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?
1 Like
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.
2 Likes
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.
2 Likes
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.
1 Like
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)?
TL;DR: “Yes”. (I’m answering @HostAirbnbVRBO in a format that is too long and convoluted for some, but they and I have had conversations like this before so I’m rolling with it because I think it’ll be okay with them). But I know it’s messy (or stream of consciousness).
Basically, yes. I don’t use a pricing tool and, admittedly, I don’t know much about them.
I’m on my calendar every day and additionally any time someone books. It used to be my routine coffee time in the morning but since I went back to work full-time, I just do it at lunch. It’s gotten simpler over time, quicker (or I’ve gotten lazy) but I check it against my market (airbnbs, vrbos and hotels) every day at least briefly.
Pricing is based on, more or less in this order: 1. local events 2. five specific hotels that are direct competitors 3. other airbnb listings which are further broken down into direct, extended, indirect and merely in the same neighborhood competitors 4. all local hotels overall
For the airbnb listings, it’s not just their pricing, I keep track of (not daily, maybe weekly) the listings, house rules, min and max stays, cancelation policy, ratings and recent reviews (and recent replies to reviews, lol, because we have some characters here) of the airbnbs that are direct or extended competitors and any new or returning (there are 14 in the area that only host in the summer, 1 is a direct and 2 are indirect competitors for us.
I also specifically keep up on the amount that the major hotels downtown charge for parking fees and for pet fees because they often exceed what the airbnb service fee which is something I always take into account, the service fee. We are in a residential area walking distance to downtown and are a hint of hotel style so that’s why I pay attention to some of the downtown hotels. But people don’t book hotels as much as airbnbs for Thanksgiving, 4th of July or Christmas so hotels are disregarded for those times.
Ultimately, I think the hotels are generally better at pricing than our airbnb competitors. They spend a lot of money and manpower on figuring out prices and have more at stake so when in doubt, I go with the pros/hotels. Ideally, my price is the same or better including the service fee and cleaning fee as our highest-priced hotel competitors (that are also pet friendly) with parking and pet fees added to their price.
I aim to be in the top quarter of pricing but not the highest. And things have been nutty for the last couple of years, prices have been out of control here. I have taken advantage and charged way too much in a generally not premium time because the pickings were slim and demand was high but I often don’t feel good about that in the end and it’s not because I’m not providing, because I am.
So that’s just something to consider too. I think there’s something, I don’t know the word or don’t like the word I’m coming up with (sacred?), but there’s some responsibility or something about taking in travelers, people who are away from home, something there that has to go into the mix with everything else, you can’t leave it out. So you also have to feel good and just about your pricing (though university graduations or the like are fair game, wheeee, lol).
I keep track of local events, but more than local too. There are a couple of places close enough that when there are events in those places we either get the direct overflow or what I call ‘related overflow’. So I keep track of local events in 3 places as well as at local universities (there are 7 of them).
We don’t book that far out (3-4 weeks ahead, usually two), never have, so on occasion we have something available at the last minute (and sometimes from a cancelation which is moderate for us so less than 5 days) and that’s when I start raising prices. Those last minute bookings are bonus money. People (me definitely) will pay a premium to find a decent place 2 days or 1 day before their stay. Raise those prices at the end.
If this sounds nerdy, it’s just how think and approach things but it’s not complicated. There was a learning curve at first and taking in the information but at this point it’s mostly scanning for changes, new listings, etc and quarterly updates for events and such.
2 Likes
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 .
1 Like
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.
2 Likes
What is the difference between lowering your rate and running a promotion?
What kinds of promotions do you run?
No, I don’t all of that every morning. Most days I just take a few minutes to make sure my settings and calendar are how I left them and have a peek at what it looks like in the area for my next open dates. It’s only when I’m opening up new months or adjusting a price for some reason.
When we had 3 listings all with 1-2 day minimums, I adjusted prices frequently, it paid to keep on top of it with shorter stays. Now we’re mostly only listing 1 unit with a 4-day min so it averages out, it’s not as important. Lately, I’ve only adjusted prices for orphaned days (less than 4) between stays and will have a quick look at my market before making the adjustment.
Yes, I’ll admit to being a bit math-y, especially when it comes to applied math, like probability and logic. But, sorry, no, I don’t have anything as fancy as a spreadsheet. It’s actually pretty low-key stuff and none of it takes much time. I know I brain-dumped out on you so it probably sounds like more than it is.
Yes. I will run specific dates, usually the next open dates on my calendar or if dates that cause concern for some reason. But I also check general demand for my area and this is what I’ve been doing with the other markets I was looking at. It only takes one minute.
It is not terribly scientific but still somewhat enlightening. I’ll show you by running dates for my area and you can run it for yours if you want. I use 3 day weekends about a month apart to get an sense of how things are booking but I don’t go out further than 3 months because many hosts only open 3 months at a time.
Searching:
my area + entire place + July 8-11 = 28 stays
my area + entire place + Aug 12-15 = 77 stays
my area + entire place + Sep 9-12 = 149 stays
Or I could jot these numbers down (but typically don’t) and then check the same dates in the future to see the change in that direction, which is what I did with the other markets.
Also, I occasionally run consecutive weekends to see if I might be unaware of a special event or high demand dates. I also don’t record these anywhere, so it takes less than a minute to just to see them.
Generally, stays decrease in a fairly regular pattern, e.g. dates that are further out have more stays available then the dates before them and so on. What I look for is something that goes against that pattern. As an example, I might come across an availability pattern like this searching one weekend to the next:
my area + entire place + July 8-11 = 28 stays
my area + entire place + 15-18 = 9 stays
my area + entire place + July 22-25 = 9 stays
my area + entire place + July 29-Aug 1 = 22 stays
my area + entire place + Aug 5-8 = 72 stays
my area + entire place + Aug 12-15= 77 stays
my area + entire place + Aug 19-22 = 91 stays
my area + entire place + Aug 26-29 = 98 stays
my area + entire place + Sep 2-5 = 86 stays
my area + entire place + Sep 9-12 = 149 stays
What sticks out to me are those 3 weekends in July that have fewer stays left than this coming weekend and Sep 2-5 sticks out as well, they all go against the pattern. So if I didn’t know why those weekends were booking faster than the typical pattern then I’d want to find out why and I might adjust my price if it made sense.
It works the opposite way too! If a weekend is booking much slower than other weekends then I might get out in front of it and price it more competitively to increase the chance of booking it.
1 Like
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.
1 Like
Are you in a Halloween destination maybe?
@Lynick4442 You must get some Halloween action in your location?
Uh oh, you’re asking for trouble here!
1 Like
I know but I’m not getting any! 
1 Like
What am I missing? I feel so thick right now, I can’t figure it out.
Ok, I got it now. Lol. I’ll get him another time. It’s best he watch his use of quotation marks…
2 Likes
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. ;(
2 Likes