I just signed up for wheelhouse. Thanks for sharing. Which setting do you use for pricing? How is it working for you? Tia.
Ok Iâm glad you posted this because it drives me nuts. And yes, when you first start, have 2 bookings to your name, you are ready to jump at anything.
We actually need to RAISE our rates. We have one bedroom (nice size) with private bath (shower/bath) and complimentary full breakfast. And the room is $35 a night. How much lower can we go? (We have 2 listings, the other is a suite for $50). We have listed with their flexible listing process, where Air BnB supposedly raises the rate when it gets busy. But we had bookings throughout July and August and we were completely full, but we rarely received over our minimum price.
I donât get it.
I use conservative base price settings. As a new host, this is really the only setting I can use. The normal setting tends to over estimate the price you can receive because it seems to assume youâre an experienced host with many reviews. Wheelhouse prices also doesnât seem to factor in the impact of cleaning costs and service charges, which obviously also has an impact on your pricing. What i would do is usually to: turn on Airbnb smart pricing and get a feel of the prices , then sync into wheelhouse and compare the rates. If the prices differ dramatically, Iâll Google for local events to see whatâs happening in my area and judge which one is correct. Also check out your local competition prices.
Donât buy into all the BS around here on raising your rates. The only time you should raise your rates is when youâre 85-90% booked, which would indicate youâre underpriced. Iâm only 40% booked in October after six weeks of listing. If I listened to all the BS around here Iâll be staring down an empty calendar. I used to use a professional manager and he used even lower rates than me!
Ps: imo wheelhouse will not be useful for you if you already have a keen sense of how much your local Airbnb s charge.
I keep my rates as high as I dare (not very much lolly!) and still get fully booked albeit not so much in advance. I got told by a bright young thing of a guest this morning I should raise my rates for my area. Trouble is there are too many hobby hosts near me, people who donât count the capital investment or expenses, so impossible for me to compete.
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Hey Susan, yes we do! We need a counter campaign. Not sure what the market is like where you are but your nightly rates sound sooo cheap. I would not sign up for airâs flexible nightly rate plan in a pink fit. There is a conflict of interest there that results in the low rates you keep getting. With your blessing, they can rent your place at bargain basement rates which helps them bring in more new business.
In my city, hotels increased nightly rates by 15% on average in 2017. I found it stayed flat for me in 2017 compared to 2016: same rate, same occupancy roughly. We arenât the hotel industry but there should be some correlation. Hotel industry claim air doesnât affect them, all the while lobbying hard to shut air down in most major cities (mine included).
It begs the question⌠with airâs continued expansion, just how the heck does the hotel industry scoop up that high of an increase? Not because they are on the âflexible planâ and not because they undercut each other. Sort of the opposite⌠by sticking together and keeping rates high. Perhaps we should take a leaf from their book.
My occupancy is pretty high, about 90%, affected partially by my 3 night minimum. It means there are 1 or 2 day gaps that canât be filled occasionally. I could tighten it up with 1 night min but for the extra work and cleaning cost it wouldnât be worth it $ wise.
All the best of luck. I hope you can find a way to up your rates.
@Daniel_Lin - Iâm curious where you get the 85-90% target occupancy rate. My DH was at a hotel once where there was a hotel management/marketing convention. He talked to one of the hotel guys, and when they heard we have an 80% occupancy rate, the hotel guy said âRaise your rates! If you are over 70% your prices are too low!â
Hotel occupancy rates were around 65-70% in 2017.
Our strategy is to keep raising our rates every year. I also balance losing profit margin by lowering prices with increasing occupancy.
Itâs all about MAXIMUM PROFIT and not about maximum occupancy. âHeads in bedsâ (maximizing occupancy and not profit) is the root cause of the race to the bottom.
And a wise woman once said to me âthe vacation rental that gets booked last is the winnerâ (meaning they priced it at the maximum the market would accept).
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Getting sick of all the people telling us to raise rates as if weâve not done our own homework. I strive for 75-80% and Iâm not even getting that , and people are still telling me to raise my rates. Who am I going to attract? Pricing is affected by supply and demand, telling everyone to raise their rates only works if thereâs an organised union enforcing participation (at risk of anti-competition laws by the way). Otherwise, itâs just plain irresponsible advising people to raise rates.
