How to Set Your Airbnb Holiday Rental Pricing
When it comes to your managing your Airbnb holiday rental property, and the way you price your property, it’s important to consider three critical aspects;
- You should never have the same pricing all year round.
- To consider the minimum nightly stay for different periods throughout the year in order to help maximise your revenue.
- To increase or decrease pricing based on seasonal factors
- Be ready to make pricing adjustments based on your historical busy or slow booking periods in the year.
When should you consider changing your Airbnb holiday rental pricing?
Weekends
Don’t sell yourself short on weekend pricing. If demand is high don’t offer 1-night stays and make sure that your rates for Saturday and Sunday night combined equal the same rate as Friday and Saturday night combined.
Whilst Friday and Saturday night stays are more popular with weekenders, a proportion of guests prefer to stay Saturday and Sunday night. Don’t miss out on a high weekend rate by dropping your Sunday night rate.
As a rough guide, if you are within three hours of a major city your nightly weekend rate should be roughly double your midweek rate. If you find that weekend dates are booking out months in advance, raise the price.
Weeknights
In popular holiday destinations where guests are more likely to spend a week or longer you may be best advised to set weekday pricing the same as your weekend pricing. If demand is high enough for week-long stays you could specify a minimum 7-night stay.
The advantage of this is that you can reduce your overall costs as opposed to shorter stays, as you are using cleaning services less often.
Weekly Rates
Weekly rates are often slightly discounted to encourage guests to book longer stays (thereby reducing cleaning costs if you have an all-inclusive rate). As a ballpark, a 5–10% discount is not uncommon for guests staying for a week or longer. If you have periods of the year that are heavily in demand you should not provide any discount at all.
Seasonal Pricing
The majority of properties will set pricing based on different seasons including peak seasons and off seasons. This doesn’t necessarily mean that you will need to set different prices for all four seasons, but it’s likely that demand will vary at least between summer and winter. Think carefully about how seasonality may affect demand for your property.
For example:
Beach houses will experience high demand in summer so pricing for homes in Jervis Bay, Coogee, Bondi or even Thirroul will be higher from November to February vs similar homes in Kangaroo Valley or Berry.
Similarly homes that have a view of the Sydney Harbour for New Years Eve will have much higher rates for those few days vs a beachfront property down the coast.
Don’t forget that for some travellers visiting Australia they are escaping their ‘season’ so people will travel around the world to get away from the cold or to visit warm areas.
Holiday Periods
Holiday periods (such as school holidays and public holidays) can be a boon for holiday rental properties. Prior to setting up your pricing you should identify all the public holidays and other significant school holidays in your area and vary your pricing accordingly.
Public holidays falling on a Monday or Friday are typically in demand as they allow guests to have a long weekend without taking time off work. You should also look to set minimum 3-night stays for long weekends.
For example, for a public holiday falling on a Monday, set a minimum 3-night stay for Friday, Saturday and Sunday, all at a higher rate. This prevents underselling the weekend by only recouping a 2-night sale.
Special Events
Be sure to research special events like music festivals or sporting events in your area by speaking to locals (in person or on local Facebook groups), tourist information centres and other businesses in the area. These can cause large spikes of visitor numbers and you can raise your prices significantly due to high demand.
Last Minute Discounts
Last minute discounts can be a good way to fill up spare capacity that is unlikely to sell. Many holiday rental owners fail to offer these discounts and miss a significant opportunity.
Some booking websites allow guests to filter by discount or special deal and prominently display the discounts, thereby attracting further attention.
Discounts can typically be set as a percentage rate for a specified period in advance. A 20% discount for bookings within the next seven days is a substantial enough discount (for a property accessible within three hours of a capital city) that will help to fill up spare capacity.
Can a property manager help to determine holiday rental pricing?
When it comes to dynamically pricing your holiday rental, it’s important to speak to the experts that know the area your holiday property is located in. Our Airbnb property management team at Professional Holiday Homes can help you to price your holiday rental property effectively so that you can maximise your revenue. We use a combination of our previous experience as well as the latest data available from various data services
