pricing strategy Archives

6 Pricing Strategies Every Airbnb Host Should Know

Posted on 3 October 2023 - 10:08 am

Let’s talk about Airbnb hosting – it’s not easy to figure out how to set the right price for your place. Many hosts, and we’ve all been there, struggle with this because it’s tricky to get it right. There are a lot of things to think about, like what other hosts are charging and when people want to book a place like yours. Sometimes, hosts just go with their gut feeling when deciding their prices because the other stuff can be a bit too much to think about all the time.

Seeing this struggle made us want to help out. So, we made a detailed list of pricing tips that any Airbnb host can use, whether you’re brand new or have been doing this for a while. Starting out, it’s key to do a little homework. Look at what prices other hosts are setting and think about when and why people are traveling to your area. Check out what guests want, too, like certain amenities. A quick look at this basic info will give you a solid base, helping you to set a smart price for your Airbnb listing.

1. Embarking on Airbnb Pricing for Hosting Novices:

Don’t raise your price too soon. It’s important to set your home’s price a bit lower than the average market price to attract those first, important bookings. Trying to compete with older listings that have lots of reviews right away isn’t a good idea; building up your own set of reviews should be a slow and steady process.

Tip: Starting with a lower price helps you build trust and avoids quick rejections. Plus, by having a lower price while still giving excellent service, you can sneakily beat the competition. To put it simply: Lower pricing is often a great way to attract Airbnb guests!

2. Gradually Escalate Your Listing Price:

After you’ve gathered a good number of reviews, it’s a good time to think about raising your price. Keeping a low price for too long might accidentally cause you to lose out on making more money.

Something Important to Remember: Just because your place is booked a lot doesn’t always mean you’re making as much money as you could be. If people are always picking your place because it’s cheap, they might have been willing to pay more, and you could be missing out on extra earnings. Moving on to the next point:

3. Immerse Yourself in Research:

Try to learn how other hosts, who have similar properties to yours in terms of size, number of bedrooms, style, amenities, and so on, especially those nearby, set their prices.

Tip: Notice how both old properties (ones with a lot of reviews) and new listings (ones with few or no reviews) set their prices. Hosts with more experience and reviews usually charge the full market price.

4. Deepen Your Research Efforts:

Don’t cut corners. Spend time and effort to really understand how to smartly set your Airbnb property’s price and find out its true worth, judged by how the market reacts. By getting to know similar properties around you, you also get to know who you’re competing against. It’s super important to know your competitors. Also, look into some of the most loved properties on Airbnb and figure out what cool things they’re doing to wow their guests. Do the same things.

Tip: Figure out and do what guests love, and they will likely love you back.

A Helpful Hint: If you like to offer extra stuff to your guests, feel free to charge more for that. A lot of Airbnb hosts do this to make their service worth more, and usually, guests really like these extra touches.

5. Timing is Paramount:

Always keep an eye on changing seasons, shifts in when tourists like to travel, and even the differences in prices between weekdays and weekends.

Weekdays VS Weekends: There’s a clear reason why hotel prices go up on the weekends and jump even higher on long weekends – that’s when more people travel. In short: demand goes up on weekends.

Tip: If you’re charging the same prices for both weekdays and weekends, you might want to think about changing your approach.

6. Stay Abreast of Local Happenings:

Being aware of big events happening in your city that can attract lots of people — either for fun or work activities (like relaxed events such as concerts, musicals, local festivals, big international events like F1 races, the Olympics; or work-related events like conferences, seminars, or exhibits) — is also really important.

Conclusion:

We get it; finding the perfect price for your Airbnb property can be a tough journey. It really does take a lot of time and work — something every successful Airbnb host must go through.

But there’s some good news:

There are Airbnb and property management service companies, like Keey, that are here to help take away the stress and hassle from your hosting duties, making your earnings journey smoother and easier. Take a look at what they offer and see how they can help you with your pricing troubles.

Maximizing Your Short-Term Rental Success with Keey

Posted on 19 July 2023 - 1:44 pm

In the fast-paced world of short-term rentals, maximizing your success as a host requires strategic planning and expert guidance. With Keey as your trusted Airbnb management partner, you can unlock the full potential of your short-term rental property. From enhancing the guest experience to optimizing your rental income, Keey provides the tools and expertise to help you thrive in the competitive vacation rental market.

