OK, so by this point you’ve researched short-term platforms, checked your laws, cleaned your place, and taken nice photographs. Now it’s time to set your price.
Go too low, and you’ll look like a sucker; go too high, and your place stagnates among the competition.
No worries, we can help you get the most bang for your buck. Here’s how.
1. Do Your Research
Know your competition. Search Airbnb for similar properties in your neighborhood and review the places (and rates) that are getting booked. This may be way obvious, but if you have a one bedroom, compare it to a one bedroom (and not a private room in a larger place or an entire house). Likewise, if your place has certain amenities (parking, laundry) that others don’t, find other places that share these extras. Consider proximity. Just like in real estate, it’s about location, location, location. So start your search in your neighborhood, and move out from there.
2. Be a Sucker
Price low, then high. Until you have reviews, you lack credibility—so incentivize someone to try you out. For this, we support moving your prices 10–15% below market average. This will help increase your bookings quickly, which will lead to reviews, which will lead to a higher page rank.
We happen to think that Airbnb posts you at the top of search results when you’re new. We believe they do this because they want you to get booked, so you feel good about the service and continue to use it. That said, there’s a lot more competition these days, and being new and undercutting your price may not do the trick. For this, we have also heard about new listings utilizing smart pricing to increase their rank.
Smart pricing is an algorithm Airbnb sets based on local demand and prices. Just this week we heard from someone who listed his new place, manually cut his prices, and was still showing up three pages deep. After turning on smart pricing, he jumped to the third result, even though the price was $5–$10 more than that of his manual pricing. (Side note: we recommend turning off smart pricing once you have a few reviews, because Airbnb will keep your pricing lower than it needs to be to ensure everyone is getting booked and business is booming. After a month or two (or 10 reviews), you’re better off returning to manual pricing.)
3. Post a Higher Rate on a Secondary Platform
Once you know your sweet spot, you should stick to it most of the time on Airbnb (except for during big events, which we’ll discuss later.) That said, there are other platforms that you can also post on, and at a higher rate. The logic to this is that you’ll likely get booked on Airbnb at your set price, so why not list the same place somewhere else (like VRBO) for a much higher rate and see if you have any takers? If someone bites, you can block it on your Airbnb calendar and pick up a few extra bucks. Side note: some other platforms (ahem, VRBO) collect annual fees or charge more per booking, so just make sure you cover that cost when you set your price.
4. Later Dates, Higher Rates
This logic is similar to posting on a secondary platform. Basically, you know that your place is going to get booked once you move it to your set rate, but there’s no reason to do that for bookings in the distant future. If you’re place is booked two to three months out, you should bump those prices up and try to catch the person who is planning a vacation way in advance and may like your listing enough to pay extra. If you don’t get any takers, you can move your prices back down to the normal rate for one to two months out.
5. Big Events, Big Returns
As hotels have long known, people will pay more during big events because they don’t have a choice. You can likely raise your prices around major summer holidays, New Years Eve, three-day weekends, sporting events, big-name concerts, etc.
Good luck, and let me know how it goes!