4 Dynamic Pricing Tools Airbnb Hosts Should Use to Rake in More Cash
By Properly / Aug 27, 2015
The ‘Big Bang’ of home-sharing in 2008 (the year Airbnb launched) created a cozy environment for complimentary services to sprout and prosper. Property management companies, key exchanges, and on-demand cleaning services paved the way for non professional hosts to run their home-shares like a business.
The only element lacking was dynamic pricing for profit. Hotels and airlines have used this technology for decades and now anyone has access to it.
Dynamic pricing is the method of changing a nightly rental price based on factors that include but are not limited to: local hotel occupancy, seasonality, supply and demand shifts, and nearby events that affect travel volume .
Interestingly dynamic pricing tools can achieve more than one objective: maximize yield or maximize profit. With dynamic competitive pricing , a host can book more rooms by changing the nightly rate relative to how far in advance it stays unbooked.
Or hosts, like those who live in San Francisco and have a limit of 90 days a year to rent out vacation homes, can generate the highest possible revenue within a set timeframe using this precious data.
The companies below use different variables to analyze and update prices, but all of them report 10–40% increased profit margin for their users.
In fact, Airbnb itself integrated a dynamic pricing tips tool into its platform this June. The home-sharing giant should have the best data of all the services, since it has visibility and control of both supply and demand, but it only provides suggestions so hosts will still need to manually update their prices.
Price Method is compatible with three home sharing sites, Airbnb, VRBO, and Homeaway — which is perfect for people listing short and longterm rentals on different platforms.
Hosts view a customized calendar with popups that explain the factors (crunched by data scientists) that go into a listing’s suggested price. According to Price Method:
“Every day, we collect hundreds of millions of data points on peer-to-peer rentals, hotels, airlines, local events, and more. Our team of PhD data scientists uses this data, as well as details about your unique listing, to price each night of your calendar perfectly.”
Price Method operates in more than 60 cities around the USA (I tested it out with success on a listing in the Florida Keys which is an area not mentioned on the instant demo feature), and just added London with more cities in Europe to come soon.
The automatic pricing service is completely free. The pricing feature itself always will be free, co-founder Andrew Kitchell told us, but the company will eventually charge a ‘low monthly fee to users who want to fully automate their pricing.’
Everbooked was the first pricing tool on the scene exclusively for Airbnb units. And membership has increased tenfold in the past few months co-founder, Doug Ross, said in an interview.
In addition to the nightly pricing tool, Everbooked unveiled a new comps tool for users. Ross said,
“The comps tool identifies and ranks properties relative to a reference Airbnb listing based on similarity. It shows historical average prices, future booking rates, and organizes all of it in a handy display with links to all these listings.”
Everybooked’s comps tool adds a unique edge to the pricing algorithm:
“Not only does Everbooked look at the factors that [competitors] do, but we also look directly at who is booked around you and how much their property is like yours and weight it accordingly. If 80% of the closest comps around you are booked, your price should go up.”
Right now Everbooked offers a 1-month free trial, after which a user pays 1% of total gross earnings.
Beyond Pricing’s regional scope is by far the widest. It calculates dynamic pricing for Airbnb listings in select cities across the USA, Canada, Europe, Asia, Australia, and the Middle East. Since three out of four of Airbnb’s largest markets are cities outside of the USA, this tool makes it possible for international hosts to price competitively and have it automated.
Once your account is linked up, the calendar shows a Health Score for each day along with a detailed pricing breakdown for seasonality, day of the week, and events. This service also offers a 1-month free trial and a 1% charge of your booking earnings afterward.
There’s a competitive pricing tool for everyone to get the most money out of their unit. Choosing the right one is just a mater of connecting the dots. So which one is best for you?
Airbnb’s Price Tips: Great for hosts with listings outside the USA and/or don’t mind putting in extra effort.
+ Unique and deep data.
– Must check for daily updates and change prices manually.
Price Method: Great for hosts with listings on different platforms.
+ Compatible with: Airbnb, VRBO, Homeaway.
+ 2 Ph. D’s on the team.
Everbooked: Great for USA Airbnb hosts who are looking for a competitive edge.
+ Comps tool shows neighbors’ prices & occupancy.
+ FREE for 1-month, 1% charge of bookings after.
Beyond Pricing: Great for hosts who list inside or outside the USA.
+ Available in 40+ international cities.
+ FREE for 1-month, 1% charge of bookings after.
Hosts, Superhosts, and future hosts: What pricing tools are you using (or will use)?
* Background photo credit : Tuğba Yüksel via Unsplash