There are a couple pricing tactics you can employ to make sure you get the most money from your space.
Before going any further, We should say that Airbnb is always tweaking their pricing and calendaring system, so any specific details about how to navigate change. The basic concepts, however, remain the same.
These are pricing tactics. How you actually set different prices for different dates is covered in the Calendar section.
First, you need to do market research for your area. Go to Airbnb.com. Act as if you were going to book by searching for “Denver, CO.” Leave the arrival and departure dates empty and click “search.” Below is a version of what you’ll see. On the left are the first 18 listings chosen by Airbnb. On the right is a wide-view map of Denver.
This doesn’t tell you much. We like to get down to residences of similar size in the same neighborhood as mine. So if your listing is for a private room, click “private room.” If you’re renting out your entire place, click on “Entire home/apt.” Also, click on the “filter” button. We like to sort by the number of bedrooms. But that’s all. Don’t try to sort for everything your place has. You want to see the pricing of places similar to yours. If you get too specific, you won’t get a good sample. (Also, don’t click on neighborhoods. You know your area best and will use the map to sort here in a second.)
Now that you’ve chosen the number of bedrooms and clicked “apply filters,” you’ll get a revised list. Move to the map. Make sure the “search as I move” box is clicked near the top. Then zoom in to your area. (You can move the map by clicking, holding and dragging.)
For example, say you’re going to rent your entire 2-bedroom townhome in Capitol Hill. Click “entire home/apt,” opened up the filter and chose 2 bedrooms from the drop-down menu, and then zoom in and drag the map to show about a 10-block radius within your home.
Now you’re seeing what other similar residences are listing for in your area. As you’ll see in the picture above, the range is still wide from a basic-looking 2-bedroom apartment for $84 a night to a “Penthouse Apartment in Capitol Hill” for $275. Click on a few, flip through the pictures and read the descriptions. Which ones are most similar to yours and have a couple reviews. What are they charging? This is your base price ... but not your starting price.
First low, then high
Once you’ve estimated what a place similar to yours in your neighborhood is actually renting for — your base price — take 10-20% off of that. This is your starting price.
Why are you doing this? Because you want to stand out for a bit and Airbnb prioritizes its search results based on a few factors, one of which is good reviews.
With that in mind, start your pricing at least 10% lower than the surrounding locations so that you have a better chance of getting booked immediately. Once you get one or two reservations and positive reviews under your belt, raise the prices incrementally until you see a slowing of requests. Then back off a little and that’s your magic number.
When you’ve got good reviews, future potential guests will read them and believe that those guests paid whatever you’re currently charging. First low, then high is a strategy that has worked for all my places.
Later dates, higher rates
One caveat to the first-low, then-high rule is for dates many months out. If you set a low rate for dates three months out, it doesn’t matter as much that you get booked. You’re not going to get that good review for months. Thus the benefit is not as strong.
If you’ve staged your place well and have nice photos of it, you shouldn’t have much trouble booking the place. You’d be surprised how many people will book last minute. In fact, one professional Airbnb host wrote in his blog that if you’re fully booked more than three weeks out, your prices are too low.
So if guests will book your place on short notice at a reasonable price, why not take a little chance with higher prices a few months out? If your place continues to have an opening as the dates get closer, then lower them gradually until you attract someone. We have had success with this strategy, booking at least a few guests a few months out at considerably higher prices than others will pay as the dates approach.
Big events, big returns
You want to act like hotels when it comes to pricing. And have you ever tried to book a hotel room in a city in which a big event is happening? Prices are sky high. So should prices.
Higher demand equals higher prices. The Great American Beer Festival is a great example of an event that draws thousands more to Denver than are normally visiting. The Cannabis Cup. Opening day of the Broncos. Any big festival happening near you.
How much you should charge involves a lot of experimentation. We look at what hotels are charging during a normal week and then see what they’re charging during the big-event weekend in question. What’s their percent markup?