I’m looking at Wheelhouse.
What are you using, if anything?
If you don’t use a pricing tool do you kind of ‘eyeball’ it based on what you feel is your competition and the timing of local events?
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No pricing tool. Our accountant looks at our annual expenditure for each rental, adds a profit margin and then suggests our nightly fee. We then adjust it was we see fit.
I am well aware of local events and therefore adjust our prices accordingly. It may be that there are pricing tools that can do better, but I really doubt it.
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Thank you.
I would think of that as my minimum price to make the desired profit margin.
But at that price I might be ‘leaving money on the table.’
For example, suppose my mortgage had been fully paid, does that mean my nightly price should be lower? Perhaps that’s the kind of adjustment that you make to your accountant’s starting point minimum.
But beyond the minimum price to achieve a desired profit margin, a Host could ask themselves whether setting a higher nightly price or a certain minimum stay length might increase profits. That’s what some of these services purport to do.
Someone here suggested setting a ridiculously high price for a one-day stay and then discounting it tremendously for longer stays. I don’t think that these services suggest tactics like that but I’d love to hear about Hosts’ experience with any such tactics.
I heard about Wheelhouse here from @Stacilivesay.
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I don’t use or trust any Airbnb tools. If I have high occupancy and glowing reviews or increased expense I increase by a few dollars. I keep doing that until occupancy falls a little. Of course I have to take seasonal variations in demand into account. Occasionally I’ll lower rates for a couple months in the winter.
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I rarely change pricing, usually I just inch them up a bit. I will admit though I did reduce my nightly rate $20 recently because it’s been so slow, but I am going to up it $5 at a time and get back to where it was.
I up the prices and minimum stays for holiday weekends as well.
It’s interesting. I just signed up for the free plan from Wheelhouse. On 10/28 they suggest that I increase my daily rate from a base rate of $158 to $ 349! In fact they recommend pricing, based they say on demand in my area from 10/26-11/1 to be successively in USD: $143, 236, 349, 355, 229 and 140.
I would never have come up with that on my own. I have no idea whether that is based on a local event or another demand-based factor.
But if that is in the ballpark it’s a huge difference in my pricing, and something I would never have done on my own.
Interesting, huh?
The only local event I see is that at the Hanover Theater they are playing ‘Mania: The ABBA Tribute’ on 10/28 and 10/29.
But Wheelhouse says: “We do not artificially increase rates based on a date that has an event connected to it. We do, however, increase rates as we start to react to the demand that is happening in the area. If an event is far out, it’s possible there aren’t a lot of people booking for those particular dates yet, so we’re not reading the reactive demand curves pick up as fast as they would be when we start reading bookings happen and demand in the area.”
But their explanation for the ‘local demand impact’ portion of the recommended pricing includes local events.
So that ABBA show is not driving their model per what they wrote to me but their software says they consider ‘local events.’ I’ve pointed out that inconsistency to them and am awaiting a response.
Regrettably, in the ‘free plan’ they do not show what the competition is that they are using. The user can change the competitive set of properties.
Their model does not say it accounts for the specific reviews that your property receives, though it might (?) take into account the property’s rating. I’m awaiting a response on that.
But I haven’t compared this to airdna or another model. Which other model do folks think I should test it against (assuming I can do so at no cost)?
You say:
Your approach does seem quite basic to me.
SO just the four factors. And of course, the direct, indirect and extended.
So, just the 14 for the eight variables you mention.
So just the major hotels. And of course their parking and pet fees.
Of course, all organized into quartiles.
So, just the events in the ten places.
Well, anyone can eyeball it like THAT!
I was wondering if you had a systematic approach, and something maybe not fully comprehensive but at least an approach that considered the major factors.
‘Nerdy’?? Don’t kid yourself. How about basic to the extreme?
And what’s this about using weekly not daily numbers?? @JJD! I was expecting more than this simplistic approach.
Oh well, I’ll keep asking Hosts here.
Surely someone really thinks about pricing rather than spitballing it like you.
Of course I jest. OMG @JJD ! This used to be your morning coffee routine?! You must be putting all this into a spreadsheet, right? Unless you’re a descendant of von Neumann these numbers are not just in your head, right? Do you have graphs? C’mon, 'fess up. Have you done regression models (afternoon coffee)? @JJD, Have you? What you do is SICK. Oops! This was supposed to be the real part of my response.
