Enhance your pricing strategy with Host Advisory Board top tips

[Jenny]

Hi everyone,

We all know that pricing is something that is very important to all Hosts, even more so in our current economic situation. 

We asked Host Advisory board member and 10 year Airbnb Host, @Daniel1651 , to share his thoughts on pricing and making the best of every opportunity possible to maximise your earning potential. We hope his tips are useful to you when you think about your pricing strategy.

Introduce yourself please!

I am Daniel Chamillard from Tenerife, Canary Islands. Spain! I have been Hosting since December, 16th. 2012. I have been a Superhost, 8 years in a row, since the programme started in 2014 to date, 2 years as Superhost Ambassador and have just started my 2nd year as an Airbnb Host Advisory Board member.

What do you wish you knew about pricing before you started Hosting on Airbnb?

When I started, I didn't know much about pricing and gradually, with time and experience, I learned how to get more out of my listings. Ten years ago there were not so many options available in the system and, if I were to start again, I would like to know what tools I have available and how I can use them to achieve my goals as a host.

Could you share your strategy for setting your price? 

I will gladly do so, warning (although it may seem very logical) that strategies do not work the same for everyone and that there are no magic recipes. 

Each host must previously establish their objectives by being aware of the environment surrounding their listings. There are internal factors (motivations, needs and/or expectations) and external factors (type of property, seasonality of the destination, market behavior, etc.) that will condition our general strategy and, in particular, our pricing strategy.

In my case, being a solo Host of 4 small properties located on a tourist island with elevated demand, a high percentage of occupancy  is key to obtain profitability at affordable prices in a highly competitive market.

My first task is to set a reasonable expectation taking into account the expenses I will face and the benefits I expect to obtain.  

I am sure that here everyone will have their own answer: from those who have had to create their own job and this is their main activity and source of income (as is my case), to those who expect to get extra money to pay the mortgage, maintain or renovate their house, send money to the family, or even those who want to generate the highest possible profit by comparing other market options.

Secondly, I conduct a study of similar properties in my area which I call my "real competitive set", and which allows me to know the reference price, future occupancy and guest satisfaction through their reviews.

With these three parameters I analyse the average base price and project an estimated monthly/annual occupancy percentage, while obtaining information on the degree of satisfaction that guests have experienced. With this data I finally establish the price based on the characteristics of my listing, the quality and the value I provide as a host compared to other options examined.

What tools do you use to maximise your listing potential?

Among the tools I use on a daily basis I can mention the setting of minimum nights, weekly and monthly discounts, and promotions.

I set a "high" minimum stay that guarantees at least 4 bookings per month. I then use the option to create custom rules to shorten that minimum and get more bookings between two already confirmed. 

I get longer stays by offering weekly and monthly discounts, so that when the guest is visiting my ad they get the caption "this host offers a weekly discount". Usually guests end up booking for a week and that's a small victory 🙂 

Promotions are one of my favourite tools. They allow me to price up for the long term, usually 3 months out, and then have the option to discount if there has been no interest in that time period. In case of not immediate occupancy, I use any of the 4 options, both those that break down the price or show the previous price crossed out, as well as the one that shows a special message or includes the ad in promotional emails that increase the number of visits and improve positioning.

I visit my calendar daily and analyse the prices suggested by the system. In some cases they are usually similar to the ones I offer, so I accept the suggestion directly. In others, I simply take them as a reference to know the degree of supply and demand and act accordingly.

What advice would you give a Host who is concerned about bookings?

We all worry when we do not have sufficient reserves.

Faced with this, we must mobilise ourselves and carry out actions to position our ad, making it more attractive and competitive.

Just as our houses need almost daily maintenance, I understand that the same thing happens with an ad. It is not a matter of creating it and leaving it there, alone and waiting for bookings. You have to pamper it and pay attention to it.

I recommend entering daily to review calendars and move prices, detect market trends, play with promotions and minimum nights, as well as renew photos and redo descriptions; treat our ad as our real showcase because it is. 

Finally, share it and generate traffic to it. 

Get it on the “Wish list” of all those who have the opportunity to see it and want to visit it!

Thank you @Daniel1651  😊

[Elena487]

Very interesting @Daniel1651!

Thanks for sharing your strategies! 

What has worked for me as well:

- Price discounts (weekly, monthly, last minute, etc)

- Custom rules for minimum-lenght stay on calendar when I have gaps between bookings and also setting a shorter lenght-of-stay during low season (i.e. 2 nights on weekends) along with a bit higher price so that increases my chances of getting bookings when the demand is low.

