Are you considering listing your property on Airbnb? If so, it’s essential to understand how pricing strategy can affect the success of your listing. This can be difficult because there is no set pricing guideline.
Many factors go into setting the price of your listing, including competition, location, and amenities. One way to help decide what to charge is by looking at similar properties nearby.
With Airbnb, hosts can make significant cash while working less. As a landlord, one of the most critical aspects to consider is how much your competition charges. When the competition for Airbnb rentals in your area is heating up, it’s important to stay on top of what other hosts are doing.
You should always be aware and up-to-date with what other landlords in similar areas charge their guests and what they offer for the same price.
The more value a potential guest sees in your property, the more likely they will book your listing.
Type and location of the property
The type of property you choose for your Airbnb listing can make a big difference in the price.
Airbnbs offer many different types, and it’s important to pick one that matches up with how much people will be willing to pay. An entire house overlooking a river will go for a higher cost than a shared room, or an apartment may only require half-rate prices.
It’s also essential to study your location and what people are renting, and occupancy rates there.
You’ll want a pricing strategy for both seasonal demands as well as during times of low demand.
If you’re not sure how much to charge for your accommodations, it’s important to find out the demand rate in a particular region (such as here in New Orleans) and the standard rental prices in the area.
The pricing strategy you use will, in large part, be determined by how close you monitor your property as well as how much time and energy you have to put into the property.
The different fees available (and discounts) as an Airbnb host
Below are the various fees available as a host of an Airbnb property.
A Cleaning Fee
The cleaning fee is for taking care of your property and an incentive to ensure that guests leave it in good shape. Of course, there are downsides: charging more than what they would have otherwise had to pay can deter guests from staying at all because their bill now includes expenses that they may or may not feel are warranted.
The Extra Guest Fee
When a place is booked, guests can decide to invite a friend over. Charging this kind of fee is up to the host, and it can also be spelled out in the description of the listing. Some hosts are okay with it, while others charge for it.
A Security Deposit
One way to protect your property from future damages is to require a security deposit and is an excellent way to protect your property from any future damages.
Also, guests should know what amount will be put down when booking their stay, especially those who may need more advance notice than others, so there aren’t surprises during check-in.
Many guests prefer not to pay a deposit since it signifies that the host does not trust them.
Weekly or Monthly Discounts
They are one of the most powerful tools for increasing the occupancy of your property. They can be used to increase your bookings, and you should consider including weekly discounts or monthly ones if you want people to stay longer.
It increases the likelihood that the renter will tell their friends and family on social media, resulting in more bookings over time.
Pricing strategies for your Airbnb listing
Maximum Rate Per Night Strategy
If you are looking to get the most money out of your rental, this strategy can help you increase your net profit from each booking.
The aim here is to get the maximum amount of money with the least amount of effort. There won’t be as many bookings, and so you will have to deal with fewer guests.
Long-term Rentals Strategy
If you are away from the property for an extended period of time, say 3-6 months, you could price it to attract a more long-term renter. That way, there is guaranteed income.
Dynamic nightly rate strategy
This strategy is ideal for someone who wants to stay on top of the rental of their property. It requires staying on top of your competition and adjusting your price accordingly to remain competitive in the market. It’s hard work, but the rewards come in the form of the balance in your bank account.
In some situations, maximizing bookings rather than being stuck on a price can benefit your Airbnb business. It benefits you, the owner, to stay booked even if it’s at a lower rate. Not only is this an opportunity to drive more 5 star reviews but an opportunity to continue to put cash in your pocket.
Having a good amount of 5 star reviews will increase the credibility of your listing/property and will help your property stay booked more often.
How We Can Help
The decision to list a property on Airbnb can be complicated. Many considerations go into an Airbnb pricing strategy, considering the cost of your time and tools, discounts for booking early or certain days of the week, etc.
In order to make an informed decision about whether this platform is right for you as a landlord or not, it’s essential to understand all sides. We hope our guide has helped lay out some key factors, giving you more information when making your own choice.
If you’re interested in hands-off Airbnb property management in New Orleans, give us a call today at 504-356-8333 or contact us online for a free rental analysis!