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Pricing Strategy: High, Medium, or Low Base Price?


#1

I have been manually updating my prices on my calendar to match my anticipated seasonal demand. We are in a slow season right now, but tourism to my city starts to pick up around March, and increase until the busy summer season, so I’ve been raising my prices by about $5 a month. What I am charging nightly seems to be appropriate, as I have been booked for a little over half of January (our slow season!), and have a few bookings already for February and March. I was wondering, though, what I should set my base price as. The low rate I am charging now, in my off season? What I plan to charge in summer? Something in the middle?

The base price would be the price that shows up when someone views my listing without plugging in potential dates they’d like to stay. Who looks at the base price? I imagine my competitors in the neighborhood, guests who might find me through Google, and guests who find my listing linked under “similar listings.” (I don’t think I’m showing up as a similar listing yet; maybe I am too new?) I am assuming post potential guests search by travel dates, so they see my seasonal pricing.

I don’t want to seem too cheap to my competitors, who may want to undercut me. When I opened up shop in the beginning of December (last month), I made the mistake of thinking I had to low-ball some of the cheap offerings in my neighborhood, without realizing if I looked at their calendars, they are rarely available to rent, so they aren’t really competitors.


#2

The very Best strategy is for Everyone to Raise prices. What good is it if we all undercut each other. The winner is AIR.


#3

That would be great, but I can’t really control everyone’s pricing, just myself.


#4

This is how I do it with my upper tire flat here in Reykjavík city center.

Jan, Feb, Oct, Nov. 175 euros per night
Mar, Apr, May. 195 euros per night
Jun, Jul, Aug, Sept, Dec. 295 euros per night.

Try to find your sweetspot with prizes. This might take some time but you will find your price in the end.

Good Luck.


#5

We get this question all the time at Beyond Pricing because our hosts have a different price every night and that price changes daily.

First of all, you’re right that the majority of people search with certain dates in mind and Airbnb, like other sites, really push you into entering dates for your stay, so the Base Price is moot in most cases. Other sites, like HomeAway, now just say “From $x” or “$x avg nightly price”, which is actually a better way to do it.

But since Airbnb still shows your “base price” when people don’t enter dates, there are two camps of thought:

  1. Enter the lowest price you ever offer

This way, you’ll show up in more search results and look attractive. However, some hosts worry that guests will then put in dates and be upset that your nightly rate isn’t the same as your “base price.” But I think guests are learning that more and more people are dynamically pricing, so this worry might be overstated.

  1. Enter your average price

The idea is that you should list the average price so you won’t surprised people. But half the time your nightly price will be lower and the rest of the time it will be higher.

Ultimately, the choice is yours and Airbnb may move to just saying the average anyways, as other sites do.

Hope that helps!


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