Pricing Voodoo -- When to adjust?

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I’ve seen a few posts somewhat related to this but I was hoping to get some thoughts from people who actively manage their prices on a regular basis - adjusting up and down as circumstances warrant. I’ve tried the things like BeyondPricing and Air’s “Smart” pricing but haven’t been very happy with the recommendations. Both always underprice the space (perhaps based on an incorrect reading of local comps). I know the recommended prices are underpriced because I’m getting far more per night with people that actually do in fact book the space.

My core concern is when should I start lowering prices because it seems like I might be missing out because people consider the price too high? Yes, it’s voodoo, I know. But are there any good rules of thumb? I hear that 50% of bookings happen within 30 days of the arrival date. So obviously I should ramp down the prices a bit if I have vacancy in the next few weeks. But what about 60 days, or 90 days? I’m comfortable keeping my prices far beyond that higher, because few people will book so far in advance.

Anyway, I’m rambling. It’s a very inscrutable topic but I’m sure there’s some good wisdom out there.

Thanks!

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I think these things vary so much from market-to-market that the only thing you can do to try and develop a more scientific technique is to keep a record of when people view and book, and what price they book at, and try to spot patterns

For example, I was surprised to notice that I get almost all of my bookings on Tuesdays, Wednesdays and Thursdays. Because of this I try to keep prices for empty nights high until the preceding Thursday, when I will then drop the price if they’re still not booked.

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that’s a great tip. thanks!

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I’m happy with Beyondpricing - but the hard work is setting your base price. And it’s so hard with airbnbs because each host offers something very different. You have to really study the listings and ask yourself - what do I offer that’s worth paying more for? More/better reviews? Nicer photos/space/furnishings? Private bath? Breakfast? I have a two-bedroom semi-private apartment - believe me I do not fit into any ‘slots’. Close to public transportation? I was setting my price based on my nearest competitor. Her space is lovely and she’s lovely. However, she’s not at all close to transporation, but I’m a 5 minute walk to the metro bus.

So all that has to be considered, then compared to the price of hotels. For me, I compare with other properties equidistant from city center. Of course I can’t compete with listings right in the middle of DC, but I should get more than properties another 2 miles away.

In addition, taxes, insurance, and other expenses have to be considered - you have to make money - you have to know how much you want to make for the amount of work you’re putting into it. For me, it’s replacing one of my part-time jobs, so I know I have to make at least $800 a month. On the other hand, if we had two students living there, we could make at least $1,000 with a lot less work. Ideally, with more experience, I’ll know how many days to keep open on the calendar, and when to close the calendar when I’ve met my goal for that month. I don’t have enough information at this point, and, I have to pay for the new bathroom we added - so right now I’m packing them in.

I wish wish wish that Beyondpricing would add such a service (for a fee) of helping to set the base price - but as far as I can tell, we are on our own.

BUT! The reports Beyondpricing gives IS helpful. They know that if you are heavily booked into the summer you are not charging enough. So in that, they do help with that all-important base price.

HOWEVER - once you set the base price, I think Beyondpricing is great. They have a number of days this summer that the price is set very high above my base because of events that I don’t know about. Conversely some days are a bit lower than my base.

Interestingly, for a few days in August my airbnb price tips are well above my base. Beyondpricing’s are not. I contacted Beyond and asked them to look into it. They said they did, didn’t know the reason for the increase, but of course said I could raise the prices for those days. Since airbnb often wants me to rent my nice little place with 50 5 star reviews for about $50 a night (when hotel rooms can’t be had for less than $200) I am going with Beyondpricing’s price.

It takes the worry out of it for me. But yeah, it’s tough. I’ve even been pondering lowering my base. We offer a lot here at our place, but there are a lot of things that aren’t right as well. I go back-and-forth. I think the only solution for that is ‘time in the saddle’ - another year of hosting and we’ll all have a better idea of what we’re doing.

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So how do you set the correct base price?
I for one swear by Beyondpricing. This is what they say:

Your Health Score and Booking % are there to give you information about whether your Base Price is perfect or if it needs to be adjusted. We don’t automatically adjust your Base Price for you because we realize that we don’t always have perfect information about whether you blocked off a month or actually got a booking.
Because of that, to turn information into action, you should keep an eye on your Health Score and adjust your Base Price (if need be) every week. Depending on how overbooked or underbooked you are, you should consider changing your Base Price by a different percentage. For instance, if your Booking % is only slightly too high, you may only want to increase your Base Price by 5%. If you Booking % is very low, on the other hand, you may want to decrease your Base Price by 15-20% until bookings start picking up.

So initially it’s trial and error, but after a few weeks of getting bookings (or not), BP is going to tell you whether it’s too high or low, and you can adjust accordingly.
For example, after recently moving my listing to a new – and slightly less convenient – location in town (https://www.airbnb.com/rooms/9555902), initially we weren’t sure how much would be a good base price. Played it safe by setting it much lower from the previous place, and in a very short while we were able to attract many a number of new bookings and achieve a 90% Health score (due to overbooking above the recommended) – and we have increased the base price based on the above advice.

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Minor comment - your link isn’t clickable.

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Is this better?

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