Over the past 5 years on my Airbnb journey, I've learnt a lot of lessons...
Some more painful than others...
But none as costly as the ones I'm about to share with you today...
I'm writing this article in attempt to save you from making the same mistakes (and paying dearly for them!)
This is the article I WISH I would have read 5 years ago.
You may be new to Airbnb, or even operating for longer than me...
But I can assure you, at least one of these mistakes will relate to 99% of hosts.
And as minuscule as some may seem, it all adds up (trust me!)
Mistake #1:
Losing Potential Earnings Every Weekend
Ah yes, the mistake that cost me ~$5,200 every SINGLE year until I finally figured it out...
Every month, I get to look under the hood of dozens of Airbnb listings...
And if there's one common trend I see all the time, it's hosts underpricing their weekend rates.
Are you getting booked every Friday and Saturday night?
Then the reality is, you're simply not charging enough!
Let's say you charge $350 Friday and Saturday night and you're booked out every weekend...
How do you know how much you COULD be charging?
Maybe your Friday and Saturday nights are worth up to $400 a night!
But how do you know this if you don't try?
The goal here is to start increasing your prices in increments...
Try upping your weekend rates by $10, to $360.
Still getting booked?
Increase them to $370...
Rinse and repeat this process until you find your "Pricing Ceiling".
You'll know when you hit it when the bookings start to slow down.
When that happens, simply drop the rate back to your previous increment.
If you manage to increase your pricing from $350 to $400 on the weekends...
And still get booked out...
Congratulations, you just made an additional $5,200 over the next 12 months!
Mistake #2:
Your Weekdays Aren't Getting Booked During Low-Season
Think losing $5,200 was bad? How about flushing $10,000 down the drain over a year?
Every night you're not getting booked is costing you money...
"I'm booked out every weekend, but get dismal bookings on weekdays during low-season."
Can you relate to this?
That phrase is the most common comment I hear from new clients...
And I don't blame them! I was in the exact same boat when I got started.
In fact, I always justified it by saying how "people aren't on holidays, so why would anyone book the weekdays anyway."
Oh how wrong I was!
These days, we consistently get booked 80% to 100% of the time, even during low-season.
How?
Well, there's a few factors that come into play...
But the major part of it is accurate pricing...
Are you charging the same rate for both your weekends and weekdays?
Or maybe just marginally less during Sunday to Thursday?
Let's continue using our previous example, where we're now charging $400 on Friday and Saturday night...
Now lets say you charge $300 during the weekdays...
But you're only getting booked 2/5 nights on average.
What if you could drop the remaining 3 nights to $192 and get booked?
Would you do it?
Let's say just ONE of those nights got booked every week...
That's an additional $10,000 in earnings over the space of a year...
I know my answer.
Mistake #4:
Using Airbnb's "Smart-Pricing"
Unlike my previous mistakes...
This mistake only lasted 12 hours...
And as with all my previous mistakes, this one still cost me 4-figures.
Only the sting was short and sweet.
How could such a simple change cost me so much so quickly?
Well, to put it simply...
Nights that I usually charged out at $1,000, instantly got dropped to around $300. That's right, Airbnb thought it was a good idea to drop my Christmas rates a whopping 70%!!
Now, you might be thinking to yourself... "Come on Jordan, you should have set your minimum rates, that's what I do."
And you'd be right, that would have saved me from the ninja bargain hunter that booked within the first hour of us changing the prices.
BUT, here's the thing...
Even if you set your minimums...
Airbnb is still going to drop your rates to provide competitive prices to their customers (guests).
So instead of optimizing your pricing for maximum returns, it'll simply just be hitting your minimums, instead of achieving your MAXIMUM rate.
How do you know what your maximum rate is?
Well, part of it is trial and error, like I stated above...
The second part is understanding the 4 key pricing factors;
Seasonality
Special Events
Historic Trends
Supply And Demand
So in a nutshell...
Don't use Airbnb's Smart-Pricing!
There are plenty of other tools out there that will help you achieve the best possible rates.
An example would be;
PriceLabs
AirDNA
Wheelhouse
BeyondPricing
A word of warning though...
Don't expect any of these tools to be a "plug-and-play" approach.
That would be like buying a screwdriver and expecting it to fix your car (I actually know nothing about cars so I hope that's accurate!)
Mistake #5
Thinking I Know What Rates Are Best
This may sound counter-intuitive coming from a guy who's been telling you how to price your property...
But "how" and "what" are two very different things...
"How" to price your property comes down to a proven strategy that I've been working on for over 5 years and refining over COVID...
"What" to price your property at is another story...
As it's easy to get emotionally attached to our properties, it's hard to separate our emotions from the logic.
And the logic is this...
No one knows "What" your property should be charging...
Except for...
THE MARKET!
The 4 key pricing factors (mentioned above):
Seasonality
Special Events
Historic Trends
Supply And Demand
These are the only way to 100% guarantee you're charging the correct amount each night.
Every single night should be priced differently based on these 4 key factors.
AND as the market fluctuates so rapidly every day...
These prices should be updated every 24 hours to reflect these changes in the market.
And no, you don't have to do this all manually, going through 365 days and pricing each and every single date.
Then go through it every day and update them.
(Unless you want to go insane!)
No, there's a much simpler way...
But don't be fooled, there's no "quick-fix" here. This process will take 90 days of trial and error to get it right.
But once you do, your pricing will nearly be on auto-pilot.
Each day will be priced perfectly to achieve the best rate possible whilst skyrocketing your occupancy simultaneously.
If you're looking to learn more about how to maximize your Airbnb's earnings, click the link below to join me for my next free training event, where I'll go into detail on how we've helped hosts increase their earnings by up to 112%:
Best regards, Jordan Hrovat
Co-Founder - BeyondBNB.io