Pricing Your Airbnb Listing

Knowing how to price an Airbnb can be a challenge for a new guest host and it’s a question that can make or break your STR business. If you don't get your nightly price right, you’ll never make a profit. But if you do manage to adjust your pricing to the perfect rate, your property will practically sell itself. What you need is the right Airbnb pricing strategy and some tips on how, why, and when you adjust your rates.

If you’re looking for ways to make your listing stand out and increase your occupancy, adjusting the nightly price on your Airbnb listing can allow it to stand out from the competition, especially if your property offers many of the same amenities as competing rentals. If you’re a new STR property manager, there are some tips and tricks you can try that will help you adjust your rates like a pro and stay on top of market demands. 

Navigating the Airbnb Platform

Airbnb allows guest hosts to set rates, choosing from regular default rates to custom options based on the time of week or month. This allows guest hosts to increase or decrease the price based on the competition, upcoming events, weather, time of year, and more.

To make your listing more appealing to potential guests, you can also set up the length of stay pricing, which will allow you to set a discount based on the guest's length of stay.

Length of stay discounts are part of every short-term rental property manager’s strategy. You can set up weekly or monthly discounts that will pay off in the long run. Doing so can increase your occupancy rate and will help you cut down on operational costs.

If you’re not sure how much of a nightly price discount you should give, do your research and learn what other property managers are doing in your area. The discount can vary based on location, however, 10% to 20% discounts are common.

Understanding Your Airbnb Price Breakdown

Many factors will affect the nightly price of your rental property. For example, there is a base price per night. You can set the base price and also charge an additional fee per person.

You will also need to take into consideration how much it costs to clean a rental property after a guest has checked out, and factor that price into the cost.

Keep in mind that Airbnb also charges a fee for guests to use their service. The total price charged will include the base rent, cleaning fees, charges per guest, the Airbnb service charge, and taxes.

Changing Your Pricing Settings

You can change your pricing based on special events, or the demand for listings, or adjust the average price based on similar properties. 

On the Airbnb platform, the first step is navigating to the area that allows you to manage your settings. In this section, you can adjust the price settings from the calendar and include additional charges, promotions, set discounts, and the normal rate.

Price adjustments can be made on your desktop or your Android or iOS device. 

To make these important changes utilize the tools located at the top. Choose the pricing tab to make custom changes for specific times of the week or month.

Choose from the following options:

  • Monthly
  • Weekly
  • Nightly
  • Weekend

Make sure you click save before closing the browser.

How to Charge Extra Fees

If you’re looking for ways to increase your Airbnb rental income you may want to consider charging an additional guest fee. This guest price is optional and allows STR property owners to cover the added cost of hosting more people, offering value for guests traveling in small groups or alone. This fee will help cover the added cost of wear and tear on the property, cleaning expenses, and laundry. If you’re not sure what to charge for your additional guest fee, pay attention to what other STR property owners are charging for similar accommodations.

How to Set Discounts

Airbnb offers guest hosts a variety of discounts to choose from, each of which can increase your bookings. One of the more popular options is the new hosting promotion, which allows property owners to offer a 20% discount for the first three guests who book the rental within thirty days.

Airbnb also allows property owners to offer discounts that come with certain criteria. On the pricing tab located in the host dashboard, you’ll find the last-minute discount, which allows property owners to automatically adjust their price by a fixed amount or a percentage, for reservations that are made within a certain period before the guest arrives. This discount can be set for 0-29 days before arrival.

The custom pricing promotion option allows property owners to create a unique promotion for special dates that can increase bookings during downtimes or make their listing stand out during the peak season. Airbnb recommends creating a promotion for a minimum of seven consecutive nights to increase the chances of a listing appearing in the search results.

The early bird discount gives a guest incentive to book further in advance. This discount option can be found under the pricing tab and works the same way as the last-minute discount. However, instead of giving guests a discount within a certain period close to their arrival date, this discount is only available for potential guests who book their stay before a certain window. You can choose either a fixed amount or a percentage for your discount and specify a window of time from 1-36 months before guest arrival.

You can also choose discounts offered on a weekly or monthly basis. 

The extended stay discount, also found under the pricing tab, is a weekly or monthly discount offered to guests if they book the space for your specified number of nights or longer.

Creating and Setting a Pricing Strategy

To set a profitable and fair price for your rental, you’ll need to account for the costs required to operate your rental.

This can include:

  • Cleaning costs
  • Maintenance
  • Taxes
  • Mortgage
  • Utilities

When calculating your break-even cost, you should total the monthly expenses, divided by thirty. Keep in mind that most Airbnb hosts add a cleaning service fee on top of the nightly rate, so it’s important to exclude the cleaning fee from the nightly cost.

Next, determine what your minimum nightly pricing should be. To ensure you’re not just covering expenses, but also making a profit, this figure should surpass your costs. To determine your nightly rate do your market research to ensure your pricing is competitive.

Explore other listings in your area that offer similar features and value and take into consideration the:

  • Location
  • Amenities
  • Facilities
  • Number of bedrooms and beds
  • Property type

The average rate of similar properties can be used as a benchmark for your pricing strategy and ensures you offer competitive rates. 

Prices on Airbnb are subject to fluctuation based on demand. Be mindful of low and high seasons in your area and adjust your pricing accordingly.

By doing your research and monitoring the prices of competitors, you can create a pricing strategy that makes your property stand out from the competition.

Contact Us Today! 

Creating the perfect pricing strategy for your Airbnb takes time and energy. To make a profit and thrive in the highly competitive short-term rental market, you must adapt your pricing approaches for a variety of reasons. If you’re searching for a hands-off way to run your short-term rental property, consider working with Vello, a leading short-term rental property management company that can handle all the leg work. While you focus on your life and enjoy your passive STR property income, let Vello problem-solve for you and handle every aspect of your STR property, including setting the perfect rate to encourage more bookings. To learn more, contact the team at Vello today.

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