How to Get An Unbeatable Airbnb Pricing Strategy
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You’re not getting the kind of feedback you would like on your Airbnb listing, despite already having it listed for months – so, what are you doing wrong? Could it be that your pricing strategy is just too high? It can be tough to determine whether or not your Airbnb nightly rate is less than ideal. You want to be earning rental income year round, however, you also don’t want to sell yourself (and your property) short. So, what do you do? We’re going to take a look at how to get an unbeatable and successful Airbnb pricing strategy, so you can maximize your earning potential.
Step 1: Make Sure Your Marketing Strategy Is Not the Issue
You might be reading this article because your Airbnb rental is doing great and you’re wondering if you should be setting your nightly rate even higher. And while that’s the ideal situation, it’s likely that you’re here for a different reason. Have you set your rental price too high and that’s why it’s not generating as much income as you would like? Before you go ahead and lower it, you need to make sure that your marketing strategy is not the problem.
Making sure you have a good marketing strategy is essential for running a successful Airbnb. A marketing strategy comes down to how you promote your rental and has little to do with the actual price you’re charging. Making sure you’re taking aesthetically appealing photos and videos, as well as providing personable and thorough information about your rental could make or break its success. So, before you go ahead and lower your price, make sure that you’re not selling your property short by way of your marketing strategy.
Step 2: Know What You Can (or Can’t) Afford
Making sure you take everything into account before launching your Airbnb rental is essential for making sure you turn a decent profit – or any at all. Even if you’re just looking to pay off a mortgage or a loan that you took out in order to renovate the property in the first place, you must keep in mind that there are other expenses beyond your monthly payment. Even if you’re not looking to make a substantial profit right away, you need to set money aside for possible repairs, maintenance, utilities and other expenses. Your property may cost you more than you can afford, especially during the off seasons where you may not be getting a steady stream of renters.
Step 3: Make Sure You Understand the Platform
Airbnb has different pricing options, which go far beyond the standard nightly listing. As a host, you are able to additionally set weekly and monthly discounts, which may sweeten the pot when it comes to long-term guests. The platform also gives you options to increase the price by guest, as well as set cleaning and security deposit (damage) fees.
It’s also very important to note that Airbnb does, of course, take a service fee. For the host, this is only about 3% that covers the cost of processing payments. For guests, they charge a 14.2% (yikes!) service fee off of the booking’s subtotal.
Step 4: Adjust Rates According to Demand
While you may not want to be that host that takes advantage of prime renting times, you need to understand that there is absolutely nothing wrong with doing so. Increasing your price due to market demand is part of running a successful vacation rental business, and you need to remember, that’s exactly what it is – your business.
Not only does this apply to times of the year that you know are prime times, but there are other instances as well. You should do your research on current events and if other properties in your area are booked out during particular weekends, you need to raise your price accordingly. This also applies to lowering your price during specific times of the year where guests are much less likely to rent, such as in winter. In this case, lowering your nightly rate is much more likely to turn a profit.
Most hosts also raise the price for Fridays and Saturdays, which are prime times no matter what time of year. There is also an Airbnb pricing tool that helps you set your weekend pricing, under “Extra Charges and Currency”, which couldn’t be more convenient.
Step 5: Long-term vs. Maximum Nightly Stay
For rental properties that are high in demand, some hosts opt for a maximum nightly stay policy. This is fairly self explanatory, meaning you can only stay for a limited number of nights, often maxing out at one or two weeks. If your property is in hot demand, implementing this maximum nightly stay rule may very well maximize your revenue.
If your property is not as high in demand, you may find you can make more money off of allowing long-term stays. This means that you’re generally offering your guests some sort of discount for staying for a month at a time, or more. This is generally a way to rent out your property for slightly more than you would get if you chose to rent it out on a yearly lease, giving you the option to have the security of a monthly income.
At the end of the day, these are all great ways in order to get an unbeatable pricing strategy for Airbnb. If you feel like you need just a little more help (okay, a lot more), we offer an online course from the world’s leading experts on Airbnb on not only how to become a top-performing host on Airbnb, but how to get the most out of your pricing strategy and optimize your revenue. Knowing tried and true strategies from other hosts is extremely valuable in developing an unbeatable pricing strategy that does more than just “break even”.