Pricing is your most powerful revenue lever. The difference between good and great pricing can mean 20-40% more annual revenue from the same property. This guide covers both automated and manual approaches to maximize your returns.
Pricing Fundamentals
Dynamic pricing adjusts your nightly rate based on supply and demand factors:
- Demand factors: Holidays, local events, seasonality, day of week
- Supply factors: Competitor availability, new listings, market saturation
- Lead time: Bookings further out can command higher rates
- Length of stay: Longer stays often justify discounts
20-40%
Revenue increase with dynamic pricing
3-5x
Peak vs. low season rate difference
30-50%
Weekend premium
Dynamic Pricing Tools
| Tool | Cost | Best For |
|---|---|---|
| PriceLabs | $20-30/listing/mo | Data-driven hosts, customization |
| Wheelhouse | $20/listing/mo or 1% | Beginners, simple setup |
| Beyond Pricing | 1% of revenue | Hands-off approach |
| Airbnb Smart Pricing | Free | Testing only (often underprices) |
Pro Tip
Start with a pricing tool's default settings, then customize over 2-3 months as you understand your market's patterns. Don't over-tweak initially.
Manual Pricing Techniques
- Event-based premiums: Research local events (concerts, festivals, sports) and raise rates 50-100%+
- Last-minute discounts: Reduce rates 10-20% for bookings within 7 days to fill gaps
- Length-of-stay discounts: 10-15% for weekly, 20-30% for monthly stays
- Orphan night strategy: Discount single nights between bookings to fill gaps
- Early bird incentive: Slight discount for bookings 60+ days out
Setting Your Base Price
- Calculate your floor: All expenses + desired profit = minimum rate
- Research competitors: Find 10+ similar listings and track their rates
- Position strategically: New listings = 10-15% below market to build reviews
- Adjust seasonally: Set different base prices for high/shoulder/low seasons
Warning
Avoid Airbnb's Smart Pricing as your only tool - it often underprices to maximize bookings for the platform, not your revenue.
Advanced Tactics
- Gap night optimization: Lower minimum stay or price for 1-2 night gaps between bookings
- Multi-channel consistency: Keep prices similar across Airbnb, VRBO, and direct to avoid guest frustration
- A/B testing: Try different rates for the same dates to optimize conversion
- Review your competition weekly: Markets shift constantly
Pricing Optimization Checklist
- Set up a pricing tool (PriceLabs or Wheelhouse)
- Configure seasonal base prices
- Add local events to your calendar
- Set length-of-stay discounts
- Review and adjust weekly