Airbnb Hosting: Avoiding Common Pricing Mistakes
If you’re hosting on Airbnb, pricing your property correctly is essential. Not only will it affect how much money you make, but also the types of guests you attract and whether or not your listing is found in search results. This article will explore some of the common mistakes hosts make when it comes to pricing their properties and provide tips for getting your pricing right. By following these guidelines, you can ensure that your listing is priced competitively and attract the right types of guests.
Why setting your Airbnb pricing strategy is so important
Pricing your Airbnb isn’t a set-it-and-forget-it situation. You need to stay on top of the market and adjust your prices accordingly. If you don’t, you might find yourself not getting booked or attracting guests who aren’t a fit for your home. Paying attention to pricing will not only greatly impact how your calendar looks it will also set the tone for your guest’s expectations during their visit.
The cost of your Airbnb will impact your guest’s expectations
It’s important to remember that the cost of your Airbnb will impact your guest’s expectations. If you are charging a high price, they may expect first-class service and amenities. On the flip side, if you offer an extremely low price, this may give guests the impression that your property is lower quality than it really is. You would expect an ocean-front mansion in California to be at least $5,000 nightly, not $250 nightly price? The same thing goes if you charge $5,000 your guests will expect something magical (or access to something really limited).
Pricing that’s way outside expectations makes people think they’re being scammed and that’s a terrible way to start a guest experience.
Pricing (and expectations) affect your Airbnb reviews
There is an entire section of your reviews as a host that asks guests about “value” and what that correlates to is how much their reservation costs them. I have yet to meet a guest that appreciates paying high prices but if you deliver on the value your price point is representing you will do just fine on pricing.
If your price is too high, you’ll run into guests that feel ripped off and leave bad reviews. If it’s too low, you may attract budget travelers who are looking for a bargain – this can lead to rude or unruly behavior, which will also result in poor ratings.
Tips for setting an appropriate Airbnb price
Now that you understand the importance of pricing your Airbnb correctly, let’s look at some tips for getting it right:
Setting an Unrealistic Price for your short-term rental
I understand what it feels like to look at all the Airbnbs that seem endlessly booked at $400 nightly price and think to myself “I should be charging that for my duplex.” However, if you set a price that’s completely out of range for your type of Airbnb you will have nothing but problems. You won’t get booked and if, by some miracle you do, your guests will torture you with complaints.
Not Doing Enough Research for your short-term rental
-Do your research: Before setting a price, do some market research to see what other similar listings are charging. This will give you an idea of the going rate and help you set a competitive price.
-Don’t become too attached to your prices: Keep in mind that market conditions change, so you may need to adjust your prices from time to time.
– Promote seasonal discounts: To attract more guests during slow periods, offer special discounts for specific dates or seasons. This will help keep your calendars full and increase your income
What price point should I start with to optimize my Airbnb listings?
Airbnb’s algorithm takes in several factors when deciding which listings they are going to show. While many factors will determine whether or not your listing shows up, a good starting point for pricing is to charge about plus or minus 10-30% of the median price of similar listings in your area. This will help ensure you get found on Airbnb’s search results and have a chance of getting booked.
Pricing isn’t the only factor for search engine optimization, but it’s a major one for sure. Reviews, high-quality photographs, amenities, and location also play a huge factor in how your listing is found by guests. Pricing is easy to overlook in the process.
Tips on Attracting High-Quality Guests and Increasing Bookings
Remember attracting high-quality guests is all about striking the right balance between the type of accommodations you have, how you communicate to your guests in your listing description and details, and the total price a guest pays. If you want to attract the right guests make sure you’re speaking directly to what that person is looking for during their travel, and pricing it a little above what the competition is doing.
Remember the total price a guest pays is going to be significantly more than your nightly price. It’s going to include: service fees, cleaning fee, extra guest fee, a security deposit, etc.
How to Avoid Overpricing or Underpricing Your Airbnb Listings
I regularly find myself overpricing my Airbnbs. I’m guilty of trying to make more money or being a bit too optimistic about the demand in the market. On the flip side, I’ve also gone through periods where I got too excited and underpriced my listing slightly. Both can lead to problems if you’re not careful. In order to avoid overpricing or underpricing your Airbnb listing, set a reasonable price that reflects the market rate and make sure you monitor your reviews and ratings. If they start to dip then it’s probably time to readjust your prices.
What are your motivations with your Airbnb?
If your Airbnb is dedicated to guests only, meaning you’re never going to stay there, then you will want to make sure you’re aggressively priced for a high-occupancy rating. We have a cottage near Duke University and I would prefer that listing is booked 24/7. On the other hand, our beach vacation rental is in a location I love to visit so I’m okay taking a hit on occupancy so I can personally enjoy my beach house. So the first example I’m probably pricing a little lower than the latter where I’m always more expensive.
Benefits of Having an Accurate Price Point on Your Airbnb Listing
When you charge the right price for your Airbnb listing, you will naturally attract the type of guests you want and be rewarded for it. You’ll have fewer complaints, higher ratings and reviews, and ultimately more bookings. So take some time to figure out what price works best for your location and type of rental. Knowing the correct prices to set will not only help you to optimize your Airbnb listing, but it will also bring in more travelers and higher-quality guests.
Common Mistakes to Avoid When Pricing Your Airbnb Property
-A common mistake when pricing your Airbnb is not accounting for the additional fees that guests may have to pay. It’s important to stay aware of these extra costs and make sure you are factoring them into your rental prices.
-You don’t set your pricing and never adjust it again.
-Don’t charge way outside the median range of pricing in your area for the type of listing you have.
-Make sure you deliver the experience guests are going to expect at your price point.
-not utilizing weekly or monthly discounts
What is Airbnb smart pricing?
Airbnb has a feature called “smart pricing” which is a tool that suggests prices for your Airbnb listing based on local rates, availability, and demand. It’s the same principle as dynamic pricing in other industries like hotels and airlines. Smart pricing can help make sure you’re not losing money by setting prices too low or losing bookings by setting prices too high. It’s important to remember, however, that this feature simply provides suggestions and you will still need to manually adjust your prices for special events or holidays when the demand is higher than usual.
In Conclusion
Pricing your Airbnb is an important part of the process when you are trying to maximize your bookings and attract high-quality guests. Taking the time to understand what works and what doesn’t when pricing your Airbnb listing will pay off in terms of more bookings, higher occupancy rates, and better reviews from happy customers. With careful price optimization, you can ensure that your Airbnb listing stands out from the competition and that your guests receive the experience they deserve.
Good luck! 🙂
