Are you looking for amazing multiple six-figure Airbnb pricing tips? If so, having generated over half a million dollars while hosting on Airbnb, I think I can help you with that. 🙂
You’ll agree that it feels awesome to watch your Airbnb calendar fill up very quickly. You’ve worked hard to make your place beautiful, your Guests are happy leaving 5-star reviews, and everyone wants to book your home. But did you know that a calendar quickly filling up months ahead is a sign that your Airbnb pricing is set too low?
But did you know that a calendar quickly filling up months ahead is a sign that your Airbnb pricing is set too low?
Sad but true.
Being overbooked several months ahead simply means that you’re leaving lots of money on the table as a Host.
If you are looking to maximize your Airbnb revenue, you have to understand that many bookings ahead of time don’t necessarily mean more money in the bank.
Let’s say you are currently renting your home at $100 a night for 30 days a month and at this price, you are booked solid months ahead, making $3000 a month.
But what if you try experimenting with your Airbnb pricing and test it out for $150 a night instead? And at this specific rate, you suddenly discovered that it would constantly be booked for 25 days a month, one month in advance.
If you do the math, you’d be making $3750 a month, instead of $3000, which is 25% more income for 17% less amount of work. This means an extra $9000 in your pocket in over a year – on just one listing!
Being wise with your Airbnb pricing is one of the most efficient ways to maximize your Airbnb income.
Interested in my Airbnb pricing tips?
Airbnb Pricing Tip #1: Research the True Value of Your Home on Airbnb
When creating a new listing, Airbnb suggests a nightly price for your home and this price tip generator seems to enjoy lowballing prices. Actually, based on countless listings that I’ve created in the last few years, Airbnb’s prices are always too low.
Pricing is a crucial part of building a successful listing and you can’t just blindly price your home on Airbnb.
So all Airbnb Hosts should spend some time researching and comparing their own prices to those of competitive Airbnb listings around their area.
To learn how to do that, watch this video that will teach you how to find the true value of your home on Airbnb.
Then, use my market research techniques to study your competition and discover how much other Hosts are charging for similar listings in your area.
Make sure to check out their calendars to see how early they are booked and at what price.
Pay attention to their weekend pricing versus weekday pricing since this will help you establish your own your Airbnb pricing.
If some of the listings you encounter in your research are booked way ahead of time, the Hosts are probably amateurs in need of Airbnb pricing tips, as it’s definitely a sign that their prices are set too low.
Airbnb Pricing Tip #2: Kill the Competition with Lower Prices for the First 5 Bookings
If you want to win the Airbnb game, you have to ask yourself this question:
Why would any Airbnb Guest risk booking with a new Host that has no reviews, versus an experienced Host with hundreds of positive reviews on his listings?
The answer is simple: cheap prices.
Put yourself in the perspective of the Guest.
Guests who prepare their trip months ahead will often try to get the best Airbnb pricing for their stay. If they see that your home is priced cheaper than any other similar listings in your area, they will snatch it a year ahead of time if you let them do it.
Low pricing is the fish bait for Airbnb Guests!
To kickstart your listing, start with lower prices to quickly attract your Guests.
Actually, you could test Airbnb’s pricing tips since their suggested pricing always seems to be too low.
As soon as you book a few Guests and get a total of about 5 reviews, start raising your prices slowly to bring your Airbnb pricing to real market value.
If you still book up too fast, you’re probably priced too low.
If you haven’t booked fast enough, you’re priced too high.
Take note that several great positive reviews will convince even more Guests to book with you so keep experimenting with your Airbnb pricing.
To win at the Airbnb game, you need to have fun playing with your prices!
Airbnb Pricing Tip #3: Set Higher Prices for Weekends, Peak Season & Special Events
Have you ever stayed at the Hilton?
If so, you must have noticed that hotel pricing is set higher during busy times of the year than off-peak periods. Experienced Hosts use the exact same pricing strategy to maximize monetization of their properties on Airbnb.
In the short-term rental market, weekends, holidays, special events and peak season bring in more Guests.
In economics, the law of supply and demand states that in a competitive market, the unit price for a particular good will vary until it settles at a point where the quantity demanded (at the current price) will equal the quantity supplied (at the current price), resulting in an economic equilibrium for price and quantity transacted.
In short, higher demand with not enough supply equals higher prices.
Unless you’re living close to a ski resort, summertime will be busier than winter so you should raise your prices for the warm season.
Are the Olympics coming to town?
Make sure to double, triple, or quadruple your prices ahead of time for the duration of this once-in-a-lifetime event.
