So far, we’ve talked about some of the steps when first getting started as a host on Airbnb, now let’s get onto the hot topic of pricing strategy! Airbnb has implemented a new machine learning algorithm that automates your pricing strategy if you choose, but it is worth knowing what goes into making that decision.
Just starting hosting? You will have very few or no reviews, so your credibility will be low until you can get some people in the door. The way to get them in the door is to price your listing strategically (low)! You must start low in order to attract people and build your reviews. The short-term frugality will enable you to build your credibility and charge more later with all your positive reviews.
Alright I’ve got some reviews and am booked for the next month! Now what?
How exciting! Now it’s time to strategically price your listing. However, this can get tricky: too high and you will deter potential guests, but go too low and you will miss out on the profits of hosting. You should start raising your price after you have a solid month of guests booked, and adjust accordingly for the following 5–8 weeks. Set your ideal base price and test it, adjusting it until you find the sweet spot!
Long Term Pricing Tips
Don’t Price Weekdays the Same As Weekends—This is a principle of travel and tourism, it’s just the name of the game.
Be Aware of Events, Concerts, Conferences, etc. In Your Area—There will be a shortage of supply and increased demand, adjust your price accordingly. For example, a host in Philadelphia has a listing for $75/night, but the Pope is coming and should raise it at least 100%+.
Think about it this way, if it’s summer the rates are really cheap to stay at a ski resorts. If it’s winter it’s really cheap to stay at the Jersey Shore. Be mindful of your “hot season” where traffic is highest/lowest and price accordingly.
Need help figuring out your pricing strategy? Check out the Airbnb Host Pricing Tool Calculator from LearnAirbnb.com: http://learnairbnb.com/airbnb-host-calculator/
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This article originally debuted as an email newsletter to our Weekly Digest subscribers on 07/27/2015. If you’d like to receive our weekly newsletter featuring hosting tips, tricks, and resources please subscribe on our home page.