- Reviewing prices almost on a daily basis, if I want my listing to be succesful, I need to put effort and take care of it.

- Airbnb Price tips for certain dates.

I do agree with you, part of our listing success is to check it regularly, changing prices, adapt to offer/demand and to the season, and I love all the tools Airbnb offers to do so, including the Insight/Performance section where I can compare prices, occupancy in the region and among similar listings.

Thanks @Jenny for posting!

Elena

[Jenny]

Hi @Elena487 

Super pleased that you like the post!

Thank you so much for taking the time to add in your own strategies as well.  We appreciate you!

Jenny

[Daniel1651]

That's great @Elena487 , in fact, the professional tools that Airbnb provides us, helps a lot to know the market trends!

Are you using them, right?

[Elena487]

Yes @Daniel1651 , all the Insight and tools Airbnb offers. I would be lost if it wasn’t for them 😄

[Felicity11]

Fantastic article with good practical sensible advice for hosts - Thank you Daniel 

[Daniel1651]

Hey @Felicity11, would you like to share some ideas about how do you manage your prices in Australia? I think it can be interesting if you are using similars strategies or how it works there! Thanks!

[Pam5]

Very insightful @Daniel1651. I have always shy-ed away from using promotions. I bet its time to give them a try.

Thank you for sharing @Jenny 

[Jenny]

Hi @Pam5 

Really pleased you enjoyed the tips!

If you decide to try using promotions, we'd love if you came back and let us know how you got on with it.

Take care,

Jenny

[Daniel1651]

@Pam5 Promotions work very well for me and I think it is a way to prevent our announcement when we know that reservations may decrease.

In any case, it is good to know that we, the hosts, can choose what discount percentage to apply. That is always in our hands and depending on which one we choose we will have more or less benefits (but it always helps, at least in my experience).

All the best and let me know how it works when you start to use it!

[David9517]

This is definitely one of the hottest topics in Airbnb. I have been using Airbnb since 2018 and I shall warn you that I still haven't came up  with the optimal solution to it. Perhaps that is why a lot of what is being said here goes along the lines of "checking pricing regularly" or "daily checking nightly prices". However, I am completely sure that with the data airbnb has and shares among their users there has to be a possibility of automating and optimizing the nightly price effectively.

I know there are third party solutions which I have tried and did work for me in the high seasons, whereas in the low season it didn't do so well...

Regarding Airbnb suggestion on nightly prices, they are usually quite off the market price.

Some people cannot spend so much time checking their listing's rates and figuring out what is the right price to put.

We need something to help us automate pricing effectively (meaning getting the most of our listing according to market demand).

[Jenny]

Hi @David9517 

Thanks for taking the time to share your feedback - I'll make sure we pass it along to the right team.

Jenny

[Daniel1651]

Thanks @David9517 , it's really great to know which experiences work and which ones don't.

As I said in the post, this depends on many factors and it is important to continue advancing in the search for increasingly successful solutions for everyone.

In my case, a few years ago the prices recommended by the system were not very adjusted, as you say, and that is why I used that tool as a "base" to take into account the general functioning of the market at that time. If the suggested price was low, I understood that there was less demand (or more supply) and that allowed me to make manual decisions.

Today, in my environment and in my ads, the recommended prices are pretty close to the actual price, and that's a good indication.

Have third-party tools worked for you? If so, do you know if they took local parameters into account, such as certain dates of high occupancy due to local festivals, or events in your city?

And thanks @Jenny Jenni for forwarding the comment to the appropriate team!

[David9517]

I have indeed worked with third-party tools (i.e. pricelabs). They do take into account the mentioned parameters (local events, nearby occupancy rates, quality of your listing,etc). However, changes on nightly prices are made based on a base price that you have to input. That means that if there is a drastic change in the market "willingness to pay price", for instance due to seasonality, it won't effectively pick it up automatically as the price adjustments made are be based on the base price you input. Of course there is a way around it, setting up season profiles with different base prices..  But it's not trivial nor easy.

As I said is not a perfect solution but i honestly think is more "market-accurate" than Airbnb's suggested price...

[Sarah5000]

@Daniel1651 Thank you for sharing your tips, yes, I used to calculate all costs as breakeven point then adding % for the listing pricing then between 2 bookings where I give a discount. It is so true, looking the listings around me is so important in order to keep my prices update so I can make sure my listing is not overpriced.

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