I wanted to drop a quick post to share a link to a crude little Pricing Model I have been working on, that others might also find useful.
Some time ago, I posted a thread about how to go about calculating your break-even pricing. Being new to Airbnb, I was curious as to how other hosts went about looking at their costs and overheads. I was trying to take a leaf out of Alex Polizzi's book; host to one of my favourite British show's The Hotel Inspector. One thing I often heard Alex emphasise to hoteliers was the importance of knowing the minimum nightly rate you should charge in an accomodation business. So, that's exactly where I started - working out the minimum I needed to charge in order to make a profit.
From there, I dug deeper to try to determine the maximum rate I could charge in my particular market. I looked at a number of tools AirDNA, RankBreeze, and Wheelhouse. Through the many, many graphs I discovered very quickly that whatever I did to increase my pricing significantly lowered my listing in the Airbnb search results engine. This meant that the amount I could charge was ultimately limited by how far into the toilet my listing would place in search results... so I got right stuck into understanding SEO, to learn exactly what I could do to maximise my search results and give myself room to increase my price.
Over the past 2 months I have tracked my listing via RankBreeze and, slowly but surely, make small changes that have lifted my listing in search results. Each time I made a gain, I offset it by increasing my daily rate. Day by day I have lifted my rate in small increments, to take up the room made by my other changes to photographs, amenities, word density, and all the other 28 known things that drive Airbnb SEO.
As of today, I am pleased to report that I have managed to successfully lift my market rate by 49% without negatively impacting the placement of my listing in Airbnb search results.
It hasn't been easy, and has required no small amount of reading, learning, reading some more... I can't tell you how many cups of tea... but slowly but surely I've seen results to more than justify the time I have invested in this little project!
Now for the model...
I expect for some people much of this will seem like internet voodoo. If I'm writing it, it probably is 🙂 So to make life just a little bit simpler, I thought I might share the nifty little model my wife and I have been using to keep an eye on some key pricing things for our Airbnb. This little model is actually what I was looking for when we started out... something to take our numbers, do the math, and spit out the basics.
We built ourselves just such a model and the output looks like this:
You can find a link to the model here: https://1drv.ms/x/s!Aq1ZZumgta_Zki5gbhrmE3MLTpzG
If you can use Excel to a comfortable degree, then you'll have no trouble saving a copy of this and having a go yourself. It's very crude and doesn't reflect planetary complexities across international tax systems, but it does the job reasonably well for a simple calculation. We also find it helpful to have, since our own Tax system keeps bloody changing.. at some point we need to know when all this isn't worth it!
If you want to edit the spreadsheet, you will need to save it down to your computer or your Onedrive, then edit it in your own copy of Excel. Don't ask me how to transfer all this into some free version of a spreadsheet like Google docs... I have no clue, but I expect someone else might 🙂
That's all folks - happy number crunching.