It can be quite daunting to work out you pricing rules with Airbnb. I use 2 Airbnb strategies to make more money and you can use these too!
Airbnb allows you to set pricing for each day. This doesn't mean you have to customize the pricing on a daily basis, you can also set the base rate which will be replicated across all available days. This makes it really easy to set your pricing, but it does have some issues. The main one being:
You need to maximise the price you are charging!
Automated Pricing Strategy
Automated pricing is where you take the first step into maximizing your revenue; and Airbnb Smart Pricing and Beyond Pricing can help you achieve this!
Airbnb Smart Pricing
Airbnb has there own smart pricing system that allows them to take control and set the pricing. This means that the price will fluctuate and will be set on a price they determine will give you the highest chance of making a booking. The idea is that the price is set on an active basis by the supply and demand.
Beyond Pricing is fantastic! Your set your base price on your property and Beyond Pricing takes over an sets the pricing based on a point system.
How the point system works is it takes seasonality, events and a few other pricing factors and then sets the price higher or lower from your base price as a result of these factors.
This allows your price to be set to increase your price in the good times and decrease your price when you are less likely to take a booking.
Beyond Pricing does charge for this service and it is 1% of the booking total price. I think this is a great deal as you will increase your margins and gain more booking using their service and they take a very small commission to help you automate and manage this.
Best of all they also offer a free trial with no fee for any bookings. Take advantage of this, I sure did!
Find out more:
The Discount Strategy
The missing ingredient to automated pricing is that it does not take into account your volume or your occupany rates. This is an important thing to monitor and control when managing your property as you want to fill your property up with as many bookings as possible.
Think to yourself what almost every hotel, resort, motel, etc does: they discount their rooms in order to fill it up.
This can have a big impact on your property being profitable at all and finally breaking the cycle into making money through your property.
Take a look how it can impact you:
As you can see by this example, I have a total of 80% occupancy rate (only an extra 20% ) using the discount strategy; even though without the discount strategy I have a higher occupancy rate at the full price. Using the discount strategy, I made an extra $630 for the month as a result of filling availability at a discounted nightly rate.
As you can see by the result. This strategy is the key to increasing your margins and reaching your goals of running a profitable BNB service.
What do I do?
I personally use both strategies and manual monitoring. The steps go like this:
Step 1: Research pricing on properties in my area for supply, demand and to see what my competitors are charging.
Step 2: Set my base price in Beyond Pricing and sync to allow Beyond Pricing to change the prices.
Step 3: Update the base rate to days that have availability that are not being booked (being selective) using the Airbnb discount strategy.
Step 4: Repeat steps 1 to 3 regularly.
If you want to make money with your property, you need to treat it as a business and always think about everything from your guests point of view.
Find out more about Beyond Pricing: click here.
Find out more about Airbnb hosting: click here.