Most Airbnb hosts have a tough time understanding the Airbnb pricing strategies. Of course, you will learn the tricks of the trade with time, but it is important to have a considerable amount of income from the property, or else, you cannot recover the management and maintenance costs. If you are keen on generating profits, we have a few tips that may come handy for Airbnb pricing approach.
Understand the final price
Before we talk about ways of determining the price, let’s start with how should you form your price.
- Basic rental price. This is the actual price for the short-term rental for day. The rate is determined by many factors (discussed later). You can choose to change these prices every day, or can rely on Airbnb Pricing feature, which generates an automated price based on certain factors.
- Cleaning fee. This is the charge of cleaning the house, and most Airbnb hosts will charge their guests for this. The cleaning fee is a good way to add more income, and you can also please the guests by discounting the rental price and recovering it from cleaning fee.
- Security deposit. This is not a form of income, but it is a crucial factor for sure. You will be on a safe side charging safety deposit for your Airbnb property.
- Charges for extra guests. With regards to certain properties, charging for additional guests is always a good strategy. However, this is largely determined by the type of property you are hosting.
Should you give discounts?
Understanding the factors that influence Airbnb pricing is very important. These can be divided into five major segments – Location, amenities, rental period, type of property, and season. All of these things have a say in the final price. You need to understand the minimum amount that you need to get in the off season for managing and maintaining the property. Most Airbnb hosts like to give a discount to guests staying for more than a week, while these discounts can be higher for monthly and yearly rentals. You can give a rebate in the cleaning fee and other charges, as well.
How to decide the price?
Pricing strategies vary according to financial goals. Let’s say that you have a small apartment that’s located centrally in an exotic destination. You would ideally want it to sell every day, and for that, you will want to set a price that people can afford. You can either go for a fixed price, which can be changed according to demand, competition, and season, or else, you can use the feature called Airbnb Smart Pricing, which will set the price according to these factors. Some hosts have had issues with smart pricing, so if you are willing to spend, you can try one of the automated tools to manage your vacation rental, as well.
Keep in mind that the prices on Airbnb are influenced by factors that are not dependent on the platform, and therefore, you have to be extra cautious of your decision. Check online to find more details on Airbnb pricing strategies.