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I woke to an email from AirBNB with this subject line. An enclosed link took me to an analysis of my “market” and similar spaces listed nearby. [Well, no, they aren’t similar since AirBNB doesn’t have a very granular approach to their own data, but that is a different topic.]
The comparables were all private rooms with a shared bath, while my space is two rooms plus a private, modern bath. Okay…
The link contained in the email took me to a list of nearby options that people looking in my area also view when viewing my house. Okay. This is interesting. Hit continue and I get the analysis. D’oh. My listing is more expensive than the others! Yes, at 700sq ft of space with a private bath, it is! But this is pretty interesting. I would LOVE to be able to pull up this report on demand.
I received an email from Air about two weeks ago, telling me that I was loosing bookings to other places, with a selection of listings that guests booked after looking at my apartment, and for each listing it was noted that it was X€ cheaper than my rate. There was one listed as 118€ cheaper per night, considering that my rate was 162€ per night for these dates, well, price alignement is not going to happen
I got the message, and walked through to the average price comparison. I’m $18 higher than my competition – but I offer gourmet full hot breakfasts, where my “competition” offers at best a stale bagel and cold cereal. You can’t get away for less than $20 for breakfast for two here, unless you eat that Yellow Arches crap and even that will cost you close to $20…
There are many hosts here who were doing STRs before Airbnb existed and/or who get bookings from their own websites. And we know how to price our properties without needing any suggestions from Airbnb.
We know what we offer is worth a certain amount and no amount of emails from Airbnb are going to change that.
I suspect that these emails are designed to appeal to new hosts who are unsure about the value of what they offer or longer term hosts who are getting fewer or no bookings. In either case, lowering prices ‘to beat the competition’ just isn’t the way to go.
Have you ever seen something offered at a low price and thought ‘what’s wrong with it?’ When hosts offer their accommodation for low prices that’s what’s likely to happen. It’s all about perceived value.
There will always be bargain hunters looking for the cheapest possible deal (and getting inferior goods because of it) but there will also always be people looking for something better so I prefer not to compete on price but to provide value for money.
It’s a corny saying but true - ‘you get what you pay for’. Consumers (guests) know this.
Air is only try instill fear in us and shake our confidence while attempting to get more volume as more volume at a cheaper price certainly benefits them.
I also got an email from AirBnb suggesting that many properties in South Florida are offering longer term stays and discounts for the same this time of year! Suggesting that I could make huge percentages more money if I changed my max stay to a longer period
I don’t WANT a full time snowbird couple. I’d rather have lots of shorter term stays and meet more new people than be stuck with a long term renter I learned to hate after a week… It’s not always about the money.
AirBNB is very helpful isn’t it? We always have to remember that their interest is in maximizing their fees, which might not align with our own interests.
I tried lowering my prices first time in 4 years because things in Maine get slow until the snow flies. I couldn’t believe the difference in 80% of the guests I had - they trashed my places, left them filthy, were crazy whackos and/or nit picked things. After a month of this and double the work, I raised my prices back up to get people with more class and respect for my property. I will never lower my price again, instead I will learn to enjoy those slow time in between the busy summer and winter ski season. I paid a high price for lowering my prices.
I think I understand why AirBNB “thinks” that the value of my rooms has dropped by 30% in the last few days– whole apartment rentals. Right now, it is 4ºF [-16ºC] in Boston. This is unusually cold for us, especially in December. Whole apartment AirBNB spaces have dropped their prices to ridiculous prices. I am conjecturing that they simply want to cover the cost of heating these spaces; profit is no longer the motive. Breaking even is.
When we saw a 10-day break in our rentals, we turned down the heat, closed the doors, and pulled the divider curtain. Our pipes won’t freeze and we can reduce the cost of heating these unused rooms. Whole apartments really can’t do that. They MUST heat those spaces. And if they turn down their temperatures too low, the other owners in their buildings will complain loudly since their heat costs would skyrocket as well. [Some HOAs even have a minimum temperature requirement in their docs.]
So, yes. My rooms have been devalued. At the moment, you can get a two bedroom apartment, in a decent location for only about $30/night. No one is going to share a home if they have the option to get their own place for about the same money.
Today, I see that I can create this report anytime I want to at the Price Settings dialog in the Nightly price slide-down. It doesn’t seem to be fully “live” however. The price that they are comparing others to has been lowered for the remaining 5 open dates this month. However the occupancy rate for the past 30 days does seem to have been updated.
This could be quite useful to see if other folks are getting booked when your property isn’t seeing much action.
By telling us to lower prices they are de-valuing what we, as regular, long-standing B&B owners, are offering.
My price is fixed by me and no matter what airbnb tells me I will make up my own mind, thank you!!
So yes, I agree with you 100%.
Just ignore. I get the request all the time to add smart pricing. I did mid year and lost $3.000- because smart pricing overrides your seasonal school holiday prices etc. We should be able to charge what we think our homes are worth and what we offer. BTW booking .com also sends a price comparison but when you check out the websites, there is no comparison. It does hurt when no bookings are coming in but then we have the choice to act accordingly and I do but I’m not giving it away.
Can u imagine listing a 5 bedroom home at price so low like it’s an apartment price? . Definitely not!
When it’s empty, I drive the hour to enjoy the quietness and ambience.
Have computer, can travel .
The research that was posted here recently by @DG02 shows that as Airbnb hosts we are not in competition with budget hotels and hostels. The fact that our tiny apartment rents for between $133 and $300 (the latter being for special events) tends to prove that.
Our competition is medium priced hotels. I’ve ranted before about how people don’t buy for price reasons alone. And to be honest if they did, I’m not sure that I’d want them in our rental anyway.
Very nearby, we have Airbnb rentals that are larger and considerably cheaper. This doesn’t seem to have affected our business at all. Yes, there will always be people looking for the cheapest deal but I truly hope that’s not the business model that Airbnb are edging towards.
I also suspect that hosts who fall for this ‘lower your price’ thing will discover that they aren’t making money at all. Hosts know how much they need to charge and what occupancy rate they need in order to cover their expenses and make a profit. Or I hope they do.
And this is different for every host, neither Airbnb or any other pricing service can tell you what this is. My house is paid for. I’m not going to get a LTR no matter what. It’s just a room so the extra utilities are minimal as is the wear and tear on the house. So my minimum nightly rate is based on “paying” myself a minimum rate to clean the room. And that varies too. I consider my minimum to be $25 an hour. For someone else it might be much higher or even minimum wage.
