Justifying pricing to guests

[Ken28]

I've had a few inquiries lately asking if I can offer a discounted price. I already have discounts for weekly/monthly bookings. And my price is typically 10 percent cheaper than any other listing in my region. How can I help convince my guests that they're getting a good deal?

[Ken28]

My latest guest said that $422 was too much for two weeks. I responded with:

"Of the $422 you pay, I only receive 86% of that. The rest go toward service fees, and then I still have to pay income tax on the revenue. So, by the time I’m done, when you pay $28/night, I only receive  $24 per night, and then after taxes, I get only $18 a night.

Shop around if you wish, but the rates are by far the lowest you are going to find in the area. I can’t justify going any lower; it’s about 25% of a hotel price, and more than 30% lower than any other Airbnb listings. Plus, you have the added benefit of a full kitchen, washer and dryer for free."

[Kelly149]

@Ken28 I would not entertain this line of argument. Some people do think they should always ask. You could consider raising your price in order to have room to lower for the psychological benefit. Or just say no. 

[Em4]

@Ken28 where pricing is concerned i consider two factors.  first i need to be able to pay my expenses - wages, electricity, diesel, replacing missing items etc.  second it needs to be fun for me, that is that costs account for less than 60% of the pre tax pre commission price.

re requests for discounts outside the weekly/monthly discounts, my price is set to offer a discount if asked.  but i also like your explanation, although i would be more confident with my approach:

'Your price is $28/night.  After tax and commission I receive $18.  about 25% of a hotel price (i would have current prices available just so i get the deal right), and more than 30% lower than any other Airbnb listings.' (you could also have up your sleeve the cost of providing accommodation).  just rereading this, on paper it sounds very direct but of course as with any comedy routine, its all in the delivery.

🙂

Em

Hukawai Lodge

Franz Josef, NZ

https://www.airbnb.co.nz/rooms/15418840

[Kate157]

Hi, @Ken28, I occasionally get asked if it is possible to lower my price. I always respond that I already keep my prices modest and cannot lower them. Often, the guest books anyway. Some people just believe they have to always ask for a lower price, and maybe it works out for them sometimes. But I believe that someone will take the space at my pricing, so I don't fret about it.

[Joanna85]

I had a gentleman inquire last night if I could lower my price to $20 a night for seven days...during our busiest month of the year....and my price where it currently is is already below what most want for less than what I give (the price for those nights is well over double $20 a night, as he pointed out lol)  I explained to him that the demand is so great for that time of year I couldn't possible go lower.  He knows this, he just wanted to see what he could get.  I think a lot of people who ask for discounts or price lowering ask multiple hosts at once.  I am never offended and always say no. In any case, I don't think anyone needs to justify their rate...there are so many hosts and plenty of guests that a guest will always find closely what they are seeking.

[David126]

Just wondering what business you deal with who justify their prices?.

Some people need their discount, they seem on average likely to be bigger pains, I suggest the local Best Western as I know he does discount if he is not busy.

[Helen3]

Sometimes the cheaper you are the more of a discount people expect. Try putting your prices up so you are more in line with comparable local properties.

Simply say you provide excellent value for the prices and if your listing isn't within the budget, they are welcome to look for something that better suits what they have available to spend.

[Ken28]

I just raised my prices, so I'm no longer the lowest in the area.

Hopefully, that puts an end to this nonsense.

[Wendy-and-Frank0]

You can just say no.

When you explain, you lose.

[Ken28]

In this specific case, I came out okay. Great guest. He booked a week to start, and then a second week thereafter.

[Gina32]

@Wendy-and-Frank0 yes I just said no and declined a 10 day booking.

The request came in for 1 person for the 10 days (for a 3 bedroom house) then in the messaging he asked for a further discount (already discounted for more than a week booking) and said two of his friends would be joining him for 7 of the nights.

I said I was unaccustomed to receiving requests for 1 person and finding out there were actually 3.

He only wanted to pay $1000..... should be $2598.

Bit cheeky I thought. What do you think?

[Jessica-and-Henry0]

@Ken28

I don't put up with hagglers. I do not need to justify my pricing to ANYONE. 

If any guest thinks my pricing is too high, then I happily tell them good luck finding a place other than mine that better suits your needs while being within your budget 🙂 and wait for the next guest inquiry. 

Considering what I provide, I consider my price very competitive and a great deal - if the guest can't see that, they don't deserve to stay with me. 

fyi - the majority of inquiries and guests I get are exchange students. My price is just about the same or just a smidgen higher than staying at 2~3 per room dorm with shared showers and bathrooms, but I provide a private room and private bath, and basic amenities and clean towels and clean bedding throughout the stay and use of the laundry machine at no extra cost. So if anyone thinks I'm too expensive they can go for the dorm room option 🙂

I shouldn't have to explain this to anyone. The guest should do their homework and find the option that best suits their needs.