How to create a successful Pricing Strategy for your Airbnb and Homeaway short-term rental
Pricing Strategy – Know Your Market
Pricing is a never-ending discussion in the short-term rental industry. Wouldn’t it be easy if you could just set a price, let it go, and make a profit? The truth is, if you’re not adjusting your rates based on competition, local trends, and events, you’re leaving money on the table.
Don’t Price Too High, Too Early
When you enter the market, the first goal is to get some positive reviews under your belt and establish some credibility. Once you have some reviews, you can compete with the more recognized properties in your local market that have hundreds of reviews. When you’ve established your own credibility, it’s time to raise your price based on the market.
Start with Dynamic Pricing
While AirBnb does provide some pricing recommendations, they are lower than average in the market. Even with spikes for events and the high season, the rates are too low overall. Other major services in this market include Beyond Pricing, Wheelhouse, and Price Labs. Our preference is Beyond Pricing for its combination of accuracy, geographical coverage, and platform coverage. If you want to learn more about dynamic pricing, check out our post, You should be using dynamic pricing.
Almost every city has major attractions which will increase your occupancy and pricing. The obvious attractions are sporting events and art and music festivals. There is also ski season for those who live near a resort, or plenty of revenue if you live near the waterfront or a beach. The problem is that most hosts can’t live on events alone.
Most short-term rental hosts live somewhere in the USA. If you want to stay booked year round and get the most revenue out of your property, you’ll need a long-term strategy that looks beyond the obvious. Here are some tips:
Think Outside the Box
Hosts often miss their local events. Even though the big conventions tend to be downtown, there are often smaller conventions at hotels and other venues closer to your house which can affect the local rental market.
Do you live in a small town near a university? While some students take off for the holidays and spring break, many others stay close to the school for work or studying and the parents stay in town. Almost all hotels near a university are booked during the holidays for parents visiting students, and it’s a trend many AirBnb hosts miss out on.
Do Your Research
Search Bing and Google for local events. Not just conventions, but trade shows, events, and food festivals. Search on a macro level as well. If you live in a suburb, remember there are smaller events near where you live. Do you live near a local convention center? Some conventions will book away from downtown in a smaller hotel with good convention rooms. Those hotels usually book up quickly and at a premium rate. A combination of doing your own research, knowing your market, and using a dynamic pricing service is an excellent strategy.
Another thing to consider is going with a pro. A professional listing management service tracks all the trends in your marketplace and uses a dynamic pricing engine to squeeze the most revenue out of your property. It might cost you 10% in booking fees but bring you significantly more overall revenue and take a ton of work off your plate. You could be looking for new properties while someone else tracks your trends.
If you’re interested in finding out more about listing management, content someone at the Voyajoy team.