The important word being âencouragedâ. Hosts arenât sheep. Or idiots. Airbnb can encourage me all it like to reduce my prices. But I wonât. And no other host âhasâ to either.
I have as much competition, if not more, than many hosts. Almost every other building on our street has an Airbnb rental. I also compete with hotels, motels, hostels, houseboats, STRs ⌠in an area thatâs been a popular resort for decades. If I wanted to study the competition (which I donât) I wouldnât have time to do anything else.
If some host near me is daft enough to let his accommodation go for half the price of mine thatâs his lookout - and within a year or even quicker, he will have discovered that Airbnb isnât a magic way to make money and be forced to give up because heâs barely covering his overheads due to his daft low price.
Airbnb rentals can offer terrific value for money without having rock bottom prices.
I try 
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And, @Daniel_Lin, your precise words were:
(Bolding is mine). Someone reading your post might decide they are overpriced if they only have 80% occupancy rate. We have 80% occupancy and Iâm still raising my rates. I know Iâm not in the same market as you, but - my point was that itâs about profit, not occupancy rate.
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Instead of getting too worked up about all this, try to keep in mind that economics is a soft science, like psychology. A soft science canât have hard and fast numbers or be relied upon like the Holy Grail. Economics relies heavily on rule of thumb, averages, and typical, generalized pieces of selected data. The more of these non factual suppositions you pile on top of each other, the further from reality you will get and dangerously so. It becomes a series of âifâ clauses and all it takes is one to veer off course (which is the rule not the exception) and what you expect and what you get are two different things.
A little bit of knowledge is a dangerous thing. Try to consider all of the factors affecting your own unique situation, experiment and test things out and keep economic theories in mind. Oh yeah, and add a whole lot of random chance in there which happens at the individual level and that whole messy, gooey process is also known as spider sense lol 
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Yeah be great to make a profit without having to bother too much with guests lol. Buy a property in a hotspot and go for capital growth.
Yes mate I know itâs about economics. Incidentally I graduated with an economics degree and a second degree in business management. I get your point about not racing to the bottom, but sometimes itâs really difficult to attract guests without lowering the price, at least until you have enough reviews to convince others youâre also selling quality. I guess we are all on the same page , just different places in the Airbnb journey. You are probably an experienced host who earned your stripes and people are ready to buy that extra quality factor. For me, Iâm still trying to work on getting reviews. But I donât intend to keep my rates low forever. My January rates are pretty much on par with my competition. And I intend to increase my cleaning fees too, to attract better guests. The recent guests by my ex manager broke a lot of things, and Iâm not sure the whole endeavour is worth it.
Research shows that when most people face new circumstances, they go with signals from peers and authorities. Not all people, but most people.
If youâre not coming from a property background, hosting on Airbnb is new circumstance.
And if you donât have the good fortune to first find forums like this one, then you take your signals from the authority. Donât forget, Airbnb marketing is really good at making things look like theyâve got your back.
The problem with the race to the bottom is that itâs like a vortex which can suck us all in.
In any case, weâre all on the same page and, as ever, Iâm grateful to have found this forum early on.
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Great article! Thank you.
@jaquo And thatâs an awesome website youâve got there too.
For anyone who hasnât been there, thereâs lots of good hosting tips over here: http://traquo.com/category/travel-tips/
Would be even greater if the posts could be categorised 
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I agree. Airbnb is not necessarily a worthwhile endeavour and in some cases not even an option at all due to regulation. I started hosting to lessen my exposure to the risks of LTR. I experimented with a tiny basement apt which did really well and then converted a few more units which achieved similar results. Conservatively I was netting 2x what I made on LTR. It took about 6 months on each STR to cover start up costs.
I refined my process to keep the amount of time I spent hosting to a bare minimum. Itâs a very easy hidden cost to overlook / underrepresent. With the extra money I was making I justified hiring a f/t property manager who also took care of my LTRs. I âretiredâ and got off the grid. Life was sweet, for a while.
Then came legislation. Not only for STR but also LTR. It was always pro-tenant here but is spiralling out of control now. I decided to move my real estate business to Australia and nz. Might test out yacht rental also. May or may not use air in future⌠see what works.
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Yep. Weâre going to drive your prices down til weâre taking food out of your mouth, but itâs sent with love from Airbnb. Lol
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Totally agree. Well said.
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Where are your rentals? Is that the market rate where you are?