Understanding the Short-Term Rental Landscape

The growing demand for short-term rentals and the benefits of partnering with Keey
Advantages of professional property management and the potential for higher rental income

Elevating the Guest Experience

Proven strategies to enhance guest satisfaction, from seamless check-ins to personalized recommendations
Importance of exceptional customer service and creating a memorable stay for your guests

Maximizing Rental Income

Effective pricing strategies, dynamic pricing, and optimizing occupancy rates for increased profitability
Role of market trends, data-driven insights, and Keey’s OccuMax pricing algorithm

Streamlining Operations for Efficiency

Tips and best practices for efficient property management, including housekeeping, maintenance, and communication
Benefits of leveraging Keey’s technology and operational support

Harnessing the Power of Property Marketing

Unveiling marketing strategies to boost your property’s visibility and attract more guests
Importance of compelling listing descriptions, stunning visuals, and effective promotion

Continuous Improvement and Adaptation

Staying updated with industry trends, emerging technologies, and guest preferences
Adapting and evolving to maintain a competitive edge

With Keey by your side, you can unlock the full potential of your short-term rental property. Prioritize guest satisfaction, optimize rental income, and streamline operations to maximize your success as a host. Trust in Keey’s expertise, comprehensive support, and advanced technology to navigate the ever-evolving world of short-term rentals.

Seasonality: How to Price Your Airbnb Across the Year

Posted on 29 November 2021 - 12:00 pm

There’s a lot to consider when trying to get the most out of your holiday rental. Appealing photographs, a powerful description and – perhaps most importantly – the right pricing.

Price your property too low and you won’t be maximising profits. Price it too high and you’ll be losing out on bookings to cheaper options nearby.

When it comes to seasonal pricing, it’s all about having an awareness of the rental demand in your area. As demand rises and falls in your area, you can fluctuate your pricing in order to maximise bookings and profit.

A great place to start is looking at peak visitor times for your area, be it the holiday season or special local events and celebrations.

Then, by getting a sense of the pricing of nearby holiday lettings, you can establish a competitive rate. Setting rates for future seasons well in advance is essential so that early bookers are paying the right price – and you can make the most out of your rental.

Your Baseline Pricing Strategy

Break-Even Point

Before considering seasonal pricing, you’ll need an effective baseline pricing strategy.

In order to best work this out, you should know your minimum price – this is your ‘break-even point’. To calculate this, you’ll need to work out the monthly and yearly costs of maintaining your property. These include:

Monthly overheads such as rent and bills
Renovation and maintenance costs
Cleaning services if relevant
Toiletries, food & drink if relevant.

You can then use this to work out how much you need to take per night or per week in order to break even.

Profit

Next comes profit. You can decide how far to go above your break-even point by researching other properties nearby that have similar features. These include:

Number of bedrooms
Number of bathrooms
Whether you have a garden
What amenities you offer
The style of the décor.

While sometimes overlooked, all of these elements can drastically change the pricing.

It can be helpful to consider your target guest when making comparisons – in order to find and research properties that could be your direct competition. Research is an essential step. If you skip the research and price your property too high for the area, you could lose bookings to better deals nearby!

Read Now: How to Create the Perfect Pricing Strategy for Your Airbnb

Seasonal Pricing

So, you have your baseline pricing secured. Now you can start thinking about how to adjust the price of your rental throughout the year.

By pricing in a way that increases alongside the demand for your rental, you are maximising your profit and bookings. Additionally, you are still keeping a competitive price within the local market.

Peak Seasons

Pinpoint your unique peak seasons and days. This will depend on your location and the popular holiday periods of your target market – be it school holidays, summer or the Christmas season.

A property in a skiing location will have a different peak season than a property in Cornwall, which will in turn be different to properties in London. The months in your peak season will be your most profitable and the most important to price high for, while still aiming to stay competitive.

In the months outside of your peak season, however, you may receive far fewer bookings. You might find that your competitor’s prices have been lowered – have a look at them and lower your own. Optimising your bookings can be a constant learning curve, especially in the first year when you don’t know what to expect.

