Setting a pricing strategy
Whatever your financial goals, a savvy pricing strategy is key to success. But reaching your earning goals can be a bit of a balancing act, with variables changing day to day and week to week. Here are some helpful insights, along with a few tools and tips to simplify the process.
Think like a guest
Price is one of the main factors guests consider when choosing where to stay. No matter how beautiful your space, if it’s priced higher than comparable listings in the area, there’s a good chance you’ll miss out on bookings. You also need to keep in mind that the price you set isn’t the final price guests will pay. Make sure to factor in the guest service fee, any additional fees you plan to charge (like cleaning or extra guest fees), and taxes in your area to determine a price that will work for you and your guests.
Do a little market research
Start by searching Airbnb for similar spaces in your area, taking into consideration:
- Your property type (private room, entire home, etc.)
- The number of beds/bedrooms you provide
- The number of guests you can accommodate
- Your available amenities
Make sure to check multiple dates in the future. Listings with competitive pricing tend to book up first, so don’t make the mistake of benchmarking against properties still available just a week or two away—those are likely to be the ones that weren’t booked because they were priced too high. Thinking ahead will also help you learn how hosts near you adjust pricing seasonally, on weekends, and for special events or holidays.
Consider your location and amenities
Remember that things you’re factoring into your pricing may not be obvious to guests. For instance, the safety and beauty of your neighborhood may mean nothing to someone who doesn’t know your town, so be sure to call them out in your listing. Aspects of your great hospitality like breakfast or a welcome basket full of treats might also help you warrant a higher price, but you’ll need to make them super clear in your listing and photos.
Stand out with great pricing
“When you’re just starting out, it’s a good idea to have a competitive price,” says host Ros from Durban, South Africa. Guests are hesitant to book listings with no reviews, so for new hosts, setting your price a little lower than your ideal number is a great way to attract guests. Once you have a few positive reviews under your belt, you can raise your price to match the demand in your area. Competitive pricing can also help your listing rank higher in search.
Use the Smart Pricing tool
Want to take away some of the guesswork? Turn on Smart Pricing. Airbnb’s pricing tool takes into account over 70 different factors—plus controls you’ve set—to determine the best price for each available night on your calendar. Your pricing will automatically update depending on things like:
- Lead time: As a check-in date approaches
- Local popularity: The number of people searching for home stays in your area
- Seasonality: Predictable seasonal changes in demand for home stays in your area
- Listing popularity: How many views and bookings your listing receives
- Review history: Your amount of positive reviews from successful stays
To make sure your listing price always meets your needs, be sure to set a minimum nightly rate in the Smart Pricing tool. Your rate will never fall below that threshold. And if at any time you’re not happy with the rate set by the tool, you can simply type a new one into your calendar.
Find what works for you
It may take some time and a bit of trial and error to get your pricing just right. Be flexible, and stay focused on guest satisfaction. After all, more positive reviews can help improve your hosting business.