How to set my Airbnb price
First things first. Before we delve into finding the right price for your Airbnb, it’s important to know how to set a price for your Airbnb. Follow the steps below to update your default pricing.
Step1: Click this link to go to your listings on airbnb.com.au Step2: Click on Pricing at the top of the page. If you have more than one listing, be sure to select the correct listing from the dropdown. Step3: Click on Edit and enter your nightly pricing. Step4: If you would like to update your Cleaning fees, go to Standard fees and charges. Step5: Click Edit next to the Cleaning fee. Step6: Enter your desired cleaning fee and click Save.
Remember to disclose any other fees as well. If you allow pets in your Airbnb, be sure to note an additional pet cleaning fee upfront. The same goes for any additional late check-out or early check-in fees, etc.
How to Create an Airbnb Pricing Strategy
It’s no secret that the short-term rental market offers a higher rental income for property owners than the traditional long-term rental market. Airbnb allows property owners to take advantage of price surges over holidays, long weekends, and festivals. It may be a bit more effort, but the reward of higher earnings make it worth it. One of the highlights of Airbnb is that you charge the guests for cleaning your property and a cleaning fee is a standard extra charge.
Take advantage of Airbnb’s flexibility by changing your prices whenever you see an increase or decrease in demand.
Know your neighbourhood market.
Websites like Airdna.co provide insightful data into the average and top-performing properties in any area or city around the world. When searching the average Airbnb nightly rate in Sydney, Airdna showed an amount of AU$190 during low season and AU$235 during peak season in December. Their data also shows that in Sydney, around 86% of short-term rentals are on Airbnb with 5% of rentals listed on Vrbo. A low 9% are listed on both platforms
Airbnb pricing strategy is a key player in your Airbnb business. You have to make sure the price defines the maximum value of the product and at the same time it must appeal to the customers. Similarly, for your Airbnb listing, you have to find the best pricing strategy. You shall neither under-price nor overprice your listing. If you under-price, you lose value and if you overprice, you lose customers.
The direct impact of your Airbnb pricing is the number of bookings you receive. Pricing is probably the first detail that a potential guest will notice. It will decide the first and last impression. If your strategy is in the right place you will experience an optimum number of bookings otherwise the vacancy rate tends to be high. Airbnb pricing can affect your reviews and ranking as well. If you hide any costs from the guests then they tend to leave a bad review and if you charge more than you are offering then you tend to lose the number of bookings and indirectly you lose ranking in the search results.
Airbnb pricing strategy is an integral part of your business plan and you should carefully draft the strategies considering all the different types of strategies, the factors to consider, the different elements in Airbnb pricing, and the methods to manage the pricing strategies.
Most Effective Pricing Strategies
Maximum Fill Rate Strategy
In this strategy, you will have to play along with your competitor’s pricing strategy. You will attempt to offer the best experience in the area. Your aim will be to ensure the maximum occupancy rate. For this, you will have to offer more value than other properties in your region. The nightly price will be less than the average, but your income will be stable. You have to offer to your maximum capacity in order to ensure maximum filling.
Maximum Rate Per Night Strategy
As the name suggests in this strategy you will set a high rate for nightly charges. This strategy will help you to increase the net profit from individual bookings. The number of bookings will be less, but the income will be satisfactory. The aim is to ensure maximum profit with lesser effort. If you use this strategy, then your fill rate will be low but as an advantage, you will have to deal with few guests.
Long-Term Rentals Strategy
In this strategy, you set the Airbnb pricing strategy according to the long-term rentals (monthly rates). This strategy will require a rental agreement and maybe a house tour before confirming the booking. You will have to work on promotions of the listing, but management efforts will be reduced. It also helps you to minimize risks in the highly regulated regions.
Balanced Airbnb Pricing Strategy
This is an integrated pricing strategy. You will wisely combine all the three-pricing strategies in order to efficiently manage your business. In this, you will have to adopt a dynamic approach. You will change your pricing strategy according to season and demand. For instance, in the seasons with low demands, you can employ a longer-term rental strategy for reducing the risk of vacancy. Whereas during the seasons with increased demands you can practice a maximum full rate or maximum nightly charge in order to ensure maximum profit.
When is the right time to lower your Airbnb nightly rate? How can you guarantee that your short term rent is rented out all year round? It can be really tricky to get your Airbnb pricing strategy right and you’ll find that hosts have different approaches when it comes to maximising their earning potential. We have put together a quick guide that will help you nail your Airbnb pricing strategy.
Step 1 – Know your financial limits
A scenario: ‘Sarah’ borrowed a considerable amount of money from the bank to renovate the barn in her garden. She spared no expense when it came to styling it with gorgeous vintage furniture, installing the latest smart technology and adding special touches. Her goal? To turn the barn into a lucrative Airbnb business.
Step 2 – Understand the platform
As an Airbnb host it’s also important you educate yourself about the way the platform works and how you can get the most out of it.
The good news is that if you are completely new to the holiday rental world and have no clue what price to list your property, Airbnb will suggest a base price for your listing. This price is calculated by taking into consideration your property details such as the number of rooms and whether it has outdoor features like a large garden or swimming pool. Airbnb will also take into account your location and similar properties in the area.
Step 4 – Dynamic Airbnb pricing is the way to go
One of the biggest mistakes a new host will make is that they will set their nightly rate and walk away. If you’re keen to optimise your revenue, then you should adjust your nightly rates according to market demand. If you see that other rentals in your area are being booked out for a certain week due to a major event, increase your pricing. If you know that apartments are left empty over the winter in your neighbourhood, reduce your price in order to encourage bookings. You should also consider different rates for popular days of the week such as Friday and Saturday.
Step 5 – Don’t forget the cleaning fee
The Airbnb cleaning fee is an additional charge that hosts can work into their pricing. The fee is set per stay (not per night), and will be listed separately on the final pricing breakdown.
Many hosts use the cleaning fee to offset the cost of cleaning services, laundry, or maintenance, but it can also be used to boost a host’s income. Test increased cleaning fees and monitor if it affects your bookings, but keep in mind what message you’re sending to
Step 6 – Optimise your revenue
Airbnb pricing strategies can vary depending on the type of listing that you are managing. A pricing strategy that’s effective for one host, will be less effective for another. Here are some basic strategies and reasons why they suit particular Airbnb properties:
Step 7 – Get the help of an Airbnb expert
GuestReady uses a range of innovative online tools to help Airbnb hosts remain competitive in the market. Our goal is to optimise the revenue of our Airbnb hosts to ensure that they are getting the most out of their investment property.