How should I price my listing in 2023?

[Sybe]

Hi everyone,

The last few months have been tough on us all with rising prices for utilities in many regions of the world. That being said, one of the most interesting (and most searched!) discussions here on the Community Center is around pricing strategy, tools and opportunities such as local events. 

As we settle into 2023, what were your biggest learnings on pricing in 2022 and what do you hope to try out this year?

I’m looking forward to hearing your thoughtful reflections and hope that we can share tips here.

Thanks,

Sybe

[Fred13]

My instincts told me a year ago not to increase my prices for 2022 because the excellent 2021 was markedly due to a 'pend up' demand fueled by the 2020 lock downs.  For different reasons I am holding my prices once again for 2023 because it promises to be a soft economy which will influence the market our guest who come from primarily the middle classes, and not from the crowd inelastic to price who are either truly wealthy or on corporate travel junkets.

[Sybe]

@Fred13 Those are really good points and it's always good to know your customer and the type of guest that would stay at your listing.

How do you know 2023 will be a soft economy? Is that your own prediction or do you keep yourself up to date with newspapers and economics magazines?

[Andrew2792]

To make it financially viable, I have decided to increase my prices by around £10-15 per night to help cover soaring heating costs and also to also do 2-night minimums at least until the warmer months when heating isn’t as important.  I’m not always at my property so can’t afford to heat it while guests aren’t there and when I do get bookings I have to plan in advance to get the cottage to a comfortable temperature for guests. Like many other hosts I have seen a drastic reduction in bookings and enquiries particularly since the summer months, and I believe this trend will continue particularly with the economic decline & high energy prices with a trend towards people cutting back & being more frugal. 

[Sybe]

@Andrew2792 That makes a lot of sense, thanks so much for sharing!

How did you decide to raise your prices by that amount? Is that based on your utility bills and/or other factors, or?

[Jeffrey583]

Hi!  Thank you so much for the information you have posted, I'm learning a great deal and it is helping me to work through some difficulties we are facing with our listing.  

This year we decided to review our pricing and compare it to similiar properties close by to see how we compared.  With the cost of business increasing every year, we wanted to become knowledgeable with market 

trends and to have a better grasp on the business.  Once we did a complete review we learned

that our listing was one of the lowest priced properties in the area, if not the lowest priced property.  We decided to increase our rates for the 2023 year.  Our listing has done well in recent years, and we felt like a price increase was needed to cover the rising cost of expenses.  

That was three months ago.  Since we increased our rates back at the beginning of October 2022 we have not received any bookings.  At the same time of the rate increase for this year, we also opted for Instant Booking.  At this point, we are not sure exactly what is going on, but after reading this thread, our problems may be coming from the rate increase.  We have been worried that maybe Instant Book has not been working properly.  We typically are receiving communication from our listing if not everyday, every two to three days someone is always wanting to rent and it usually books up completely from May to September so it has been really concerning these last three months with no bookings, no phone calls or texts or emails.  

Maybe we need to look at our rates again and make some changes, I have not problem going back to the rates we had before the increase.   Our goals are to rent our property as much as we can, so if we can do that at the lower rate that is good with us.   Our listing is a beach cottage and we do not live there, so it is vacation rental property, we would love to have it rented everyday of the year.  We do schedule some times during the year when we vacation there, but we would like to rent it as much as possible.   Thank you all again for the knowledge!   I'm really interested in what others have to say, so please if you have any thoughts please post!

[Fred13]

About 95% of my clientele is from North Americans. Consumer confidence is a bit shaky right now and credit card debt has risen very rapidly, and since my listing depends on 'disposable income' of the economic middle to upper middle class (who I definitely gear my listing to and not to the next economic bracket)  - my price is geared to attract those I rather have AND feel they could afford it without much economic risk. My scholastic education was on economics and law, but being in business all my life, it has taught me to follow reality and be cautious. Best to stayed booked by just being more patient.

[Dineo4]

I’m holding my prices too. I’ve noticed that units similar to mine in the same complex are empty while I’m fully booked until Feb. I noticed the only difference is price. So with this economy, it’s a tough choice. To meet all monthly costs or to make profits 

[Sybe]

@Dineo4 It's a tough decision but sometimes it's better to focus on staying afloat rather than sailing with a sinking ship! 

[Patrick2676]

Thank you Sybe for giving us the opportunity to express ourselves. It's been really tough for hosts to keep up with raising cost. I also understand you guys work hard however, I agree with @Yvonne-and-Tony0. Airbnb service fees are quite high.

[Yvan105]

Thailand also sees an crease in prices, however not as much as Europe for instance. I believe the demand will increase for long term stays due to a more affordable cost of living, hot weather, and overall better quality of life. I might slightly increase my prices but will keep my hosting competitive no matter what.

[Casey242]

Hi Sybe!

After having a steady decrease in reservations in the last quarter of 2022, we have decided that raising our rates would not benefit us in accumulating bookings. 

This is my third year of hosting four lakeside cottages, opening during the pandemic's beginning. 2022 was the first year to track our booking pace accurately.

I hope my occupancy rate increases this year! Crossing fingers!

[Sybe]

@Casey242 I hope so too! A big factor in deciding whether to raise your prices or not is the goals you have set for yourself and your business.

[Maria568]

It is good to hear people's opinions .. every country and region is different , our bookings have been steady in 2023 comparing with 2022 and we do have a high /low season in Stanthorpe, Qld , Australia . I need to increase my rates every year but not too much and this year will be the same. Good luck everyone !

[Skylar0]

I use PriceLabs to automate my pricing, which does an excellent job. I've experimented with several other external pricing tools (Beyond Pricing, Wheelhouse, etc), and PriceLabs returned the best results. I highly recommend it.