Uncover the basics of pricing on Airbnb 🛌 to maximize 📈 your revenue 💰and attract the best guests! Plus I'll show you which pricing tips from Airbnb to accept ✔️and which to avoid 🚫.
On this week's episode 📺We'll uncover 🔦the 4 steps I take to price my listings:
👉Set your availability
👉Choose your price range
👉Set your prices
👉Update & monitor
I've been using this 4 step strategy for years and it has generated over a million in revenue 💵💶.
👉👉Every week I post a few quick Airbnb tips on my Instagram account! 📸📸 Follow me: @airbnbuncovered
Welcome back to my channel! I’m Matt the creator of airbnbuncovered.com and Airbnb super host. On this channel I UNCOVER some of the best kept hosting secrets as well as share with you everything that I’ve ever learned after hosting over 3000 guests.
This week’s video is going to cover the basics of setting prices for your listing. If you’ve been hosting for a while, this one might not be for you. But if you’re brand new to hosting, I think you’ll get tons out of this video.
Providing great information for new hosts is what this channel is all about. Every Tuesday I share a new video. Each one is chaulked full of helpful tips and best practices for a new host. And it will accelerate your growth since they won’t have to learn by experience as I did nearly 5 years ago.
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Learning how to price your listing on Airbnb is the key to earning more and hosting the best guests. And there’s a lot to it. Today I’m going walk you through the 4 steps I take to price my Airbnbs. This strategy is pretty powerful and has generated over a million dollars in revenue over the years.
So let’s start with the basics of pricing on Airbnb:
Airbnb offers you 2 different pricing options: manual and smart pricing. Under the manual setting, you’re fully in charge of setting all your prices and making changes as necessary. Under smart pricing, Airbnb completely manages the pricing for your listing. It will raise and lower your nightly rate depending on demand in your local area. While this might seem like the perfect solution, unfortunately, as reported by many hosts – myself included—it does a very poor job of managing your prices and often sets them way too low.
Because of that, this video is going to fully focus on manual pricing for your Airbnb. I’m going to walk you through the 4 steps I take to set my price.
The first thing to know about pricing is that you have set your availability window. This is how you tell Airbnb which nights your place is available to host guests. You have a few options here, you can set all dates to unavailable and manually open the dates you want to host on, or you can set your calendar to be open for three, six, nine or twelve months in advance or lastly set all future dates to available. If you choose three, six, nine or twelve months in advance, every day Airbnb will unlock one more day to be available, three, six, nine or twelve months from now. This is an important factor to bear in mind as we talk about pricing.
To dive a little deeper, Every listing has a base price for both weekdays and weekends. These will be the prices that are populated on your calendar when you first set up your listing. It’s also the price that will be set as your calendar opens new dates.
Chances are that you operate in a place that has seasonality – meaning that some times of the year will be busier than others. You need to adjust your price to compensate for this. Don’t make the mistake of setting one price and leaving it for the entire year. Your profits will definitely suffer.
You can also add length-of-stay, early-bird and last-minute discounts. These discounts will all be subtracted from your base price for weekdays and weekends. And They’re all set as a percentage discount. There's also an option to create percentage increases and decreases for specific times of the year. These are advanced features and will be the subject of a future video.
So the first step is to set your availability. I recommend setting it to either nine or twelve months. This way you can set a bunch of prices all at once and then you adjust as you go. I’ll show you exactly how to set your prices for the year after, I explain how to set your base prices.
Step two is to decide on your price range which means that you'll define What the lowest price is that you’ll accept and what the highest price is that you think a guest is willing to pay to stay in your home.
If you’re new to hosting, you’ll have do some research. Do a search on Airbnb for similar places to yours to create your range. Remember to search on both weekday and weekend prices. With this data, decide on an average price for both the weekends and weekdays. and then set your weekend and weekday prices maybe 10% above this. These will now be your default prices.
If you’re already hosting, what is the highest nightly price you’ve earned to date? Leave it in the comments below.
Since you’ve now got your default prices set to a rate that is slightly above average, as new dates are opened and theses prices are attached you can rest assured knowing that you’ll be adequately priced. While these prices won’t be perfect, it's okay because they're only being assigned to dates 9 to 12 months from now, when there won’t be much activity on them anyway. But at least you’ll know that they’re priced above what your average rate will be.
