Effective Airbnb pricing strategy
Even if your property is not located in a hot tourist destination, you can always earn good money with Airbnb, provided you know how to effectively manage your listings. One of the proven ways to keep paying guests coming and leaving excellent reviews is setting the right price for your short-term vacation rental property on Airbnb. And it is never guesswork.
Like in any other business, Airbnb pricing is subject to numerous factors. You should always pay significant attention to the current market conditions to charge an adequate cost for your service and, still, benefit. If you are just getting your feet wet in the rental property niche and do not clearly understand which quotation will make or break your business, these tips will help you develop a successful Airbnb pricing strategy.
Put yourself in your client’s shoes
Price is one of the main factors that guests consider when scrolling offers on Airbnb. No matter how beautiful your accommodation, if its cost is remarkably higher than similar options nearby, the chances are that prospective clients will prefer your competitors. Remember that the price that you set will eventually be different from the final price that your guest will pay. When thinking over the best price for your vacation rental property, do not forget about the fee that the platform will deduct from guests for every completed booking.
Besides that, a smart price policy on Airbnb is the one that covers all the associated expenses that the host will incur. These may include a security deposit, paying an income tax, outsourcing professional cleaners, getting host protection insurance, or obtaining advanced rental management software to automate critical business processes on Airbnb.
Master the market
Know your rivals and exceed them! You should carefully explore the short-stay vacation rental market in your area and draw a comparison between you and your main competitors. You may conduct such research directly via the Airbnb platform. Open the search page on Airbnb and find the listings in your area that present direct competition to your bid. Study the types of accommodation, the number of beds/bedrooms, home comforts, availability, etc. Pay attention to how the rivals modify prices during different seasons/days of the week/important events.
When you know the average value of your service, you can determine your own price depending on the overall condition of your property, the demand, and the perks that you can offer to your guests.
Treasure your property
If after analyzing the market you conclude that your accommodation is better and boasts a more advantageous location than mediocre competitors, you can safely charge a higher price for such a glorious property. Even if this translates into fewer bookings, you will still enjoy a good profit. Plus, fewer guests will bring much fewer issues, which will allow you to save on cleanings and repairs in a long run.
Know who really sets the trends
Your property may be infinitely lovely and stuffed with all modern comforts, but, after all, the ultimate price is always set by the market, not you. Airbnb pricing is fluctuating and reflects the current market situation. To ensure your listings are appealing and competitive, it is wise to establish different tariffs for weekdays, weekends, and holidays, or jack up nightly rates for major conferences and events. Your course of action can also provide discounts on longer stays or special offers during the low season.
Stir curiosity in your guests
If you are just starting to lease out your accommodation on Airbnb, set an attractive price. People are hesitant to book just-added properties without reviews. If you are a novice Airbnb entrepreneur, the best way to lure new customers is to decrease your rates per night. As soon as there are positive reviews, you can raise the cost according to the demand in your locality. Affordable pricing makes your listing more noticeable in search results since Airbnb emphasizes the best deals in the area with a bright badge.
To boost their managerial efficiency, many hosts integrate their Airbnb listings with sophisticated vacation rental management software (e.g. https://www.hostyapp.com/airbnb-automation). Such solutions come with extensive functionality including an auto-pricing feature. Based on the pre-determined parameters and limitations, an auto-pricing tool suggests the most optimal price for each free date on your booking calendar. Prices are changed automatically depending on the following factors:
- Property condition: the initial price is set based on what the property has to offer: available rooms, number of beds, facilities, extra services, and so forth;
- Market climate: the price is suggested based on the today’s market situation in the particular area: the overall security of the neighborhood, the demand rate, nearby attractions, the infrastructure development, and other parameters;
- Seasonality: the price is alternated during the highest/lowest seasons in the area;
- Popularity: the price is updated depending on the number of views and bookings;
- Review history: the price is altered when you receive new positive or negative reviews.
Surely, if you do not like automatic pricing, you can set your nightly rates manually according to your own considerations. But with auto-pricing, you have peace of mind that your vacation rental property fulfills its potential and is never underestimated.