Pricing our listing-- considering an increase

[Laura2592]

We are at a crossroads with our cottage in terms of pricing. We started out at $50 a night which was a huge mistake. We had no idea what demand, if any would be for our space. Since then we have raised over time to an average nightly price of $135. We are booked for all weekends into July which would seem to indicate we need to raise prices again.

Our cottage is the only listing in the small town where we are, and one of a handful in the immediate area. There are many cute places in Frederick and Gettysburg, each about a half hour away. We have strict occupancy limits right now due to our cleaning crew and what they are able to handle. The few times we have allowed more guests we have gotten dinged on cleaning by the next group because our cleaners only have a limited time to spend in our space. We go behind each guest group to disinfect and re-clean but with bigger groups it can be a challenge.  Hence our limits.

We have only ever had one guest give us a 4 in value and that was someone who had tried to negotiate hard on the front end because "things should be less expensive and I am on a fixed income."  I think we could tolerate a rate increase. However the nightly prices jump on places in the area only when they seem to allow 6 or more guests. We could jam in an air mattress and list the sofa as a sleeping space for that but not sure its worth it.

We have tried to upgrade each time we did a significant rate increase-- added a deck. changed out furnishings, bought nicer sheets and towels, etc. We could continue to do that. For example, I would love new counters but not sure that adds to the bottom line. We have a guest suggestion box and MANY have asked for a hot tub. That could certainly raise our profile and pricing, but who wants to clean that?

Smart pricing is on, but it really doesn't work well as there are few listings in the area to compare it to. We had 88.5% occupancy in the last 365 days which we are pretty pleased with. We leave a day between guests so its hard to rise much above that number.

Thoughts or advice?

[Mike-And-Jane0]

@Laura2592 Can you answer the question 'If guests didn't stay with you where would they stay and what would they pay?'

[Laura2592]

@Mike-And-Jane0 Its difficult to answer. 

Our space seems to be a draw in itself as it is unique with a lot of great history. There really isn't a lot in the local area to do immediately around it. One cute shop, a general store and a gas station. That is it. 

About 10 mins away is a very elegant inn with a nationally renowned restaurant. Room rates are about 200 a night. 

A half hour away are two small cities with Airbnbs from $80 to $300 a night or more. There are several in the $160 range but they have 6 guest capacity for whole house listings. 

[Emilia42]

@Laura2592 Why don't you raise the rates for your remaining nights in July-September and see what happens? As demand goes up prices should go up. I don't really see the logic in having one price across an entire calendar no matter what. Hosts should always try to capitalize on busy timeframes. 

[Laura2592]

@Emilia42 yes this is where I am going. The auto pricing tool is supposed to account for high demand but my market doesn't seem to have data to move the needle. ABB is always telling me I am priced too high and should go back to $55 a night 😞

I am just wondering how much to raise the price. We usually do pretty conservative increases such as $5 or $10 per raise. Maybe I should be a little more dramatic. Not sure. 

[Colleen253]

@Laura2592 I like Emilia's thinking. And, I think you should aim high, for the sake of experimentation. You may find yourself pleasantly surprised. Btw, yes, adding a hot tub would make your place an even bigger draw, and definitely justify a much higher rate. Yes, they do take extra time to clean and maintain, but with your place, you can easily go with a small 4 person tub. Much easier on the whole. And on the plus side, you get to enjoy it while you're there yourself.

[Anonymous]

@Colleen253  Whenever I think of hot tubs, this is what  immediately comes to mind:  https://www.youtube.com/watch?v=-w7knDiVh-Q&ab_channel=MovieTrailerFan1980

I can definitely see how a hot tub would appeal @Laura2592 's market, but it might be a little hard to reconcile with the 19th century schoolhouse vibe, since I'm pretty sure that early American education didn't involve jacuzzi. It's one of those things that would look really gauche in the listing, but the guests who turned their noses at it would be secretly happy it was there.

Well swing on this! 

[Colleen253]

😂😂😂 @Anonymous 

[Mike-And-Jane0]

@Laura2592 do you get any benefit from smart pricing? I have always ben suspicious based on the ridiculous pricing suggestions but perhaps they are different systems?

[Laura2592]

@Mike-And-Jane0  no benefit that I can see. If I was in a busier market maybe. Now and again I will notice a booking has a slightly higher rate-- $137 instead of $135. But that is it. 

[Anonymous]

@Laura2592  Smart Pricing was not designed to help hosts maximize their income. It was designed to suppress prices and keep Airbnb's inventory competitive against other platforms. Since you're already pretty heavily booked for the near future, this would be the perfect time to turn it off and do some bolder experiments to find your ceiling.

Let's say you went wild and listed some your most far-off dates for, say, $200 per night. If they get booked at the premium price, consider the extra value to be a security against the higher odds of the booking being canceled. If they don't get booked, you have plenty of time to incrementally lower them until they get snapped up. 

I don't pay attention to the "value" rating; it's just as meaningless as the "location" rating. The customer is always free to choose a cheaper listing or a different destination, so the rating they give on those traits are only a reflection of their own decision-making skills. 

[Branka-and-Silvia0]

I don't know if others noticed the same, but when I raise my prices for just a little, like 5€ then my listing goes down in search rank for about a week or two. Then it goes up again. It may be Airbnb algorithm. So if you raise your prices and don't get any bookings for a week or two, don't quit and lower the prices immediately, wait for at least 2 weeks.  And btw, I never ever used the smart pricing tool, turn this thing off and forget about it.

[Ann72]

@Laura2592   When I started, my prices were about twice as high as my nearest competitors.  Now everyone around me has raised their prices.

I settled on $297 a night a couple of years ago.  For a maximum 2-person cottage.  That was my minimum for Smart Pricing, and I was happy with it.  Now I look at what VRBO charges for my place and put those prices into my Airbnb calendar, because they're always much higher.

Last night I got a 4-night booking for $405 a night.  That one is a month away.  This morning I got a booking for the same place for two nights next week at $312 a night.  Before that came in, I was thinking of bringing it back down to $297 a night for close-in dates.  Glad I waited.

You could double your prices, to be honest, and get booked.  Especially during a pandemic.  I wouldn't overthink it.  Just do as @Emilia42 suggests and give it a try.  Can't hurt.

[Emilia42]

@Ann72 Are you still using smart pricing? If so, it's amazing that your prices fluctuate that much.

[Ann72]

@Emilia42  I am using it, but I'm overriding it a lot this year.  I have the place on VRBO and I look at their prices - much higher than Smart Pricing puts mine - and bring them over to Airbnb.