2 steps to skyrocket your pricing strategy on Airbnb
Discover now the secrets to guaranteed success!
Although not a favorite topic of conversation, Airbnb economics is a necessary discussion for hosts. In short, pricing your Airbnb listing is the bread and butter of turning your business from an improvisational hobby to a professional and profitable business...so you can imagine how important it is to approach this topic in the right way.
Fortunately, there are two main streams that lead to smart pricing models for your Airbnb listing, and the two streams can also cross over quite well.
The first is costs and profits and the second is comparisons. But in the meantime.
When you create your first listing, Airbnb suggests a base price that best fits the property described so far. This price generator mixes some specifics of your property and a dash of local rental market trends.
For new hosts who do not have a very strong profile, Airbnb recommends starting at a lower rate than suggested to start a steady flow of bookings.
However, a pricing suggestion should never be considered blindly . Regardless of experience level, all hosts and aspiring property managers should definitely spend some time researching the right pricing strategy and comparing their own prices with those of their competitors' listings.
Exactly...the pricing "strategy": knowing the functions of the Airbnb site is important, but it is not necessarily enough for the success of your business. In other words, trusting the auto-suggestor is like jumping out of an airplane without being sure whether or not you have a parachute on you...MADNESS.
You need to come up with a strategy , and we at RentalPro are here to help you do that.
This is one of those cases where being selfish is the only way to do it. If you are a host with a monthly rent or a mortgage to maintain, then you have to ... well, keep up. In these cases, breaking even on your Airbnb listing may be all you need to stay afloat.
Sure, you'll probably want to go above the minimum to make a few bucks, but the point is to make sure your costs don't go uncovered.
This brings us straight to the topic of utility bills--don't miss the opportunity to add in the cost of utilities, taxes, and--of course--cleaning up front.
For example, it would be a serious mistake and a shame to lose money on a reservation because of an air conditioning bill that is too high during one of the summer months.
Charging your guests these kinds of fees is a common practice on Airbnb, including them in the overall price of your listing.
How about the time spent updating the announcement calendar? Managing reservations? Coordinating housekeeping? Responding to requests?...
Simply put, how much time do you devote to making sure everything runs smoothly?
This paves the way for higher prices, because as we always say time is money.
Okay, the expenses are adequately covered by the price of the ad. But what if the final price is much higher than that of similar listings? Or much lower than qualitatively inferior Airbnb properties?
What to aim for? What is the appropriate price for my property? What niche should I aim for to stand out? What features will make my property distinctive? In a single word, for a professional in the field of short-term rental, all this is called "strategy."
In order to devise a functional and successful strategy, however, we need to start with as accurate and realistic a market analysis as possible... And so, we can say it: NO, relying on Airbnb's automatic price prompter is not the best choice.
Market analysis is a serious business that needs time and the right tools to gather key data, numbers in hand: average price per night in your area, features and amenities of your competitors, secret and less-exploited market niches, hot dates throughout the year, profitability statistics in a particular area, occupancy forecasts, and more.
Since we are feeling especially good today, we decided to let you in on our secret....
At RentalPro, we use BedlyGo, the latest market analysis software designed to help landlords and short rental professionals optimize their property management!
What we used to do manually - investing energy, time, and resources - we now do through this tool, which allows us to zero in on entrepreneurial risk, making us get the most profit from each property.
If you want to learn more and want to be sure to build the best strategy for your properties, ask us at RentalPro: our decades of experience in the short rental industry will guarantee you great results, thanks to the professional management of hundreds of properties now broken in and recognized throughout the international scene.
Feel free to contact us - RentalPro's Property Managers are here to help you maximize your business!
RentalPro Team
