How to Make Money and Increase Bookings on Airbnb
The goal is to make as much revenue as possible, use data to determine how much and when to price your properties.
Dynamic pricing is a widely used tool used by many industries like hotels, and if you manage a short-term rental property, you should be using dynamic pricing to improve your revenue, margin, and make profits. How do you do this? Data. It's all in front of you, just take a closer look:
Data, Data, Data
You need to analyze your data constantly to inform your pricing. Start with looking closely at your inventory data—basically your occupancy rates, and what your competitors are charging. This should be used to inform other decisions to accurately price your property.
Occupancy
Know the details of your property's occupancy data (numbers of bookings over specific timelines) to get a full and clear picture. If you have several properties, looking at occupancy data can illuminate simple things that can allow you to make better pricing changes. If you don't know your data, you won't know to change the prices.
Check Competitors
You should be constantly looking at the pricing in the entire area your properties are listed, daily or at minimum weekly. Competitors can include the same type of properties as yours, the same rental platform, other rental platforms, and hotels. Are their rates going up suddenly, or are they low? Why is that?
Price Accordingly
Knowing when to change the prices of your property based on demand requires flexibility. Once you have your occupancy data and you've looked at other competitors, if you see that your property is completely booked up 90 days out, say for example 60% of the time, you're doing something wrong (pricing it too low). You can increase the price a bit to correct for market demand. If your property isn't doing well however, and it's the high season, you can tempt potential guests with discounts or flexible offers.
Timing
Monitoring your data to get a big picture will help you determine pricing but looking too far in advance can give your distorted picture. The best timing [for me] has always been 60 days. Pricing and other factors change too much to give you a good forecast for revenue. Paying attention to other factors around timing can also inform your whole picture for better pricing:
Events
Being acutely aware of what is going in your area is vital to dynamic pricing. This is more than just low and high season, you should know if there's going to be a popular festival coming up, or a popular concert in your area, for example.
Get Those Early Bookers
Knowing how to price in advance can benefit your revenue and profit margins. Early bookers are people who have booked your property way in advance, paid up front, and least likely to cancel--they've likely booked flights and a vacation.
The Bottom Line
Dynamic pricing can also bring problems you should be aware of: if your prices are too high, people won't book your property. But if it's too low, you can lose money. By using dynamic pricing, you're disrupting the demand.