You would be hard-pressed to find an Airbnb host — or really any vacation rental owner — who doesn’t want to book more nights and earn more money.
The problem: figuring out the right price — every night — for your listing is one of the hardest parts of running a rental, if not the hardest.
Look no further than the scores of forums and Quora threads where thousands are seeking advice on how to maximize the dollars generated by their Airbnb.
The Vacation-Rental Industry is Getting Complex
Thanks to the success of Airbnb and other major platforms, the short-term rental industry is one of the most exciting and fastest-growing segments of travel; in fact, it is projected to be a $190 billion industry in the next five years.
What does that mean?
It means massive opportunity.
But it also means that it has become one of the most diverse marketplaces, where hobbyists and professionals are selling a range of inventory side-by-side across the globe. This creates wild changes in supply and demand in local markets everywhere, making staying on top of your pricing a really big challenge.
And as the industry continues to grow, the current pricing solutions and techniques become outdated and not effective for your business’s bottom line.
- Look at your competition in your area and undercut: This might be the simplest method, but the issue is right in the approach — you’re, in essence, leaving dollars on the table to get “heads in beds.” In fact, you might start taking losses on nights.
- Look at past performance: Using historical data can give you a sense of how your listing has booked before, which can generate interesting insights — but sometimes not much more than that. That’s because we know demand is always changing, and we also know that your competition has changed since last year. So, what worked last year won’t always work this year.
- Use market reports: Market reports are really great at giving you a snapshot at a moment in time. But moments in time constantly change. They just can’t keep pace with the industry, and they require a lot of work on your end.
- Offload to a property management service: There are helpful services out there that can help take a lot of the hassle out of hosting, but when it comes to pricing, the approaches they use tend to be a blend of the above three.
- Airbnb Smart Pricing: While this offers a step up from the other methodologies, you still aren’t getting prices that accurately reflect what’s going on in your market.
Dynamic Pricing Captures True Demand & Revenue Potential
We’ve seen a rise in dynamic pricing solutions and have taken a keen interest, as they use large amounts of real-time data to get your rental the optimal price every night.
Here’s why they are the most effective way to price your Airbnb:
- Have a true sense of demand in your market, and really, in your neighborhood. Demand is really the number-one driver for bookings and earnings. Your prices need to reflect what your consumers are willing to pay. Thanks to massive data collection — everything from local events to seasonality in your market — and real-time analysis of that data, you get the most accurate window into demand, any night of the year.
- Get different rates for different nights: We all know that a Tuesday should be priced differently than a Saturday, and that a Saturday in November probably calls for a different price than a Saturday in say, July. Dynamic pricing offers the insights and tools to know what those best rates are.
- Automated rate posting to stay strategic year-round: Instead of manually updating your rates throughout the year, dynamic pricing solutions automatically update and post the most competitive rate for your listing for that given night.
- Insights into your performance and your market’s performance: In addition to getting the best rate for any given night, some of the solutions also give you a meaningful look at the health of your listing and how it’s doing relative to your larger market. That means no longer being in the dark about performance.
- Forecasting and planning: You can also get a great sense of revenue projections and booking projections, so you can better plan for the year.
The Pricing Engine That Understands YOUR Business Needs
Most of the pricing solutions out there are one-size-fits-all. These are still pretty solid alternatives to the current methods of manual pricing outlined at the start. However, they end up giving you rates that might make sense for one host, but not another.
But one pricing platform has made a really innovative push to personalize their pricing model around your unique business goals and needs: Wheelhouse.
Here’s why thousands of hosts, owners, and property managers price their rental businesses on the Wheelhouse platform:
- Fully integrated across all the major booking channels: this allows you to maximize the exposure of your rental.
- Personalized pricing strategies: Wheelhouse understands that hobbyists and professionals have different goals and needs in the space, so they let you customize their model to fit your preferred approach. You can tailor everything from last-minute discounts, weekend rates, and your strategy to how conservatively or aggressively you price upcoming unbooked nights.
- Built for every host type: since their platform is adjustable, any host type can benefit from their pricing strategies. They have set-it-and-forget approaches for part-time hobbyists looking to maximize bookings and in-depth controls for professionals with dozens or hundreds of listings.
- World-class data science: they have a dedicated data science team made up of four PhD’s, who have built the most sophisticated model and continue you to evolve it to make it increasingly more intelligent.
Start experiencing the Wheelhouse difference for your rental with three free bookings, so you can capture the value of your listing and thrive in this fast-growing space.