I don’t recommend looking at hotel rates in your area unless you’re near a number of lower-priced hotels, in which case guests may be switching back and forth between Airbnb and hotels. Generally speaking though, an Airbnb guest isn’t really comparing the rates between hotels and Airbnbs. This is because guests staying on Airbnb are generally looking for home-sharing options versus hotel options. Normally guests just compare rates between Airbnbs, since often times there are so many Airbnb listings shown in search results on Airbnb that it provides sufficient choice...and sometimes to many choices.
Step 3 is to set your prices for the nine or twelve-month period that you have open. If you haven’t changed any of your prices, they’ll all be set to your base weekday and weekend price. In the majority of areas, there will seasonality impacts.
Where I operate in Toronto, that impact is as high as double the price. Jan to Feb are our slowest months here and July and August are the best months. My prices in Jan and Feb are often at least half or more than what I charge in July.
Setting your prices takes some practice and experience. For instance, when I was first starting out, I made a lot of guesses and many, many adjustments. Now, nearly five years later, I can go to nearly any month and set prices without thinking twice. Of course, market conditions are always changing, so maybe I do think twice now and again. With practice, you’ll get here too!
So when I set my prices for the year I start with my slow season. I set my weekday and weekend prices to almost to the lowest I’ll accept. I say almost because I want to leave myself room to drop my prices if I’m still not booked as the dates approach. Then I go to my high season. I set my prices to the highest I think I can get and then drop them if the dates near and I’m not booked. Finally, I go back and fill the gaps between slow and high season by gradually increasing my prices up from the slow season until I get to the high season rates and vice versa to get back down to my slow season rates.
For many of us, this up and down curve is going to be how it goes. The one exception, I have with my listings is December. And this could apply to you too. I do see increased activity over the weekends leading up to Christmas due to office holiday parties and shopping trips. I see another increase in demand over New Years. And for those dates, I increase my prices back up – but not as high as I do in peak busy season because the demand is not that strong. But it is higher than it would be if I was trending my prices down to their lowest point in January. Then in January, I revert back to my lowest pricing of the year.
Let me give you a bit more of the rationale behind setting prices slightly above what I’ll actually accept. By leaving prices a touch higher for far-out dates, I create the opportunity for guests to book me a higher rate than I was expecting. I look at it as charging a premium for securing one of my listings well in advance. But it’s important not to go too high because some of the best guests book in advance. Let me say that again, the best guests generally book well in advance.
If you’re priced too high, those 5-star guests are going to book elsewhere and you’ll miss out on some of the best guests.
Leaving room to drop your prices is also very important. The Airbnb algorithm rewards hosts who update their calendar regularly. By creating this room to drop prices, I always have something to change. You may be thinking that I could increase my prices as well to show activity. While this is true, but you could be leaving money on the table from guests who have already booked you at your lowest prices.
Step 4 is to update your calendar at least every second day or in the best case every day. As I just mentioned you’ll be rewarded for constantly updating your calendar. That reward will come in the form of a higher search ranking. A higher search ranking will equal more views on your listing. More views will equal more bookings – as long as your price is set reasonably. And More bookings will equal more money.
One final note on pricing. You’re going to get suggestions from Airbnb appearing on the right side of your calendar. There are two types – the first is to adjust your nightly rates over a month. I always have a look at these prices and about half of the time, I accept them. I think doing so gives you a little boost with the search ranking algorithm. I definitely don’t accept them, though if the recommended prices are too low, just for the sake of pleasing the search algorithm.
The second suggestion is to drop your base price. Be very careful of this option. By accepting this change it will completely erase all of the weekday prices you’ve manually set and then you’ll have to go back in and re-set them. I’ve made this mistake before and I genuinely hope that you don’t!
Let me summarize this week’s video. I took you through my proven 4-step method to setting prices. The first step is to set your availability. Then second, create your price range and set your base price. The third step is to set your prices for your entire availability period – ideally either nine or twelve months. The fourth and final step is to make changes to your prices at least every second day. I know that by following these four steps, especially the last one you’ll be well on your way to earning more.
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Thanks for watching and until next Tuesday, bye for now.