What is happening with the prices in London? I have been an airbnb host for 3.5 years and the prices are tumbling like I have never seen before. Am I the only one experiencing this?
I have two listings, one for a private room with own bathroom in my large 2bed home, the other one is for the entire home for times when I’m away (I only started doing this one year ago). Ever since the pricing tool was introdcued I looked at it in disbelief of what it suggests and could only ignore it. To me, it actually feels unsafe using the recommended prices, yet I totally and utterly rely on the income from my place being rented and, for the first time ever, this month has been incredibly slow. When I first listed my entire home over Christmas last year I charged £140 plus cleaning as an introductory price, I since had regular bookings throughout the year for £200 per night with all all the reviews saying "good value", now I am suggested to charge £100 and even less. I have also checked a website called Pricelabs, who is making similarly low price recommendations. If I had followed the suggestions by these pricing services all year, I would have had a much lower income. Instead I do what I always did: regularly check what similar listings in the area are charging, or what the average price is for listings like mine seen on the home page. But I am now wondering whether overall prices will be affected, if every new airbnb host sticks to the price recommendations by the pricing tool? Understandably, if I was new I would do the same. However, this is London - everyone knows that a million dollar mansion could be right next to a council estate and a computer just won’t have an algorithm for that anomaly.
What is everyone else experiencing? Especially longer term hosts - are you experiencing drastic price drops? Are you following price suggestions from airbnb or other services like Pricleabs? Are you finding them useful? Any info would be much appreciated as I’m at a loss as to what to do - drop prices drastically (and risk opening my home to people who might not appreciate it for what it is worth) or keep taking the risk of higher prices and a potentially empty home?
It would be for me if I used it ..... I have one room with a shared bathroom. All my feedback is great, people seem to like it here. But it is an oddity. On the main road, on the road to "somewhere" or back from "somewhere or other" it is great for those who want it. So I have never deviated from my original price of £40 per night (before AirBnB fees), and it works. It may be that I put the price up the future, but I have totally ignored the pricing tool as it drops the price down to £20 in quiet periods. No good to me, because either people want to stay or they don't! I'll just keep to my original pricing, and ignore the tool.
January is summer here in Dunedin NZ. It is usually our busy season and yet Airbnb are suggesting I drop my prices by 50% which means I would be charging a measly $39 per night. It is just not worth doing and if other hosts want to charge that they can go for it. I dont want to drop standards and so far everyone that has stayed has given 5 stars on value. In the end it will boil down to you get what you pay for and hosts like me will drop out.
Right there with ya. When we began in OKC (Oklahoma City) there were around 6-8 other hosts, last year 118 plus, now in the 200/s. Where I was charging $123 per night for up to 6 guests, now I am being forced to reduce the cost to $98 by local (new) hosts boasting 10+ properties and charging a ridiculous $85 undercutting us substantially. There is a glut of realtor managed homes being vomited onto the local market and we are finding it hard to compete. The past 2 months we have struggled to get 1 or 2 bookings. Last year, we were forced to cancel a booking black marking us from Superhost status even though we have served guests dilligently and compassionately now for 7 years. Unsure of what the future holds. Hoping for a brighter new year. Pricing tool? Get stuffed!
Thanks Robin, I totally agree. And thanks to everyone else sharing their experiences and opinions about the ominous pricing tool here. I'm glad I'm not the only one seeing this as a long-term problem. And let's not forget that it's not just airbnb's own pricing tool that causes reason for concern, entire companies are putting out this very same service now (and charge money for it!), which is just silly. I'm all for automating, but this area (the pricing of an airbnb home) might just be where it doesn't work. I hope that many more airbnb hosts read this and spend more time thinking about their pricing strategies and the pricing tool. I guess, once we hit a certain number here, it migt even be worth bringing this to airbnb's attention - which is easy enough. So please keep sharing your opinions!
One of my guests commented to me and in the review that I was too cheep and should charge more.They also made the very valid point and one I had not considered that if too cheep what kind of guest is that going to attract ?In my experience sadly ,the guests that pay the least demand the most ???
Well I am sorry Liz but I totally disagree with you. Our guests are truly surprised at the value they get! We charge $80au per night and the market we are pitched at in that price bracket want a clean, comfortable, private, homely environment. We are not aimed at the $300 per night 'wanabes' who are infinitely harder to please.
This place Liz, is something of an anachronism! When we bought it in 2009 it was derelict.....it had been horribly neglected and had not been lived in for 10 years, and the roof had fallen in in one spot! You could look up and there was the clear blue sky where the ceiling and the tiles should have been!!!
