Maximising Airbnb opportunities can be challenging especially when it comes down to pricing to align with market factors. You obviously do not want to price yourself out of the market by charging more than everyone else while on the other hand, you do not want to lower your prices too soon either.
Today we will share a few key strategies to help you determine the right price to set for Airbnb bookings.
Your Rental location
Location, location, location. Yes, your location is an important consideration when setting your rental property price.
How close you are to events, transportation, conferences and other points of interest all contribute to the demand of your rental property. Make it a regular point to check out the local papers and public notices to set your prices based around these key dates.
The competition in the marketplace
Having one eye on the competition and noting their room rates can be a good indicator of where things are at in regards to demand. Looking at past rental rates charged by others can also help you with your pricing but also consider factors such as current availability in the marketplace.
New policies and Airbnb rules (like local tax hikes) may also affect the number of rentals in the marketplace so don't get too complacent. If you notice others have lowered their room rates then you may like to consider adjusting yours as well to ensure your property is competitive. Just make sure that your lowest room rates are still profitable!
Airbnb statistics can help to determine what price to set as well. While we do not have any stats in New Zealand or Australia we do know that in the US the average user is aged between 25 and 34 and seniors are now the fastest group (not only as hosts but also as guests).
Another interesting statistic is that when compared with other listing sites Airbnb guests stay 2.4 times longer and in urban destinations, the nights range from 2.9 to a whopping 6.3 nights.
With these sorts of stats, you can play around with your rental prices on Airbnb and still make a healthy profit.
According to property managers, the cleaning cost is the largest cost with any rental so make sure you factor these into your pricing. While we know its important to be competitive there is no point in giving away rooms to a level where it there is no profit at all!