Being an Airbnb property manager is like running a business – shaky and uncertain at times, but highly rewarding at others. And of course, to make the most of it, you’ll need to know as many tricks of the trade as possible. In this post, we are talking about maximising your Airbnb income by utilising smart pricing.
“Isn’t it a one-off decision – I set the price, and start getting guests?” you might ask. Well, it can be, but although London is one of the most visited cities in the world, we wouldn’t recommend static pricing. See below for a list of common pricing pitfalls, and how best to avoid them.
Achieving a 100% occupancy rate for several months in advance may look like a good sign, but in reality, your place could just be underpriced. Look at other local listings – if they’re still not fully occupied, you could be missing out on revenue. And, sometimes, if the prices are higher, it’s more financially rewarding not to be fully booked.
Achieving decent occupancy rate for half of the time, but being practically unbooked for the rest
To optimise your occupancy rate, you’ll need to pay attention to seasonal trends and avoid being in demand only for the high season and being overlooked in the low because your price is too high. In London, the period from April to July is considered the high season, while September to October is considered the low. To achieve optimal occupancy all year round, you have to adjust your price dynamically in line with both demand, and local pricing trends.
Hosting guests mainly for high season or special events held in London.
Obviously, in this case, you are overpricing and leaving travellers with no choice but to book your house while the demand is huge. At times like this, it makes sense to bump up the price, as your property is at its most desirable, and accommodation is usually harder to find.
But … will guests give you a positive review, and come back on future visits? So, how to avoid these mistakes and start pricing smartly?
Know your competition. If you have no idea how to approach it, start with the Airbnb search tool. Look for properties similar to yours according to predefined parameters – area of London, number of bedrooms, capacity, accessibility of public transport, etc. Search for several months in advance and try to see the patterns and reasons behind changes in prices:
TIP: Look for listings with a similar number of reviews to yours – those with more reviews and more traffic coming through are more valuable, and will be dynamically priced higher than those without.
Although much more expensive, hotel rooms can be very convenient in identifying dynamic pricing in relative terms. Hotels are very good at distinguishing demand between weekdays and weekends, so check out several hotels in your area, and analyse differences in percentages.
Airdna City Intelligence Report will give you an idea of the average monthly prices for properties in your city.
After the fair value of your home has been determined, don’t rush into setting this as your listing’s base price; as a newbie, you can’t compare yourself to those with numerous reviews. Instead, price your home lower than your competition to get your first guests in, and start to dynamically raise the price once you have at least 5 reviews and your star rating appears on your profile.
As we have already mentioned, large events of international interest tend to attract a lot of tourists. Some of the most popular events in the city are London Fashion Week, Wimbledon, Royal Ascot, Guy Fawkes’ Night, New Year’s Eve, and Notting Hill Carnival, to name a few. Keep a note of what’s happening in the city and your area particularly. Good resources for this are Timeout, Eventbrite, and local websites. Also, check for conferences, music festivals, and the times when universities commence.
When setting a price, do some forward-thinking; people like to book way in advance, so make sure that you’ve set right prices several months before.
Pricing for your Airbnb listing requires a trial & error approach. We would recommend not giving away all of your reservations months in advance – save some by temporarily blocking your calendar dates for last-minute bookings, which are usually more expensive during high season. After all, you can always drop them back down if the audience doesn’t respond to price levels.
As you can see, maximising your Airbnb income requires a considerable effort, of which pricing is only one aspect. If you are an Airbnb Host interested in short-letting your property, but do not have the time to take care of your flat or guests, we, Pass The Keys, are here to help! Call us now at +44 20 8050 2818 to get a Free Assessment