A clever pricing strategy is a key ingredient in your journey to a profitable Airbnb business. It is vital to keep your rates per night competitive, yet appealing to customers. Pricing your vacation rental too high may avert potential clients, as surely as a too low quote will not let you get the most value from your listing.
The price is the first thing to catch the eye of a prospect, influencing their decision to click on the listing or to scroll the results down. An ideal pricing strategy will guarantee a continuous flux of bookings, otherwise, the number of deals will be scanty.
What Is The Best Airbnb Pricing Strategy?
Airbnb pricing has a strong impact on your reviews and ranking, too. If your tenants discover that you have some hidden costs that are not mentioned in your offering on the Airbnb website, they will leave you a negative review, badly affecting your Airbnb reputation and deterring potential consumers.
So, before you plunge into that business, you need to carefully plan your Airbnb pricing strategy, considering all the factors that may kick in when you decide on your final rates. Here are a couple of nifty tips that will help you develop a result-driving Airbnb pricing strategy.
Top 6 Tips To Find A Great Airbnb Pricing Strategy:
1.) Think From Your Guest’s Perspective:
Rental price is one of the main factors the travelers take into account when planning their trip. No matter how beautiful and comfy your property is, you may miss out on bookings if your direct competitors set lower rates.
It is also important to remember that the price you set will eventually be different from the final price the people will pay. This is so because Airbnb charges a commission for their guest-host matching services.
To design an optimal Airbnb pricing strategy, take into account the fee your tenants will have to pay to the platform, as well as your own expenses that you will inevitably incur (such as cleaning and repair services, buying new supplies, paying premiums for insurance, local income taxes, etc.)
2.) Explore The Market:
Find similar Airbnb accommodations in your area. Specify the following in the search parameters:
- Type of housing (single room, entire housing, etc.);
- Number of beds/bedrooms;
- How many guests can you accommodate;
- Available amenities.
As a rule, listings with attractive rates appear on the first page of Airbnb search results and, consequently, they are likely to receive more bookings. Investigate your rivals’ proposals, check which dates are already booked and which are not. The accommodation that is not booked or booked for such a few nights is, probably, very expensive. Also, pay attention to how hosts in your area change their prices at different times of the year, weekends, and holidays.
3.) Mind The Rental’s Location And Comforts:
The features that you take into account when setting the Airbnb price may not be obvious to guests. For example, travelers who do not know the city might want to know how safe and beautiful your neighborhood is. Breakfast or a welcome basket with treats can also increase the price of a rental, but such details must be included in the listing and shown in the photo.
An integral part of a witty Airbnb price strategy is to offer your guests little perks, still, without boosting the overall price of your listing. For instance, you can offer them free tea/coffee, access to a gym or a swimming pool, discount cards for local markets, and that kind of thing. By doing so, you will lure prospects to book exactly your home as they will believe that they will get more bang for their buck if they pick you, not your competitor who sets the same rate but fails to offer any bonuses.
4.) Do Not Be Greedy:
Your rental might be exceedingly lovely and ultimately secure, so you may want to price it accordingly. Still, if you are just beginning to list your property on Airbnb, overpricing may do a bad trick on your occupancy rate. In the early days of your short-stay rental business, try to keep your rates highly affordable. People fear to book vacation rentals without reviews. If you are a novice entrepreneur, a great way to attract guests is to lower your price per night. As soon as there are a dozen of glowing reviews, raise the price according to the demand in the locality. Competitive pricing will also help make your proposal shine in search results.
5.) Opt For Smart Pricing:
If you want to stay wise with your Airbnb price strategy, you may activate the “Smart Price” feature offered by the platform itself. This tool utilizes over 70 parameters and limitations you establish to advise the best price for each vacant date on your calendar. Prices are updated automatically based on different factors, including the market situation in your area, the seasonality, upcoming events and festivals, the popularity of your listing, reviews, and more. If the proposed tariff does not suit you, you can easily define it manually in your listing’s setting.
6.) How To Never Go Wrong With Airbnb Pricing:
Landlords who want to reap the most benefits from their vacation rental properties, yet without compromising the guest experience, invest in professional Airbnb management software that, apart from everything else, offers efficient price automation tools.
The software analyzes the performance of your rental, as well as the trends in your neighborhood, to automatically generate accurate and lucrative price suggestions for your business. The leading software in this category is Hosty that comes with an AI-powered price automation feature to determine the best rate for your rental with all the peculiarities considered. Read more on https://www.hostyapp.com/airbnb-automation/.
With such a powerful solution like Hosty, you are bound to receive maximum profits and improve occupancy rates for all of your Airbnb listings. You can define custom price rules, for instance, you can set higher/lower rates for particular days, include discounts for longer bookings, or even exclude certain dates from your availability calendar. Hosty will thoroughly scan your listing and market movements and come up with the most beneficial price strategy possible in the given situation. Therefore, you will always stay on top of your prices, neither undervaluing nor overpricing your offering.
When you are framing your optimal Airbnb price strategy, it is important to realize that you set prices not only for your property, but the service and experience you deliver. You want to get the real value of your rental, but in order to find it, you will have to do some homework. You will need to research the market, analyze your competitors’ strengths and weaknesses, and understand the goals of your target audience to elaborate on an adequate pricing tactic.
But you can avoid these time and effort investments if you commit to sophisticated Airbnb management software that always includes a cutting-edge Auto Pricing module to do the entire work for you. From the market environment to the nearest competitors, systems like Hosty analyze this all and give you relevant price recommendations to make your business thrive.