Read Now: Strategies for a Successful Airbnb in the Slow Season

Peak Days

Be aware of when and why guests might be looking for accommodation in your area. There will be certain days throughout the calendar when you can expect a spike in holidays and mini-breaks or a rush of people to your area in particular. These include:

Bank Holidays and Celebrations

Bank holiday weekends
New Year’s Eve
Valentine’s Day
Mother’s / Father’s Day
Christmas and Boxing Day
Easter Sunday and Monday

School Holidays

There will usually be a rush of demand around state school holidays. Around this time you can expect parents to be taking time off work and looking for family accommodation in beach towns, country getaways, or to be closer to relatives. Autumn half-term, Christmas, Spring half-term, Easter and Summer holidays are all times when you can expect a spike in bookings.

Read Now: 3 Tips For Making Your Rental Family-Friendly

Special Events in Your Area

These are events which bring tourists, and therefore demand for your holiday rental. If for example, your property is in Notting Hill, your area will likely see a burst of demand around Notting Hill Carnival. This makes this a perfect opportunity to raise your rental price while still remaining competitive.

If you live in North or North West London you can also expect to see increased demand on the nights of big rugby and football games, as 75% of London matches are held at Twickenham and Wembley. These price surges also occur around the time of festivals and events, like the Chelsea flower show.

More generally, you may find that weekends are more likely to be booked than weekdays. In this case, lower your weekday prices to make these days more attractive to flexible bookers.

To Sum Up…

A great place to start when working out the right price for your rental is your competition. Ensure that you take into account how the features of your property compare. The ideal rate for your short-term letting is attractive and competitive but takes advantage of dates when rentals are in demand.

If you think you could benefit from some help to find the best pricing strategy for your property, speak to one of our experts at Keey today!

How to Create the Perfect Pricing Strategy for Your Airbnb

Posted on 17 June 2021 - 1:00 pm

In order to have a successful Airbnb listing, you’ll need to have an effective pricing strategy in place.

By carefully planning your strategy, your Airbnb listing can bring in a higher income than ever before; allowing you to create suitable pricing that works best for you and your guests.

person managing his propertiea — Managing your property is a lot of work!

There’s a lot to take into consideration when creating the perfect pricing strategy for your property. Let’s take a look at what steps you need to take below:

#1 Understanding Your Finances

Starting an Airbnb or short-term rental may have just been a way for you to earn some extra money, or maybe you have monthly overheads on a property that need to be paid. Either way, you should treat your rental accommodation as a business – because it is.

In business, the worst thing that can happen is for you to be at a financial loss. You should work out your monthly and yearly costs for running your rental before estimating any prices for your listing. Take into consideration any costs for renovation and maintenance of your space, including your overheads too.

When you have worked out your overheads for the month or the year, work out your break-even point; where the cost of production (renovation, upkeep and bills) is even to the revenue (income).

It’s important that you work out how much you would need to receive per night or per rental to secure your finances. For example:

Your mortgage = £1,000 per month (12,000 per year)

Bills (water, gas, electric, council tax, internet etc.) = Approx. £400 per month (£4,800 per month)

Your renovation = £2,000

Total = £18,800

You will need to secure an income of £18,800 per year as a minimum to cover your costs for that year – this is your break-even point.

Next, divide your totaled yearly amount (£18,800) by how many nights/weeks/months you can rent your space out (example: 52 weeks) and that will help to give you your minimum price tag.

Example: £18,800 divided by 52 weeks = £346.15 per week.

With the example above, you would need to rent your space out for a minimum of £346.15 per week in order to hit your break-even point.

Business isn’t just about getting your money back; why put all that effort into something if you’re not going to maximise your income?

person using calculator — Before setting a price, calculate your costs and outgoings.

#2 Your Local Competition and Area

When putting together a successful pricing strategy, you’ll need to conduct some research of your own by analyzing the competition – other Airbnb’s in your area and general surroundings.

In order to understand the ideal pricing for your Airbnb, take a look at similar properties being offered on Airbnb and focus on your properties features. For example, if you have:

Four bedrooms
Two Bathrooms
A large garden

Then, you should take a look at which properties in your area offer similar amenities to get a good idea of what the standard prices are. Your prices will vary greatly depending on what your property has to offer a guest.

Try to find properties as similar to yours as possible, a shabby four-bedroom house will price differently to a four-bedroom boutique styled house even if they’re in the same area.

Consider your target guest too when looking at local listings, make sure to take into account who your competitors Airbnb cater for, as this will help you with your strategy.