Maybe I missed it but from another of your posts I got the impression that you also tracked the size of the market. So I am thinking, for example, that every May 1 you might do a search in your area for say a five day stay on a particular week and see how many listings are available. Is that something that you do? Because that would also be tedious to do, and time consuming, but would track this factor of just greater competition that you’ve cited repeatedly. Yet it would seem a lot of work unless you could automate it, which as I am writing I believe can be done by ‘scraping’ data, though I don’t know how to do it. But I suspect you could get a gig worker say at a place like Upwork to write a program to do that. [I just read that scraping is a violation of Airbnb TOS. So it’s a lot of work to do manually.]
You might want to sign up for the Wheelhouse free plan (I’m in no way affiliated) and/or other pricing site and see what they get as pricing for you, just as a point of comparison. You might find its blog on its methodology something to read while you’re multitasking. https://www.usewheelhouse.com/blog/wheelhouse-pricing-engine/
Thank you for sharing.
P.S. You know, numbers under ten should really be written out. This was a huge --blinding – distraction from what you were saying. [And in your second sentence the period should be in the parenthetical, like I do here.] But it’s apparent that you’re not at all detail-oriented. Oh well. [Sigh.]
Not really that interesting @HostAirbnbVRBO you could easily have done your market research yourself on what your competitors with similar properties are charging locally and adjusted your pricing yourself .
That’s what I do and add on a premium due to my six years of five star reviews .
I also add premiums at weekends, key holidays and for major events relevant to my target customer.
What will be interesting is if you see a drop in bookings due to huge price hikes they suggest.
Also any host would be a fool not to look at price increases during major events in your area that are likely to be of interest to your target customer .
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Supposing the recommendations of Wheelhouse [or another provider] are in the ballpark then the fact that I could ‘easily’ [so you say] have done this myself then just asks the question of whether I’d like to spend my time that way, or instead pay $240/year to the provider for that research. For me that’s a no brainer, I would pay the dollars rather than in my time.
I’m flabbergasted at the pricing they suggest. To me the issue is whether they’re remotely right, which is a question you hint at too by wondering what happens to bookings with such price hikes.
Identifying ‘major events’ if my target market is easier said than done. I mentioned that ABBA is playing at a local theater. But would that drive STR rentals? I wouldn’t begin to know how to figure that one out. Do people really travel for hundreds to miles to Worcester to see ABBA and look for a place to stay overnight? I don’t know but I just wouldn’t think so.
So, it remains interesting to my little mind.
I start out with the rates I’ld like to get for weekends and weekdays about 2-3 months out. If I’m pretty booked, I leave the rates alone.
As I get closer to the month, I start monoriting my competition. I like to show up as 1 -3 listing in the Boston area for a whole unit at my price point. If there are a lot of STR who lowered their rates and I’m not showing and I have a lot of open dates, I’ll bring my rate down or run a promotion. If I have random days in the middle of the week, I’ll open them up to one night bookings and add a promotion.
For me, I live in the apartment below I get lots of deductions on utilities etc for just having the Airbnb and my mortgage is nearly paid off so I have low overhead BUT I don’t want to give away the STR plus I’ve learned that if you go too low then the quality of the people renting will also go lower.
Another bonus for me is that I’m the cleaner now and I more than doubled my rate after I reopened so even a 1 night books really comes out lucrative for me.
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What is the difference between lowering your rate and running a promotion?
What kinds of promotions do you run?
Any of the pricing services work best when there are lots of similar properties in a small area. I’ve never checked any of them - there are only 30-40 vacation rentals within a couple of miles of us, with sizes from one-bedroom to seven bedroom and property values from $200,000 to $5 million (US). In high season, we get a much higher price for our place than similarly-sized properties due to our reviews, location, views, amenities, and style. In low season (mostly late Aug - mid Nov), we still get a premium but it’s smaller.
I analyze the competitors’ prices and availability about once a week, including the nearest comparable-quality resort, and have color-coded the differences. But that’s mostly “eyeball” guidance. We don’t really have events in the area, but I research spring break dates at the public schools in the US, and of course know the major US holidays.
