Setting the price for your Airbnb can either make you very rich or prevent customers from booking at all. Finding the right price can be difficult not just for newbies but for experienced holiday-let landlords too – so don’t worry, there are a few things to consider before assigning a value.
As your experienced rental managers, it’s our job to clarify the expenses you will likely encounter and mitigate these by setting the correct prices at different periods to maximise your revenue.
Maximising your income potential as an Airbnb host is easy if you constantly change the property’s rental rates to hit the sweet spot where demand meets availability.
However, keeping track of this alone can be unreliable and unpredictable due to the volatile nature of the rental market. Prices can fall at any time. As such, you might miss out on income opportunities and be one step behind your competitors every time. Read case studies.
At HelloGuest, we use intelligent and dynamic pricing tools that automate this process, predict prices better and increase conversions.
Dynamic, smart pricing tools allow us to monitor the entire market’s activity and use real-time, hyperlocal data to automate and adjust your rates. By doing this, our clients get booked at the best prices and times.
So, if, for example, your competitors lower their rates on a certain day, we’ll also adjust your rates accordingly.
In cases with increased demand and more availability, perhaps due to a popular event in your area, we’ll automatically increase your rate to leverage the increase in demand.
Maximising your price with HelloGuest is easier!
Before examining and adopting different pricing strategies, you must answer critical questions to help you make the best financial decisions for your Airbnb business.
How you answer the below questions will help you identify how to set the price of your listing to attract higher-value guests:
Whether your business lists an entire property like a bungalow or mansion, or a shared room in an apartment, it’s essential to consider the type of property you’ll be promoting when framing your pricing strategy.
For example, if you’re listing a luxurious property, you could quite easily opt for a maximum night rate pricing strategy. Strategies like this work best for this kind of property because it offers more to potential guests, so they’ll be willing to pay more.
Remember, your guests pay you in exchange for the services that you provide within your space. Therefore, installing particular amenities in the property could increase the rate and number of bookings.
Properties offering few amenities would be unwise to demand high rentals. However, suppose your property has luxurious amenities like swimming pools, hot tubs, gyms or even a spa; it will undoubtedly attract more customers and, in turn, profits (even when charging higher-than-average rates).
In our experience, deciding on pricing strategies without understanding your target and potential guests is unwise.
For example, if you’re targeting happy-go-lucky travellers on a budget, then, surely using the maximum night rate strategy is the wrong choice for business.
With that being said, this strategy would be more suitable and increase profits, if, say, for example, your target audience were tourists or families on vacation.
It’s a fact that every Airbnb guest will consider and compare prices and reviews of various competitors serving one area before pursuing a booking.
So, in this case, you must remember that your potential guest is also the potential guest of your competitor. Fewer competitors can allow for a maximum night rate strategy to achieve more profits.
For example, if your annual goal is to increase your occupancy rate, then we’d say a maximum fill rate strategy is your best option, as setting your nightly charges below average would attract more guests.
However, by applying strategies this way, you’ll rely on the lazy man’s way to riches. Adopting multiple strategies at different times is the best way to maximise your income.
Setting the right price for your Airbnb is more beneficial when considering annual business profits rather than occupancy numbers.
Toby’s main role is managing clients with large buy-to-let portfolios, ensuring they hit KPIs and maximise their monthly turnover.
Being a natural extrovert and a go-getter, Veronica is a great communicator and is the face of HelloGuest.