We started experimenting with some third-party pricing services about 6 months ago and we’ve been really happy with the results.
Using these services gave me the courage to raise our prices to between 1.3 - 1.6 times higher than they were last year. And these prices are about 1.5 - 1.8 times higher than Airbnb’s so-called Smart Pricing suggestions. And we’re still getting booked solid.
I was really reluctant to raise prices because all last year we were already a little higher than most people in our neighborhood. But these services kept recommending even higher prices. We first experimented with EverBooked and then BeyondPricing. They both suggested much higher prices. So I finally decided to trust their purported expertise - for a few weeks at least - to see how expert they really were. And it turns out they’re not bad!
What we have found is that we still book up nearly 100%, but it takes longer to do so. Right now, one of our rooms is booked for all but 5 days in August (this month) and the other one - not doing so well - is booked for the first two and a half weeks of August.
Last month, it was the same at the beginning of the month. But before the month ended we had booked all but 2 room nights! One room was fully booked every single night and the other was booked all but two nights. And we had our biggest month revenue-wise ever. We’ve always been booked 95%-99% - but our total revenue for July was 1.4 times higher than our second best month ever (which was the month before and was priced by one of these two services). And twice as high as previous months when I was just guessing at the best price.
I used to panic if we didn’t have all nights booked by about three weeks in advance and I’d go in and drastically lower the prices. But thanks to the information provided by these services about other nearby properties - I could see that within two weeks in advance, almost all the other places near us were booked. Which means those last-minute people who are desperate for a place to stay, only have a few choices left and they end up willing to fork over the higher price simply because they just don’t have many choices at that point. So now I don’t lower the price at all for vacant nights - even if it’s only a few days away. So many times we get really last-minute people who book just a day or two ahead of time - and they pay the higher price.
Third Party Services vs. Airbnb Smart Pricing: The third party services offer several things that Airbnb Smart Pricing doesn’t seem to. For one - they track trends year over year. So they know about how busy September in New York is going to be this year based on its performance over the last few years. Airbnb doesn’t seem to track it this way. They seem to base their demand estimate off of how many reservations have been made so far for the future months. That’s why you always see their “Travel trends can change daily” graph going down for the next few months even if you know those are busier months. Most people don’t book that far in advance so Airbnb seems to always think next month’s demand is going to be terrible and they advise you to lower your prices accordingly.
Both EverBooked and BeyondPricing are suggesting much higher rates in September and October than even July and August. Airbnb is suggesting much lower prices.
Also, EverBooked and BeyondPricing both take into consideration big local special events that are planned well into the future. Airbnb doesn’t seem to do this. Of course you can’t know for sure what Airbnb is taking into consideration because they don’t tell you. But the third-party places do give you a pretty good idea what they’re looking at.
Also, by using these third-party pricing services we’ve learned a lot from them. Just from reading their blogs, you’ll learn a lot. And that in itself has been worth it as well. For instance one of them (I don’t remember which), teaches hosts that if you’re more than 80% booked 30 days in advance, your prices are probably too low. If you’re 95%-100% booked a month in advance, your prices are definitely too low. That was us in the past. We were always 90%-99% booked 30 days in advance. And we thought that was great! But now I see that if we had been a little more patient, and kept the prices where they originally were that we still would have booked over 80% at the higher prices.
You can do this yourself. Assume that you get 100% booked at your current price. Then calculate, increasing your price by 20% but only booking 80% of the nights. Just multiply it out and you’ll see it’ll probably come to more net revenue, even though you’re renting fewer nights. And more money for less work - is fine with me!
Patience is the key. Don’t panic when you see unbooked nights next week or the week after. If you’re in a busy area and your base price is about right, most of them will be filled before all is said and done.
As far as my assessment on which is better, Everbooked or BeyondPricing. I honestly just don’t see that much difference between them. If you give them both the same base price, they’ll generate prices that are within just a few dollars of each other. They both seem to do a good job considering past trends. In other words, they’ll know that next month might be really busy - even though Airbnb is looking at future bookings and thinks next month won’t be busy. And they both seem to do a good job keeping up with local special events that will pack out the hotels.
We ended up using BeyondPricing (so far). Only because at the time I made the choice, BeyondPricing had a scorecard where they rated the health of your bookings, taking into consideration how many nights you have booked in the next 30 and 90 days. If it’s just about right, your score will be in the 90s. If you have too few days booked, your score will go down - and if you have too many days booked your score will go down. Their scorecard makes it really easy to see when you need to make an adjustment in your base price.
However, since we signed up with BP, I saw that Everbooked added the same feature. So really, I think it’s six of one and a half dozen of the other. There may be other services but those are the only two I’ve tried. I’d really recommend taking a look at them and using one of them. It’s made a big difference for us.
A couple of weeks ago there was a Jr. Olympics near our home which filled our two rooms up quickly with kids in that event - I could have raised the price easily had I known about that event. So, I am now doing my homework and you have really helped. Thank you!
