When you first start hosting on a platform such as Airbnb it can be difficult to decide how much to price your nightly rate. I struggled early on as I felt as if the nightly price was too high. I didn’t want to overcharge and have guests feel ripped off. So here’s how to decide on your nightly Airbnb price, from my experience.
At the same time, there is a high risk to hosting, particularly when you host a whole place. This is solely down to potential damages or the risks of having strangers in your home. I make sure this plays a part in basing my nightly rate.
Compare with your Competition
When deciding how much to charge, see what else is available in your area by searching on the same platform you intend to host in. This will help assess your competition and base rate.
Don’t be discouraged if the surrounding properties offer more than what you can provide or seem more luxurious than what you have on offer.
The great thing about short term rentals is that every guest will have a budget and each host can fill a particular niche.
Even if there is a huge amount of competition in an area, you’ll be able to find a guest looking for accommodation within a particular price range that you’ll be able to meet.
When reviewing other properties in the area, see how many other places match yours in terms of style and number of guests they can accommodate. In my local area there are several 1-bedroom apartments, some are decorated a little more basic and functional in terms of style in comparison to mine and some are a bit more plush such as newbuilds.
My experience
I would consider mine at the lower medium end of price point and I manage to get regular bookings with a calendar that stays relatively full. I’ve based my nightly price to reflect this.
I think my popularity on Airbnb is because I offer very good value for money and the flat is nicely decorated in a modern style.
Despite this, I notice other properties which are very basic and slightly dated charging much more than my place and I personally find them a little overpriced in comparison. Despite this, they still appear to get plenty of bookings.
Find your ‘USP’
USP, or ‘Unique Selling Point’ is what makes you different from the competiton. Take time to review other hosts listings to see what they offer in terms of amenities and fixtures as part of the property they are hosting and find a way to stand out.
For example, if your local area is surrounded by only 1 bedroom properties the same specification as yours, you can’t magically add another bedroom to your apartment to supply a different type of demand.
You can however add or feature such as a sofa bed if you have one, to fill a demand for accommodation suited to more guests. This is a great way to make your property versatile and will get you more views and potential bookings because you can accommodate more people overnight.
When multiple properties in the area offer the same number of beds for accommodation, the only real difference between them is location (or proximity to desirable locations such as stations) and style/decoration.
Take both of these points into consideration when deciding your nightly price and point out any strengths your place has.
A dated property could expect a lower nightly price than a modern one. Be sure to price fairly. In the early days of hosting you can undercut any competition from nearby hosts by reducing your price.
Finding your strengths
Assessing what pro’s your property has can help you work out a fair nightly price. It can also aid identify points that act as pull-factors to get guests to book.
If you have a permanent pool or hot tub available for use, list this. Make a point of showing it off in the listing with images, listing description and the listing title.
If you have a large spa shower room or decking area for leisure, free coffee pods and coffee machine for guests to use – whatever it is, find points that make staying at the property enjoyable, however small and make sure to photograph and mention them in your listing description.
You may have to drop your price to start with
When you first list your property somebody out there will have to bite the bullet and be your first booking. Guests on Airbnb can be hesitant to book places that have never been rented out before.
All hosts have to start somewhere. Because of this, you may have to drop the price and undercut your competition to get that first booking. Once you’ve landed that first 5 star review, you can work on bumping up your price to match your competitors.
Take into account Cleaning & Airbnb Fees
When guests book they are also charged an optional cleaning fee set by the host. They are also charged a percentage by Airbnb.
Hosts don’t get a cut of the Airbnb fees, but the guests will end up paying a higher total price overall.
Unfortunately, guests don’t take this into account so will consider the total price paid when leaving a review regarding ‘value’.
Keep this in mind when pricing – you may have to drop your nightly price. This way it avoids guests feeling like the property is overpriced.
Beware of bargain hunters
Price fairly from the start and you should have no issue with getting bookings. If you aren’t getting many, leave it a few weeks and reduce the price until you start getting reservations. This can help you reach a fair price. Be wary of guests who ask for discounts when you reach this point.
I was once told “Guests who don’t respect your price, won’t respect your place” and if you’ve priced fairly, I fully agree with this statement.
Often, guests who ask for further discounts will have unrealistic expectations. These guests can often be more critical overall or be more demanding. This just makes for a more unpleasant hosting experience and potentially poor reviews and what host wants that!?
Finding your perfect spot in the Airbnb pool of hosts is becoming more and more difficult. Year on year as the platform gets busier with properties, it becomes more competitive. This doesn’t mean that there isn’t room for everyone, far from it.
As explained, Every guest has a different budget and different trip they need to take. Because of this every host can earn good money finding their place and price point with short term rentals. It can just take time to settle into your accommodation niche.