Host FAQs: Pricing
Pricing is one of the most important and complex aspects of generating revenue on Airbnb. At the beginning, there can be a learning curve as you experiment with strategies for maximizing your income.
Hosts often ask how much they should charge per night, hoping there is a one-price-fits-all answer for their unit. However, revenue potential for each unit varies great by season, day of the week, and regional factors. In order to make the most of your STR, it’s important to adjust pricing according to demand.
When it comes to setting a pricing framework, you have two basic options.
Third Party Pricing
You can sign up for a third party dynamic pricing tool such as Pricelabs or Wheelhouse. These services aggregate Short Term Rental data in your region and adjust the price of your unit according to booking trends.
If you want to maximize pricing on your unit, it takes a ton of understanding of your market, and a different price for nearly every night of the year! Needless to say, this can take a lot of time, research, and comes with a learning curve if you choose to handle all pricing yourself. That’s why I highly recommend signing up for a third party pricing tool that will automatically do the market research for you, and price your unit much more accurately because they are using market data. Many hosts see their revenue increase by 20-30% when they switch to a data based pricing tool.
Airbnb Pricing Tools
If you’d rather not integrate a third party pricing tool into your system just yet, you can choose to use Airbnb’s pricing tools to manage your listing.
There are three basic pricing options within the Airbnb Platform.
Smart Pricing. You’ll choose a maximum price, and a minimum price, and Airbnb will automatically set your pricing based on demand, using those parameters. If you choose this option, you can still override these settings by customizing specific dates as you see fit. Smart Pricing can be a helpful tool, but because Airbnb serves both the guest and the host, Smart Pricing tends to favor the guest with a deal, rather than the host with a premium price.
Default Pricing. You can choose to turn off the Smart Pricing option and select a base price that you prefer. As your calendar opens, this will be your automatic price unless you override it. You can also set default weekend prices that will automatically price weekends only.
Custom Pricing. You can choose to customize the price of every date on your calendar, or override your Smart Pricing or Default Pricing as you see fit.
My Pricing video includes a quick tutorial to walk you through Airbnbs pricing settings. Start at minute 3:12 to go straight to the pricing tutorial.