Price setting is one of the trickiest areas for hosts to decide and one of the most commonly asked questions – is the price too high? is it too low? what’s the right price level?
Its also one of the most important factors to consider to get the most from your rental income so its worth taking the time to review it. Once you have added your listing, taken super photos and created a fantastic profile then pricing becomes one of the most important considerations guests will be making in choosing your place.
Although there is no perfect price level this article includes some tips and ideas on how to optimise your pricing & maximise your rental income:
- Competitive context — make a comparison of similar properties in your area and the prices they are asking. Firstly check other properties advertised on the same site as travellers will typically compare a few places before deciding, so this will be your direct competition and should provide you with the most relevant price range. If there are not enough comparable places on the site you are advertising on then do a wider search to include other sites or alternative accommodation options such as hotels, bed & breakfasts, hostels, etc.
- Occupancy rates & rental yields — if you are starting out its better to start with a lower rental price to get some bookings and build up some positive reviews. Once you have been renting for a while if you have no problem renting out your place most of the time then its worth testing if a small increase in pricing has any impact on your occupancy rate and visa versa if a decrease in rent will increase your occupancy rate. The goal is to find the right balance between the occupancy rate & rental yield to optimise your rental income.
- Seasonality & Special Events — on average summer bookings to London are 15% higher in the summer than during the winter period in addition to several seasonal peaks in demand, for example during Xmas, Easter, School Holidays & Bank Holiday weekends. There may also be special events in your area such as concerts, shows, matches, exhibitions, etc where it could be worth adjusting your pricing depending on the level of demand. Airbnb offers the option to add weekend pricing and manage different pricing levels in advance through the calendar.
- Availability — if there are only a few places available in your area and they are fully booked then you could reasonably increase pricing due to the shortages in availability. Managing variable pricing on this level is a bit more time consuming but could be worth it as a simple way to boost your rental income.
- Add a cleaning fee to your bookings — this Airbnb option is often overlooked but cleaning is one of the most time consuming or if you use a cleaning service costly elements for each booking, it’s becoming increasingly common and reasonable to add a cleaning fee.
- Additional guest fee — there is a feature on Airbnb that allows you to add an additional guest fee, so if you have the possibility to add additional sleeping arrangements even if a room or place is normally only large enough for a certain number of guests, this could be very useful for guests that don’t mind sharing the space or have an additional person staying for only part of the period.
- Review and adjust your pricing regularly — periodically review your pricing as competitor prices regularly change, the number & type of places available in your area change in addition to the reasons given above such as seasonality & availability.
Price setting can significantly improve your rental income if you are able to actively manage it. As part of our Airbnb management service London we will optimise your pricing and occupancy rates, we also offer individual as well full property management services with no hidden fees or contract commitment required — if you are interested in finding out more about our services then don’t hesitate to contact us (email: firstname.lastname@example.org) or visit our website (helloguest.co.uk)
Please comment if you found this article useful or have some additional thoughts that could help hosts with pricing.