For example, if you are a pet or disability friendly property, you should look to see if you have a unique listing in your area as that will allow you to increase your prices purely because you have less competition.

Unfortunately, if you skip this research stage and/or price your Airbnb too high considering the location, you could miss out on bookings and overall income. The same applies if you undervalue your Airbnb, your property is missing its true potential and your profits could suffer.

Checking your local competition is a must for success.

house location — Make sure you check out your competition – that way you can compare prices to help you get ahead!

#3 Fluctuate your Prices

To become a landlord with a good pricing strategy, you need to rent your space out at different prices throughout the year.

Based on your location and target audience, you will have specific peak seasons and days. For example, if your Airbnb was located in Snowden, Wales or London, England – your peak times would vary slightly from each other.

If your peak seasons are: June, July and August, then this should be your most profitable time. However, in the months such as February, March and April, you may notice you don’t get many bookings or that your competitors have lowered their prices, you should lower your prices too, in order to remain competitive.

This rule applies for weekdays and weekends too, typically, weekdays are less likely to be booked out so, consider decreasing your prices to allow your listing to seem extra tempting to flexible bookers.

Be sure to keep in mind, public holidays, school holidays and special events in your area; you could potentially charge more for these specific dates. Be on top of when and why guests are looking for accommodation in your area.

person analyzing diagrams — Varying your prices to match fluctuations throughout the year can help you maintain competition.

#4 Offer Extra Services

You should offer guests a great stay and go above and beyond their expectations, but at what cost? Sometimes, you should charge extra on top for additional services.

Your guests will likely be happy to pay for additional services if it’s of good value to them. They may need an extra bed, or an extra person added to their booking; you should charge a small fairly priced fee.

However, if you are hiring professional cleaners, or restocking toiletries before their stay, you should ensure that the price is covered in the rental price, not as an extra charge.

Not charging for additional services is one of the ways that landlords can lose potential income on their rental.

Be strategic with your costs and allow your guests to feel that they are receiving what they initially paid for, if they want extra services – they should expect to pay an extra fee. Make sure to be fair with your extra costs.

Read now: 7 Ways to Make More Money on Your Airbnb

#5 Discounts for longer stays

When hosting on Airbnb, the platform is primarily used for short-term rentals, however, it works well for longer rentals too. Having longer rentals means that you don’t have to handle the changeover of guests, as well as, not having to pay for regular cleaning.

Your pricing strategy should reflect this. If your costs are reduced, it would be beneficial for you to reduce your price for lengthy stays.

By offering weekly and monthly discounts, you can attract longer term renters, helping you stay booked up for longer and more income, not to mention – it’ll be less hassle all around.

#6 Charge more for Short Stays

With short-term stays, they’re not always cost effective, particularly for only 1 or 2 nights. At your standard nightly rate, it wouldn’t make sense to host if your costs outweighed your revenue. You could be paying a lot for cleaning and managing your short-term guests booking.

Is it really worth it?

Two ways to avoid losing money and dealing with the inconvenience of short bookings is to:

Charge more per night

Set minimum stays (+/- 2 days)

Charge more per night

Increasing your prices for the first few nights for your short-stay guests will ensure that your costs have been met and the booking is worth your time. This strategy can also persuade guests to increase their duration for their stay and ultimately allow them to feel that they’re getting good value for their money.

Setting minimum stays

If there is an event near your rental space, such as, a festival, your Airbnb may only be rented out for 1 night. Loosing you a lot of potential income. By setting up minimum durations of how short a guest stays can be, may help you to stay booked for longer and ensure your income.

We recommend making your minimum stay a minimum of two nights, to keep your listing appealing.

woman carrying a suitcase — Encourage longer stays to make the most of your property.

#7 Use A Strategy Mastermind

When it comes to setting your prices, there’s a fine line between too much or too little on your price tag. How are you supposed to know whether or not you’re optimising your properties income? It can be really confusing and daunting when you’re not sure of what’s right or wrong.

Consider hiring a professional pricing strategist to get the most out of your rental. A lot of Airbnb hosts choose to seek help from a reliable rental management company to help create their perfect pricing strategy.

Read now: Benefits of Employing a Residential Management Company This Summer

Speak to one of our pricing strategy specialists here, at Keey. We help you ensure that you’re getting the best out of your property’s potential.

Tag: pricing strategy