What determines when it is appropriate to increase the price of a listing?

Answered!
Denise467
Level 2
Fort Wayne, IN

What determines when it is appropriate to increase the price of a listing?

Recently, I have taken a look at different aspects of our listing and am curious what others use to consider raising your nightly listing price. We have been a Super Host for three years and have a 4.98 rating. Our home receives Instant Bookings, Booking Requests, and Inquiries regularly. I have done a comparison of like homes in the area and have discovered our price is less.  One aspect to consider is that many of the others only have 1 to 1.5 bathrooms but ours has 2 full bathrooms. For this reason alone, I wonder if it is worthy of raising the price. I realise there are many variables but would like to hear from others on perhaps a checklist they use to determine when to raise the nightly rate.

 

 

Kind regards,

Denise467

 

1 Best Answer
Mike-And-Jane0
Level 10
England, United Kingdom

@Denise467 A complex question that seems so simple.

 

Some people use Airbnb as a lifestyle add on so actually quality/type of guest is more important than price. Of course a low price can attract poor guests so even here you should not go too low on price.

 

Others want to maximise their profit which doesn't necessarily mean revenue and certainly doesn't mean nightly price. A high nightly price may attract slightly fewer bookings but may increase your profit as costs/wear and tear will be lower.

 

If you are almost fully booked then try a 10% price increase. As long as your booked nights do not drop by more than 10% then in simple terms you are winning

 

Oh and by the way, for any newbies reading this. If you are anywhere near Airbnb the price tips then you are way too cheap.

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11 Replies 11
Mike-And-Jane0
Level 10
England, United Kingdom

@Denise467 A complex question that seems so simple.

 

Some people use Airbnb as a lifestyle add on so actually quality/type of guest is more important than price. Of course a low price can attract poor guests so even here you should not go too low on price.

 

Others want to maximise their profit which doesn't necessarily mean revenue and certainly doesn't mean nightly price. A high nightly price may attract slightly fewer bookings but may increase your profit as costs/wear and tear will be lower.

 

If you are almost fully booked then try a 10% price increase. As long as your booked nights do not drop by more than 10% then in simple terms you are winning

 

Oh and by the way, for any newbies reading this. If you are anywhere near Airbnb the price tips then you are way too cheap.

Thank you so much for your response.  This is helping me clarify our purpose for sure which leads to the correct pricing. @Mike-And-Jane0 

 

Wonderful for you pointing out the price tips, too.

Emilia42
Level 10
Orono, ME

@Denise467 I have never been to Indiana and I have no idea what the costs are like there. But consider this: If I rented your house with 5 of my buddies for a weekend in November, it would cost $24.50 per person per night. That is the total cost per person ... all taxes and fees. Now walk through your house and picture my group making a full meal in the kitchen, spreading out in the living room, taking two showers at once, washing a load of clothes, relaxing in the fenced backyard, sleeping in private bedrooms on a real mattress, etc., etc., etc .... all for under $50 a weekend. Does that seem too cheap to you? If yes, then raise your prices.

@Emilia42 I so appreciate your scenario and can relate.  This is helpful as well.  Goodness!  Also, it is our home and not a rental property purchased just for Airbnb.  We're out of the country a lot and intend to reside in it permanently when the time comes.

Brian2036
Level 10
Arkansas, United States

@Denise467 

I think you could raise your prices in 10% increments until you notice a reduction in bookings.

 

It is generally recognized that if you are usually fully booked your price may be low.

 

For several reasons it is more profitable and less stressful to book 4 nights @$150 each than 6 nights @ $100.

 

There are a number of intangible costs to consider, such as depreciation, cleaning products, consumables, and your own time. Combining all of these will make the higher price/lower occupancy rate much more profitable.

@Brian2036 @The intangibles are definitely a big portion to consider. Less stress for everyone involved is also a good point in fewer bookings but higher profit in the long run. Thank you for sharing. 

Tom143
Level 2
Ore City, TX

Just looking to see how many hosts might be raising prices. Everything is costing more and utility prices have increased substantially. We are considering how much - likely $10 or $15 per night. I do not think travelers wadges are increasing and with a tremendous increase in fuel/travel the hospitality industry will see a recession. Maybe better to be on the low end of prices and stay full??

 

Sarah977
Level 10
Sayulita, Mexico

@Tom143  "Maybe better to be on the low end of prices and stay full??"

 

Seems the opposite to me. 5 nights booked at $100/ night is the same as 10 nights booked at $50/night. 

 

Same profit to you but less work. What's so great about staying full?

@Sarah977   Thank you, We appreciate your thoughts!!

Denise467
Level 2
Fort Wayne, IN

@Tom143 @I understand your reasons

to consider adjusting your listing price, however it has been interesting since I originally asked the question October 2021 and now it’s April 2022. @Mike-And-Jane0  and @Sarah977  most recently plus others have the sound advise to me. 

 

I have used the 10% increase twice now and am still receiving bookings. My suggestion is to go with that theory of thinking until you see a decrease in bookings-then adjust accordingly.

 

I’ve been amazed actually. Bonus is less wear and tear on our home. This can also help with utility increases, too. 

All the best 

Tom143
Level 2
Ore City, TX

@Denise467   Thank you. We appreciate your thoughts!!