Choose the right price for your Airbnb listing and never have to touch again right? Wrong!
If you’re not adjusting your pricing regularly based on competitive trends, seasons, and special events, then you’re leaving money on the table.
Here are the most common mistakes made with Airbnb pricing.
Not Using Automated Airbnb Pricing
Powerful Automated Airbnb Pricing Tools help Airbnb hosts earn up to 40% more revenue. These services have algorithms that can detect the slightest change in your local Airbnb demand and then they price your rental for maximum income.
These services take into consideration a ton of factors including:
- Special events
- Weekday vs. weekend
- How far out the booking is
- Seasonality
- Hotel prices
- Your competitors prices
- Local occupancy rates
…and so much more.
They help protect your Airbnb business from nearly all of the mistakes I will name below.
Pricing Too High Too Early
You need your Airbnb pricing well below the market price initially to capture the initial bookings.
When you first list your unit, especially if it’s your first unit, you have little credibility with the Airbnb guest community.
It’s difficult to compete against established hosts and units that have 10’s or 100’s of reviews.
Pricing Too Low Too Long
After you build up your reviews, you’ll need to raise your prices accordingly.
While yes, it feels nice to be fully booked out for the next 3 months, your very high occupancy that far into the future only means one thing…your unit is priced too low and you’re missing out on profits.
Raise prices until you are about 75-90% booked 2-4 weeks out, but are only 50% booked 8-10 weeks out.
Pricing the Same for Weekends & Weekdays
If your weekend and weekday Airbnb pricing is the same, you’re NOT doing it right.
There’s a reason why hotels have higher weekend rates–the demand for staying at that time is higher.
Look at hotel rates and other competitor Airbnb unit rates in your area and compare their weekend vs weekday rates to establish a starting point for your rates.
Pricing the Same Throughout the Year
There is usually some seasonality for travel demand to an area.
Knowing when it’s high vs low season can help you adjust your pricing to maximize your profits and bookings through out the year.
Pricing too high during low season will hurt your occupancy rate. Pricing too low during high season equals missed profits.
Not Factoring Special Upcoming Events
Special events that are popular often book out well in advance, so keep an eye out on your local event calendars for things like sporting events, concerts, conferences and more.
Bookings for these types of events can often command 2-5X the normal nightly rates. So if you’re booked up at your normal rates, you’re SERIOUSLY missing out on profits.
Airbnb Pro Tip: You can easily maximize rental revenue with dynamic pricing tools, which use large amounts of data to automatically price your rental right, every night of the year.
I highly suggest checking out an automated Airbnb pricing service like Wheelhouse so that you don’t miss out on a perfectly priced listing.
As you may know, automated pricing can NOT be a one-size-fits-all type of solution because hosts have many different motivations and mindsets.
Our favorite feature of Wheelhouse is that their pricing algorithm can be personalized for your type of hosting strategy.
Maybe you want to be a bit more conservative on regular prices, and a bit more aggressive on picking up those last minute bookings…Wheelhouse can do that for you.
Check out their product here to see how it can amplify your Airbnb revenue.
✔ How to avoid the BIG mistakes that most hosts make
✔ The secret weapon of all Top 1% Hosts
✔ The pricing strategy used by professionals
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This free training is brought to you by James Svetec an Airbnb Expert who has managed over $1M in bookings & Symon He, the founder of LearnBNB, the #1 Airbnb hosting education blog.
Learn about all of the secrets that professional hosts don't want you to know
Good points here. We’ve actually written up some insightful tips on pricing as well, from the perspective of a former Airbnb market manager, care to exchange posts?
Yes we would be interested in exchanging some posts. Please email us at [email protected] and we can chat further. Have a great day!
Great article! Very insightful information.
I would love to also see your post Bukit Vista, Villas and U.
Thanks!
Rebecca
I’m not too sure about AirBnB’s price tips. Some prices it showed me was way too low, and I have a large house with two bedrooms and a bathroom in a private guest area. When the price is too low it attracts too many young people, such as college students, and they can be noisy and messy.
Hey Karin,
I totally agree. The Airbnb pricing recommendations can be off.
Another thing to consider is the incentive for Airbnb. Airbnb is guest focused and wants to get more BOOKINGS (no matter the price…usually lower is better so it shows ‘value’ in the guests eyes).
Also, if Airbnb is suggesting something ‘off-the-wall’, go over and open an incognito browser window and do a search on Airbnb’s in your area for similar units. See what others are charging and if that falls in line with Airbnb’s suggestion.
If others are charging a lot, Airbnb may suggest you drastically lower your price. That leads to a booking….win for Airbnb, but it can leave money on the table. People self-select into places they can afford and feel comfortable in. The lower your prices, the wider range of people you attract. Then it’s a double hit…if they are messy then you have to do more work and get paid less. How do you do pricing now? Have you tried any of the automated pricing systems like Everbooked?
I cannot adhere to airbnb’s pricing strategy because when I first opened my home I was getting homeless people who brought home food from the foodbank and ex-cons staying here. This was not who I pictured sharing my home with. I keep it high for safety and since I don’t need the income anyway I am just there for periods when the hotel market is short.
I agree that Airbnb’s price tips are not helpful overall, but I do check their trends (upticks and downticks) and price accordingly. I pretty much always price above their tips. They suggest a $63 price for our unit at times and we always pull in a minimum of $99-$119 per, so that would have been quite a loss for us had we gone according to their lame suggestions. 🙂 We have been superheats for quite a while.
