What is the right price for my airbnb?

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Hi all, just this week I completed my first booking on airbnb, the guests were brilliant and loved the experience!!

When I setup I just picked a price out of thin air, basically a bit lower than other nearby airbnbs do that I know about. But now with a 5 star review I would like to start to optimise it - does anyone have any advice? I’m worried that going too high means I won’t get enough bookings, but otherwise I’ll be losing profit :man_shrugging:

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I look at the rate for similar properties and price myself a little premium due to location.

Be sure you’re searching with dates, since prices can swing quite a bit due to seasonal affects. For each season I test a couple mid-week stays, a couple weekend stays, and any holiday/event dates to ensure I’m pricing competitively.

I search community calendars (and my own knowledge of events) to ensure I’ve caught any events that need special pricing.

There are also pricing services like Wheelhouse, which do a better job than Airbnb’s ‘smart pricing’. (Most hosts will tell you not to use SmartPricing.)

I did Wheelhouse’s free trial and liked the service, but it still relies on your own knowledge of the market. (ie. I had to tell it when our peak seasons were, and that they were much more premium priced than they suggested. You have to train the algorithm, to some extent.)

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I’d suggest you search the forum because this has been discussed quite a lot.

Tot up, or have your accountant tot up, all the annual expenses for running your Airbnb business. Be sure to include things like your labour time, wear and tear, repairs and so on. You’ll be estimating some of these at this stage. Don’t forget things like your STR insurance payments, professional services, local licences and taxes.

When you get an annual figure divide it by the number of nights occupancy you expect to get your nightly rate.

A lot of this is guesswork at the moment but you can adjust your prices at any time if you need to.

Try not to be influenced by what others are charging. They don’t know you, your property or the services you offer. They aren’t experts - you are are when it comes to your own place. :slight_smile:

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really interesting, thanks Allison. I will check out Wheelhouse, your approach sounds very sensible!

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Thank jaquo, I’ll have a hunt around I only searched on the tag pricing rather than the word :man_facepalming:

Totting up hosts rigorously is a cool way to go, I’d not thought of that at all

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I also check on the mid-range hotels near me; this clued me in that in my area weekends are priced lower than weekdays due to business travel, and that I could lose weekend tourist travel if I was much above the deals offered by hotels to fill their rooms (including taxes, parking fee, etc.). So I have different prices for weekday vs. weekend as well as “seasons” (basically lower in high heat of summer and even lower in dead winter). Also if you have major events that create lodging demand (festivals, etc.), bump up your price.

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Congrats on your first 5 star!

I agree with @Allison_H and would add holiday pricing premiums and make sure you’ve captured all of the big events in your area. Many of us have been caught with standard pricing for a peak weekend. If you have events like these get out your calendar and adjust prices way in advance.

Our biggest weekend is Columbus Day. I open my calendar for 6 months, but change my pricing for that weekend by the end of October for the following year. I mention using a calendar, because holidays like this one (and Thanksgiving) are different days each year and you don’t want to make that pricing mistake.