How to Optimize Your Airbnb Pricing Strategy
Airbnb is a staple platform within the sharing economy that links vacation rental owners with eager potential guests. If you own a vacation rental business, it may be intimidating to set a pricing strategy in such an expansive and dynamic market. But have no fear; mapping out an effective and profitable pricing strategy is all about knowing your Airbnb property value and taking advantage of the features offered on the Airbnb platform. Here are some helpful tips on how to optimize your Airbnb pricing strategy to get the most out of your Airbnb listing.
Determine Your Market Value
The first step: know your market and how you measure up to competitors.
Before you determine the right prices for your Airbnb properties, you need to get an idea of the competition around you. This includes the prices of vacation rentals in your area, specifically the ones that are most like yours in size and location. You can utilize Airbnb’s property search feature to track the rental homes in your area. Make sure to compare your properties to other properties with legitimate reviews; you want to price your properties in relation to experienced hosts who charge at full market price, not beginner hosts who charge way below market price to attract their first guests (this will undervalue your place). You also want to review their calendars to see how successfully they are booking guests, determine their busiest times, and assess how their minimum stay rules affect their booking schedule. These are all factors to consider when sizing up the competition.
Your market value also depends on what your listing has to offer. You can optimize your listing by offering amenities, local flare, and 24/7 guest communication. Other factors to consider are a security deposit, cleaning fees, service fees, cancellation policy, and the number of (and quality of) reviews.
A common mistake first-time hosts and owners make is determining a rate and sticking with it, forever. You want your pricing strategy to be as dynamic as the rental market itself. Peak season comes and goes. Special occasions and events come up. Weekends are generally busier than weekdays. You want to stay on top of traveler trends in order to make sure your property value consistently matches the fluctuating level of demand. Automating your pricing strategy takes care of this for you. Allow guests to Instant Book your place without worrying that the price doesn’t match the current level of demand. Automated pricing services (like Wheelhouse, Beyond Pricing, and Keybee) detect changes in demand and adjust your prices to match the highs and lows. They also offer data-enabled insights around how to price your properties.
If you have more than one property, it might be a good idea to invest in property management services in order to keep tabs on all of your properties and prices in one place.
Know Airbnb Pricing Options
Airbnb offers certain pricing options. Determine which one will work best for you. Here are some of the most common and profitable options:
– Price Per Night: this pricing strategy is a simple way to charge your maximum price per night. This applies to both short-term and long-term rentals. It’s flexible and straightforward. You can sync all bookings into one calendar to manage price-per-night rental periods.
– Length of Stay: this is another popular pricing strategy. Airbnb hosts can set up the specific length of stay requirements that unlock discounts. These discounts will be automatically factored into the price at the check-out stage on the Airbnb site and app.
Know Your Rank
Your Airbnb ranking is how high in the search results you appear. Airbnb SEO tools take into consideration the number of key search words that appear in your Airbnb listing, as well as other factors like location and relevance. You can determine your rank by going into incognito mode and searching for your listing or Airbnb profile. Incognito mode helps you see what potential guests would see if they were to search on Airbnb or on other search engines. You want to increase Airbnb visibility by expertly following the tips listed so far: know your market and price your properties according to local trends. You don’t want your listing to be too far down in the search results. Guests don’t want to sift through pages and pages of rentals.
There are ways to aggregate your own data and track the keywords necessary for search engine optimization; for example, MyVR offers great data analytics to optimize your listing’s Airbnb ranking.
Charge Reasonable Extra Fees
Don’t shy away from charging extra fees. Nearly every Airbnb host charges standard extra fees, especially during peak travel months. Typical extra fees include a cleaning fee, service fee, and extra guest fee. Extra fees translate to added value for guests. For example, a cleaning fee indicates your home will be regularly taken care off; a security fee indicates your home is protected. Guests will often come to expect “hidden” fees at check-out, so don’t worry about scaring potential bookers away.
Make sure you charge reasonable extra fees that match the quality of service they cover. You don’t want to surprise your guests with disproportionate extra fees nor oversell the extra services you’re offering. When priced accurately, charging extra fees is a great way to boost your income per guest booking.
Offer Competitive Discounts & Promotions
Offering competitive discounts is a simple way to attract savvy travelers looking for the best value booking. Automated pricing tools allow Airbnb hosts to set up certain discounts for guests. You can set discounts for certain lengths of stay, times of the year, holidays, or for whenever you think you need to add a little extra flair to your listing. Discounts will automatically be factored in at check-out.
Another great way to advertise discounts or promotions is through social media. You can launch social media campaigns to offer giveaways or host competitions in order to increase social media engagement and attract more guests. The best thing about social media is the direct communication it offers. Social media platforms are a great place to flex your impressive response rate by getting in touch with people directly and in real-time.
Undercut the competition by offering special discounts and make your place a can’t-miss opportunity.
About the author: Emily Russo is a writer based in New York. She loves traveling, meeting new people, reading, and being outdoors. She hopes to travel to Italy 500,000 more times in her lifetime.