Will they pay for damages or theft of property from renters. My homwowners policy wont cover me renting my house out.
Tom, Consider contacting Proper Insurance at https://proper.insure and they can help you learn about the insurance products they offer. There is also the Airbnb Home Protection (https://www.airbnb.com/host-protection-insurance) which may be able to help.
I agree that the pricing tips suck, I rent a 2 bedroom home about 4 miles from a very popular beach, and get recommended to list in the low $50 range from time to time. When bookings get slow I don’t mind lowering the rate, but $50 is dirtbag motel pricing.
The tool that you offer for pricing does not work for many locations. Are you promoting that tool? That’s fair enough but what about others? That is the most valuable information a host wants and that would be highly valuable information to offer. Great site and look forward to hearing from you. Cheers!
Hey David, Thanks for the message. Check out Beyond Pricing. They offer pricing solutions for other locations. Hope this helps!
Agreed- this seems like a garbage affiliate article, not real recommendations. Anyone who’s spent 30 seconds on the platform knows not to poke Airbnb automated pricing with a 10 foot pole.
What would be a good cleaning fee and security deposit?
Depends on your market and situation. Shouldn’t be at the high end in your market as that creates more friction to booking but also should be large enough esp if you have a large or more upscale space for some deterrence.
My cleaning fee varies, I look over the house and see how they have left it. Some people are great some awful. Security is 200E. Depends on the size of your house.
We just received a Booking for 12 months time at $75 a night where our winter rate plus being school holidays is generous at$195. Even our cheapest winter rate is $85. We are super hosts. Where was this figure plucked out of the air? Will be a $800 odd lose.
Wet the idea that you get “better” guests by charging more, as someone who has stayed several places, the more I pay, the pickier I get, the more annoyed I am at having to clean anything, and the more I expect from the host and unit. And I know plenty of richer people, which is what you mean by “better,” who would never be satisfied with the humble abodes in which I have stayed. Using special events as an excuse to charge 5-star hotel prices only leads to letdowns and feeling ripped off in a typical condo unit.
Thank you.
I am challenge with the task of improving my Airbnb bookings without compromising or reducing my nightly rates. I price my listing based on operational cost and not necessary what the market is competing at. I can do this because i am offering superior service in guest relation, location and facility experience. What would you recommend to me?
Unless you can clearly demonstrate your advantage on your listing to potential guests, you’ll be underbooking your listing. When a potential guest sees potential listings, if they can’t tell the difference easily among listings that all appear to be the same, they will choose the less expensive option. If you want to average a higher nightly rate than what the market is willing to pay, you’ll need to accept a lower than average occupancy rate. But if you can clearly demonstrate WHY your listing deserves a premium, then you might be able to do that.
What happenend to the old Airbnb pricing where you could set the price for each day or week on the calendar. This new system sucks, totally picks random prices which invariable leaves the guests pretty upset when you have to tell them the tariff is way too low or leaves the owners out of pocket. Change back to the old way or I’m out!!!
Isn’t it better to keep your prices at a reasonable level and be booked constantly, rather than reach for bigger dollars and risk having days go by without a booking because you’re neck-and-neck with everyone else on Airbnb? To me, the idea is to establish a rate that you’re minimally happy with, seek to have constant bookings, and know that even if a room rents for just $50/night, it will translate into $350/week and $1400/month for ONE ROOM. Am I wrong here?
You’re not wrong at all. You’re just making a choice that many won’t want to once they find out what they’re giving up. You absolutely can and you’ll likely be leaving quite a bit of money on the table. Here’s a real example we’ve seen with some hosts in a particular part of San Diego–during a special event that happens locally once a year, there is a 1 week period were the avg rates are almost 5X higher than the normal rates for the year. You can absolutely keep the prices the same as before (and your listing will be booked up 100%) but the demand is there for those days such that you’d essentially be giving up the equivalent of 28 days of typical occupancy. If the demand is there and guests are happily willing to pay for it, as they’ve demonstrated with the exact same listings in the market already, why should you as a host willingly give that up? You can choose to be minimally happy. Some hosts want the option to be maximally happy. We’re all free to choose. Just know what you’re giving up in your market and be okay with it.
Rick “ Amity”’s listing
Farmhouse condo just a few minutes from everything
PRIVATE ROOM · 1 BED
Farmhouse condo just a few minutes from everything
This place is a rip-off. The host refused to refund any money even though it was not readily evident that cats were present and the workshop leader for whom our organization paid the AirBnB bill is severely allergic to cats. Impossible for him to stay yet host refused to refund a dime. Poor service.
Reach out to resolution center and have the booking guest leave an honest review.
Here in Boulder CO The auto price is completely absolutely wrong almost all the time. Example. Grateful Dead weekend doubled our towns size. No hotels within 25 miles. Literally only two AirBnB’s in Boulder (my guest cancelled a week out.) Auto price suggestion was $162 night. I got $475 night. Example. Shoulder season, the Hyatt and Hilton were $120 night, auto price suggestions was $162, which the guest would have paid $222. Literally twice as much as the Hilton and Hyatt for a one bedroom studio. Auto price suggestions here in Boulder are always wrong, way too low or way too high. Far more effective is go to Hotels.com, filter for within 5 miles of whatever (city center, special location, your location) and see what the local hotels are doing.
I see nothing about understanding how to price against profit margins. If an investor isn’t pricing against profit margins, then they don’t understand their Avg daily Op cost which then means they are likely pricing soley based on software recommendations…..not all bad but pricing professionally means that you are protecting profits and increasing occupancy.