My major advice in determining prices is to ignore the siren song of 100% occupancy (hotels target 70%). You won’t know the limit until of your market value until you cross it. So you have to be prepared that some nights just won’t get booked. For example, we had 100% occupancy in 1Q of 2017. In 2022, 1Q was 8% lower occupancy than 2017, but the prices were 42% higher.
Your availability restrictions will impact your price, too. We require Sat-Sat stays in high season. I could probably increase prices 10% if we weren’t that restrictive, but we could easily lose 15-20% occupancy.
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Uh oh, you’re asking for trouble here!
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I know but I’m not getting any! 
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I know many Alaskans that burn/gain a lot of Alaska Airlines miles attending concerts in Seattle. They all have to stay somewhere!
Don’t underestimate how strongly fans feel about their favorite performers, whether musical or athletic, and how much they’ll spend to see someone in person. I’m not an ABBA fan, but I know some who would fly across the country to see them.
Unfortunately most of the performers that I would fly somewhere to see have died. ;(
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OK. I did as you suggest, showing the number of available places both for a stay with four guests, and one with six guests. I did not match the amenities of my property because I don’t really know what in my property is valued beyond the pool say in the months of July and August. Plus I just wanted to get the big-picture methodology detailed. If I were to define my competitive set beyond the pool, it would be: entire place, quality >= 4.8, # of bedrooms, bifurcated into a group that has one bathroom, and a group that has more than one bathroom. I believe a comparative advantage of my property is its aesthetic values but don’t know how to incorporate that into a qualitative model, nor what its weight would be.
I show the data and a few graphs below of the simple model of availability to accommodate four or six guests.
I’d be interested in your and others’ observations and a critique of mine.
My Observations of this market in Worcester:
Regardless of length of stay the supply of properties that can accommodate four guests is about 2.25X the number of homes that can accommodate six guests.
The supply of properties that can accommodate six guests grows more slowly in the future than does the supply of properties that can accommodate four guests.
Weekends of relatively lower demand: 9/16, 9/30 but not dramatically so
Weekends of relatively higher demand: 9/23, 10/7 but not dramatically so
Availability of properties that can accommodate six guests increases more slowly over time, suggesting higher occupancy for these properties
Nothing here suggests that the week or weekend of 10/28 will experience high demand
Here’s the data:
| Availability | |||||
|---|---|---|---|---|---|
| Weekends | 4 guests | 6 guests | 4 guests | 6 guests | |
| Fri-Mon | Fri-Fri | ||||
| 7/8/22 | 43 | 32 | 7/8/22 | 34 | 34 |
| 7/15/22 | 48 | 31 | 7/15/22 | 32 | 13 |
| 7/22/22 | 71 | 24 | 7/22/22 | 53 | 53 |
| 7/29/22 | 82 | 33 | 7/29/22 | 74 | 31 |
| 8/5/22 | 104 | 45 | 8/5/22 | 92 | 41 |
| 8/12/22 | 114 | 45 | 8/12/22 | 93 | 39 |
| 8/19/22 | 115 | 43 | 8/19/22 | 101 | 40 |
| 8/26/22 | 124 | 50 | 8/26/22 | 105 | 45 |
| 9/2/22 | 149 | 66 | 9/2/22 | 127 | 64 |
| 9/9/22 | 168 | 70 | 9/9/22 | 155 | 68 |
| 9/16/22 | 204 | 86 | 9/16/22 | 180 | 77 |
| 9/23/22 | 164 | 69 | 9/23/22 | 172 | 78 |
| 9/30/22 | 189 | 84 | 9/30/22 | 173 | 74 |
| 10/7/22 | 161 | 59 | 10/7/22 | 146 | 56 |
| 10/14/22 | 147 | 69 | 10/14/22 | 142 | 61 |
| 10/21/22 | 198 | 92 | 10/21/22 | 201 | 92 |
| 10/28/22 | 212 | 102 | 10/28/22 | 218 | 105 |
Here are some graphs
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I recently started using Wheelhouse. I have tweaked prices as some of their rates are too high, yet I am happy with results.
Keep in mind that many of settings you normally would do on Airbnb, etc now have to be done at the Wheelhouse level. For example, I have a 3 night minimum over Labor Day Weekend, which got overriden by Wheelhouse 2 night minimum. I had to change it which then synced to Airbnb.
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Thank you for your input.
Did you consider other pricing services? If so, why Wheelhouse?