb property. It really requires a lot of time and effort – every established (and well performing) Airbnb host should have undergone this process.
There are Airbnb and property management service companies, like GuestReady that will take the hassle and stress out of your host duties and help you earn with no trouble at all. Take a read and see how they can help you with your numbers.