But it had beautiful 2 foot thick stone walls and I knew I could make something of it. It's been a long haul Liz, I have been on it for 6 years now and I am possibly only a bit over half finished. I'm 71 now, and I have slowed down a bit!! Nothing has been done to the front of the main house as yet, and guests arrive! They take one look at the front of the house and decide, this cannot be their accommodation! They sit in the car for a while, go through their paperwork and study the address they have been given....sometimes drive off in search of another similar address and then return. Eventually they get out of their car and timmidly walk down the side of the house as they have been instructed. I can see by the mans face, he is seething, and can't wait to have a piece of me because his hard earned money has gone into something that does not even remotely match the description....his face is even twiching and his fists are possibly clenched!!! As they walk around the corner, there is the back of the main residence all done up with lots of glass and our beautiful English garden...... and ahead of them is the cottage they will be staying in. His jaw drops and the expresion on his face melts....I show them into the cottage, and with a massive sigh they both say...."oh, how fantastic is this"!!! From then on....it's all amazing because it is so unexpected. I leave nothing to chance...there is a 'plan B' for everything and they invariable love their stay......and from memory, only one of them has ever quibbled about the value....but then, you will always get that one....read my reviews and you will see how people react to our listing.
Liz, I love the fact that I can take someone from the depths of despair to the height of euphoria in the space of a few metres!!!!
Being cheap does not mean you will have difficult people....quite the opposite! It all depends on the effort you put into it!!! Cheers... Rob
That made me laugh - well, sarcastically, because I recognize it.
The guests I have given discounts to have been the worst guests I have ever had. And guests who have paid my rate have said I should definitely put my price up. If I charged AIRBNB pricing I would be paying for people to stay here.
I happened to come across an NPR interview about a year ago with an economist talking about how the sharing economy is a race to the bottom because supply will eventually outpace demand. There's a related article in New York magazine about how the pricing algorithms are good for the consumer but bad for the service providers. I know that the AirBnB brand is supposed to be that we're one big happy smiling community but I actively discourage people who want to start new AirBnB's because more equals less for me. I was frankly appalled that AirBnB recently did a big recruitment push to get existing hosts to bring in more hosts. What they should be doing is helping cities enforce licensing requirements.
Have you thought about offering less amenities to lower your costs? Some guests are happy to bring their own sleeping bags etc.
Gerald no one at all would sleep in a sleeping bag in a London flat they come for shopping museums sights etc only campers go with tents and sleeping bags
i have to balance out cost of heating gas wAter etc. So washing a couple of sheets and towels is nothing compared to that : i have stopped buying them a welcome fruit basket and mineral water as we have to slash prices in london
Hi there Sara,
Hell! that is a pity that you have to curtail all those nice little extras Sara.....is the competition for a bed that fierce where you are in London???
I am fortunate that the competition is not that serious here. I am in a position to be able to provide a full breakfast including freshly squeezed juice, toast, eggs and bacon, 3 different breakfast cereals, black tea, green tea and Camomille, coffee both instant and brewed, 6 different Beerenberg jams, 5 various packet soups, a big bowl of the best fresh fruit I can find in my area, milk both full cream and skim.....even a couple of beers and a couple of ciders in the cottage fridge.....all on a no charge basis! I can do it because, I will only work to a standard...not a price....
Sure the pricing tool tells me I should drop my studio rate down from $80au to $60au but there is no way I will contemplate that for a second. Our reviews all tell us that we are a wonderful experience....the chocolates on the bedside tables, the paper in the morning....the weeks detailed weather forecast in the folder when they arrive...and if they are there for four or more nights, one of the best meals they will ever eat. I am a chef, I love my cooking and it costs bugger all to cook for two extra mouths, but I so enjoy it when they tuck into a great chicken Risotto or personal Chicken, Leak and Thyme pies with Parmesan smashed peas!
Sara, this is what hosting is all about. We had one guest who came out of the cottage in her black gown as though she was going to a ball! We had the best night with these people we didn't know existed 24 hours before!....This is the Airbnb experience.
I found out one guest was having a birthday while she was staying with us, so I decked out the cottage and the rear garden in candles. pointed a laser light generator shining pinpoints of light up into the trees and provided a birthday cake for her....She cried and said it was the best birthday surprise she had ever had.
I know, first and foremost, it has to pay, but there are ways and means of cutting financial corners and every guest who comes is super special, so Sara, it doesn't matter what you charge, provided you supply 'the experience'.
I have only been doing this for six months but it looks strongly like I will achieve Superhost status in a couple of days....and by God I will do anything to keep it.....
Airbnb market becoming quickly too saturated? Agreed, agreed, agreed! Are we marketing airbnb or ourselves? We provide a wonderful experience. Have hosted wedding parties, amazing outdoor cabaret, comfortable, clean surrounds...and yet I can't compete with completely new housing, with completely new insides and out. Shiny will always win over comfy. So how do we as individuals compete with corporates providing corporate housing and boutique hotels!?
You can always set your own price, and can set a minimum price. Is London a popular travel destination in the winter? If not, you may have to accept seasonal fluctuations in pricing.