Setting The Right Price At The Right Time
Let’s face it: without a good pricing strategy, your short-let holiday rental will never truly be a success online. This is because pricing strategies in this market are integral to the Airbnb business model.
HelloGuest was awarded "Hosting Excellence" by Airbnb at the annual Northern Europe Professional Host Summit in 2024
Getting it right from day 1
Types Of Successful Airbnb & Short-Let Pricing Strategies
We know many newbie Airbnb hosts might struggle to balance between pricing functions: underselling and overselling. The host is not always to blame when they don’t get this right – getting your Airbnb pricing strategy the first time can be difficult, and that’s where a professional property management company like us comes in. We’ll break down how to make money from your rentals and how to find the sweet spot when it comes to pricing your property for the night.
Defining Your Strategy
What to charge
Your holiday rental price must effectively define the maximum value of your listing – not only this – but it must also be appealing enough to attract the right kind of guest and customer.
In an ideal world, your pricing strategy will not undersell or oversell your property listing. For example, underpriced rates will lower the value of your listing, whereas overpriced rates often mean hosts lose out on potential guests.
Read on through our guide that helps hundreds of our hosts nail their Airbnb pricing strategy (and often on the first attempt).
Meet Arianna Piacentini
pricing & revenue manager
I help property owners maximise the performance of their short-term rental investments through strategic pricing, market analysis, and revenue optimisation.
My day-to-day role involves monitoring booking trends, analysing market demand, optimising listings, and adjusting pricing strategies to ensure our properties remain competitive while achieving the best possible results.
I enjoy the fast-paced nature of the industry and the challenge of adapting strategies to changing market conditions. I work closely with property owners to provide clear advice, regular updates, and tailored recommendations, helping them make informed decisions and get the most from their investment.
My goal is to make revenue management straightforward and transparent, giving clients confidence that their property is performing at its full potential.
Types Of Pricing Strategies
- Maximum Fill Rate Strategy: Most applicable when the business goal is to maximise occupancy rates. Typically, this strategy involves reducing your nightly fee to attract more visitors.
- Maximum Rate Per Night Strategy: This strategy calls for hosts to fix a higher rate for their nightly charges, where you can earn more profit from individual bookings. So, your income will still be satisfactory even if you have limited bookings.
- Long-Term Rentals Strategy: With this strategy, hosts set their Airbnb prices according to typical long-term rental rates (monthly rent) – this would involve drafting a rental agreement with potential guests.
- Balanced Airbnb Pricing Strategy: Using this method, hosts experience a dynamic approach to pricing, where a three-in-one pricing model is adopted, and all three prior strategies are integrated and used.
Before You Go! Here Are The Questions To Ask Yourself Before You Start
Even though you’ve read and discovered the four different types of existing Airbnb pricing models, to reap the full benefits, hosts should answer some critical questions that will help them make the best choices for the future of their Airbnb business.
Questions:
- What type of Airbnb property am I renting out?
- What amenities am I offering?
- Who are my target guests?
- Who are my competitors?
- What are my financial and business goals?
- Client stories.
Considerations When Adopting A Strategy
- You must ensure your rental price aligns appropriately with the type of holiday-let property you are renting. For example, luxury properties benefit primarily from a maximum night rate pricing strategy as they offer more for potential guests, so they can expect to pay more.
- Remember, guests pay in exchange for your services; therefore, if your space offers very little, it would be unwise to demand a high rental rate. However, if your property boasts luxurious amenities like swimming pools, gyms, etc., then you will attract more customers and, in turn, increase profits (even if your rates are high).
- Do not decide on a pricing strategy before you’ve decided on your target guest and demographic. If your customer base is young, adventurous packers, the maximum night rate strategy would be a wrong choice for business.
- Do not forget that your potential guests are your competitors’ potential guests, and you can expect visiting tourists to compare you before booking. Therefore, when considering a pricing model, choose the maximum fill rate or balanced pricing strategy to compete strongly in your local market.
Setting And Aligning Your Rental Business Goals
Whether you measure them monthly or annually, your financial and business goals play a crucial role in choosing a short-let strategy that benefits your business.
When you identify and consider your business goals, choosing an effective pricing strategy that makes sense for your long-term business success becomes very easy.
For example, a maximum fill rate strategy would be the most applicable option if your annual goal is to increase occupancy rates. Setting your nightly charges below average would attract more guests.
On the other hand, a maximum night rate or balanced Airbnb strategy might seem more beneficial if your annual business goal is not about the number of guests but profits. Learn more fundamentals about setting your price. Or use the button below to contact our property managers, who can for 12% increase your return on investment.
Property Management Across The UK
Our services operate from London but cover the most frequently visited, popular tourist destinations across England, Scotland and Wales. Discover our property rental portfolio to see the types of properties we work with, from individual private homes and holiday properties to multi-unit/apartment blocks.
Key Takeaways
Pricing Strategies summary
- Pricing is the make-or-break factor for short-let success: HelloGuest frames a strong pricing strategy as essential to online performance, as it directly drives bookings and competitiveness.
- The “sweet spot” is the core message: we highlight the risk of underselling (hurts perceived value) and overselling (loses bookings), and position the right price as one that reflects value and converts the right guests.
- HelloGuest outlines four practical pricing strategies: Maximum Fill, Maximum Rate Per Night, Long-Term Rentals, and a Balanced approach.
- Strategy should match your property and guest segment: We encourage aligning price with amenities and positioning (premium homes can command more) and grounding decisions in what comparable local listings are doing.
- Business goals determine the “right” approach: We recommend setting clear monthly/annual targets, using fill-rate tactics if occupancy is the priority, or rate/balanced tactics if profit is the priority—rather than using a single fixed approach year-round.