Is it Christmas in 6 months?
Raise your prices for the Holidays today.
Airbnb Pricing Tip #5: Stay Away From Airbnb’s Smart Pricing Tool
While this tool might work for new Hosts who know nothing on how to maximize their income on Airbnb, right now, I personally do not use Airbnb’s smart pricing tool because it seems to behave as if it was totally stupid.
Time Magazine said Airbnb Hosts will Never Have to Set Their Own Prices Again while some Hosts call this tool a disaster.
I totally agree.
For fun, I’ve tested it (again) on my calendar earlier this year for the upcoming summer and on some nights, it was suggesting me prices that are about $100 a night cheaper than the true market prices for my listings.
This means that if I were going to use to this tool, I would have lost tens of thousands of dollars this year simply because of its inaccuracy.
You might say: But Dany, Airbnb is an intelligent commission-based service. Why would they be so stupid and suggest such lower prices that would undercut their revenue?
I have two theories on this:
#1 – Either this tool is still so new, that it can’t provide accurate pricing, yet.
#2 – I’m not a conspiracist but there could be an Airbnb growth strategy hidden behind that.
Knowing Airbnb, I would not be surprised if they would motivate new inexperienced Hosts to use the so-called Smart Pricing Tool to automatically price their homes lower than real market value, having a double impact on the bookings.
First, this makes the new Hosts happy, because with low Airbnb pricing, their places book all the time. The new Hosts quickly become addicted to the new income Airbnb is providing, turning them into lifelong customers.
Second, with such low pricing, Airbnb can undercut hotels who usually have higher rates and are taxed. Airbnb knows that once a Guest tries Airbnb for the first time, this Guest is also more likely to become a lifelong customer, who might even stop using hotels to always book on Airbnb.
Actually, this new Guest could even become a Host!
Am I Crazy?
No, I think I’m smart. 😛
Airbnb loves to invest in a long-term vision for the company and has hired brilliant people who are seeing 100 years in the future.
I think it would be very intelligent from them to use such growth hacking strategy – at the expense of new Hosts.
Airbnb Pricing Tip #6: Test An Intelligent Pricing Service Like Wheelhouse
If you are looking for an intelligent Airbnb pricing tool that will automatically price your listing right every night and allow you to maximize your income at all times of the year, make sure to read this intelligent Airbnb pricing blog post about Wheelhouse.
There are several different Airbnb dynamic pricing services available on the market but most of them lack ways to fully control your dynamic pricing automation.
I’ve actually tested a few of these services myself and they usually charge a 1% fee on your earnings, which can be an excellent investment to maximize your income – if you know how to use such tools wisely.
I’m currently using Wheelhouse because they have so many properties on their platform that are constantly feeding their robust pricing algorithms with rich data. In fact, their algorithm analyzes about 10 billion data points a day to determine the best rates for your Airbnb listing.
So their pricing solution is very different than the Airbnb Smart Pricing Tool, which applies the “one-size-fits-all” mentality.
Also, I have to let you know that Airbnb is a marketplace, just like eBay.
And marketplaces, fundamentally, are not designed to price inventory for their suppliers.
Imagine if eBay was setting all the prices for the transactions on their platform.
Letting such the web platform dictate the market price of a good or service simply doesn’t make sense for the “seller” and this also applies to Airbnb where the seller is the Host.
There are so many different host types with different needs and Wheelhouse designed their pricing engine to give each and every user the tools and levers they need to build the business they want.
By the way, I was able to manage a deal for the AirbnbSecrets readers who are interested in testing Wheelhouse so make sure to read this detailed blog post if you want to access this unique offer.
My Multiple Six-Figure Airbnb Pricing Tips Conclusion
In conclusion, even if you start using an intelligent Airbnb pricing service like Wheelhouse, you absolutely need to do your own Airbnb market research and test with different prices at different times of the year to know the true Airbnb value of your property.
It’s the only way to maximize your Airbnb revenue as a Host.
As a rule of thumb, if your average occupancy is lower than 80%, your listing may be priced too high so consider lowering your prices to make your listing more attractive. If your average occupancy over the last few months was higher than 90%, your might not be charging enough money for your place so consider raising your prices. Keep testing the Airbnb market to determine the higher amount that guests are willing to pay for your listing at different times of the year.
Being 50% booked one month ahead of time is actually a good sweet spot to aim for, as many Airbnb Guests are looking to book last minute and they are willing to pay top dollar for a nice listing with awesome reviews.
What is YOUR Airbnb pricing strategy to maximize your income as a Host?