Finding the Right Price for Your Airbnb Property
Over the years we've been asked this question numerous time. "How do I find the right price for my Airbnb?" There are many answers to this question and in this article, we'll explain how we find the right price for an Airbnb in Australia and New Zealand.
How to set my Airbnb price
First things first. Before we delve into finding the right price for your Airbnb, it's important to know how to set a price for your Airbnb. Follow the steps below to update your default pricing.
Step1: Click this link to go to your listings on airbnb.com.au
Step2: Click on Pricing at the top of the page. If you have more than one listing, be sure to select the correct listing from the dropdown.
Step3: Click on Edit and enter your nightly pricing.
Step4: If you would like to update your Cleaning fees, go to Standard fees and charges.
Step5: Click Edit next to the Cleaning fee.
Step6: Enter your desired cleaning fee and click Save.
Remember to disclose any other fees as well. If you allow pets in your Airbnb, be sure to note an additional pet cleaning fee upfront. The same goes for any additional late check-out or early check-in fees, etc.
How to Create an Airbnb Pricing Strategy
It's no secret that the short-term rental market offers a higher rental income for property owners than the traditional long-term rental market. Airbnb allows property owners to take advantage of price surges over holidays, long weekends, and festivals. It may be a bit more effort, but the reward of higher earnings make it worth it. One of the highlights of Airbnb is that you charge the guests for cleaning your property and a cleaning fee is a standard extra charge.
Take advantage of Airbnb's flexibility by changing your prices whenever you see an increase or decrease in demand.
Know your neighbourhood market.
Websites like Airdna.co provide insightful data into the average and top-performing properties in any area or city around the world. When searching the average Airbnb nightly rate in Sydney, Airdna showed an amount of AU$190 during low season and AU$235 during peak season in December. Their data also shows that in Sydney, around 86% of short-term rentals are on Airbnb with 5% of rentals listed on Vrbo. A low 9% are listed on both platforms.
Airdna is a good platform to benchmark your nightly rate. Although if you want a more detailed look at the prices of Airbnbs in your neighbourhood, you may have to do a manual search. Searching for accommodation on the Fleurieu Peninsula, below, quickly shows the average nightly rate for properties accommodating 2 people.
Know your extra fees
The next step is to calculate the costs of managing, cleaning and maintaining your Airbnb property. If your property is in a very humid or icy area of the world, it's reasonable for the host to charge an extra air conditioning and heating fee. As long as you note these fees in the Airbnb listing upfront, guests will have no problem paying as they know what to expect.
Some Airbnb hosts and owners also like to charge a security fee. According to Airbnb, the amounts charged should be between US$100 - US$5000 for the duration of the stay. A good rule of thumb is to charge 1 night's rate extra. Should you need to make a claim, you can do so within 48h after the guests have checked out.
Create a comparison table
Once you've done your research, create a comparison table to visualise your property's nightly rate and extra fees to those of your Airbnb neighbours in the area. Airbnb offers a smart pricing tool to guide your nightly rate but we recommend creating a comparison table to get a true look into the prices for Airbnbs in your area.
Once you have a good overview of the average pricing and what your Airbnb will cost to manage, you're on your way to determine your nightly rate.
What is Dynamic Airbnb pricing?
Dynamic Airbnb pricing is a pricing strategy that changes the nightly rate as the supply and demand for Airbnbs in your area changes. If you want to optimise your revenue and increase your earnings, dynamic pricing is the way to go.
Don't make the rookie mistake of setting your Airbnb nightly rate and leaving it as is. If your Airbnb is in a holiday market on Australia's east coast, consider increasing the nightly rate from December to March. Then look at decreasing it again during the quieter winter month. Have a weekend coming up but your Airbnb isn't booked? Decrease the nightly rate by Thursday to encourage last-minute weekend bookings. A night booked at a lower rate is, after all, better than an empty Airbnb.
We hope the above information and tips helped you create a pricing strategy for your Airbnb. When in doubt, you can always rely on the experts to help you out. Give us a call or sign up to our website and we'll give you a free earnings estimate for your Airbnb.