you get what you pay for

Why I’m saying see-ya to pricing algorithms

lookernotbookerIt’s the million dollar question: how much can I get for my Airbnb? Price your listing too high and nobody books it. Price it too low and you’ll kick yourself for losing out (and may bring in problematic guests; that’s a whole other topic). How do you know the sweet spot?

I was a happy early adopter of Airbnb’s smart pricing, years ago when I thought it would save a ton of time updating prices every day. But silly me to think they had my best interest at heart. The more listings are booked the more they make and better for them to rent a million places at half the price than a thousand places at a higher price, so before long their pricing tips dropped below what was ideal, and have lately become patently absurd.

So I moved on to Wheelhouse pricing service. And loved it. Their pricing suggestions were far higher than Airbnb’s, so much so that I doubted anyone would even book. But I gave them a whirl, and what do you know, the bookings rolled in. It was worth the one percent cut they took to get those higher prices, and not have to manually stay on top of my prices.

But then my calendar opened up for a festival weekend when prices skyrocket. And Wheelhouse kept my prices at my base rate. A savvy (or lucky!) traveler snapped it right up on instant book for half or less what everyone else was getting. Ouch.

So I dropped them and went back to Airbnb’s automated pricing, but with my own base and minimum price, not their offensively low suggestions.

But look, you can’t rely on crossing your fingers to run your short term rental business. And the truth is, if it’s easy and cheap, well, it’s probably not the best (as I’ve found).

So I tried something new. There’s a learning curve and it’s not cheap. But it’s pretty amazing.

laptop-on-left-bgI give you: AirDNA MarketMinder. This is a treasure trove of data that hosts can use to make their own informed decisions about how much to price. It’s a bit overwhelming, to be honest, but if you geek out about stats and numbers you’re going to love it.

While you can literally see how your competition is doing (seriously!) and look at historical seasonality to help you predict and prepare for ups and downs, most valuable to me was being able to see at a glance how much listings in my area are going for.

In theΒ Future Supply and Available Rates section you can filter to show listings like yours, and see the average nightly rate at any given percentile. You can also see what occupancy is looking like, both at a glance by color coding, and down to the number of how many listings are available.

What’s this mean? Say I know I should be around the 75th percentile pricing wise (because we have great reviews but aren’t in the top location), I can see that pricing is at $120, and there are only 32 listings available for a particular night. I’ll feel pretty good about listing it for that price. Without that info it’s a total guess as to how to price, or troll around Airbnb trying to gather the same data page by page.Β  (That festival weekend I mentioned? It showsΒ  rates at my percentile are $230 which is what I well could have charged.)

No more guesswork, no more close your eyes and pin the tail on the donkey approach to pricing. They’re pulling real data to help you make real decisions. If you’re serious about getting the best price you can *and* keeping occupancy rates high, this is a worthwhile investment. I say investment because remember when I said this wasn’t cheap? Monthly subscriptions vary by city based on how many rentals the city has. You can plug in yours on their site to see the cost. My biggest issue is that pricing is the same whether you run one little attic apartment Airbnb or manage one hundred properties. The cost in Louisville is about what I make from one night’s rental — that’s steep relative to my income compared to someone pulling in dozens of rentals nightly. I hope they’ll consider offering pricing on a sliding scale in the future. But if it keeps you from one mistake a month, or helps land one booking you’d have missed, it’s paid for itself.

#everydayImhustling disclosure: If you want to check them out, please use this link and I’ll earn a commission. As with everything else I recommend on this site, I only give the thumbs up to products I’ve used and see value in myself.

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