If you never change the price of your Airbnb, your price strategy SUCKS!
Offering your apartment, house or another type of accommodation on Airbnb is one of the best things that you can do to make some money from your unused space. However, in order to get the most from this great online marketplace and hospitality service, you must follow the trends and learn a few things about management. One of the things that have proven to be very helpful to Airbnb hosts is yield management or in other words: changing your prices.
Yield management defined
To put it in simple words, yield management, or revenue management as some people call it, is a type of management that tries to understand, predict and anticipate consumer behavior. In addition, yield management helps you react to this behavior in the best way, by allowing you to increase revenue.
Why should Airbnb hosts take yield management into consideration?
Every Airbnb host is selling a limited quantity of goods. In this case, we are talking about apartment leasing. Obviously, you have a limited number of rooms or apartments to rent. Thanks to proper yield management, you will be able to create an offer that is price competitive and attractive and focused on the right group of travelers. Yield management is all about supply and demand and as we all know there are times and situations when these two indicators are changing. If you keep the price and conditions the same all the time, you will definitely lose some money over time.
According to the statistics, only 15% of Airbnb hosts are managing their prices. The rest of them are not putting themselves in the position of hotel managers although they are trying to make a profit. This is obviously a wrong approach.
Only 15% of Airbnb hosts are managing their prices
If you are not implementing yield management strategies in your Airbnb venture, you will lower your chances of getting more bookings, providing attractive rates, getting more profit per booking and preparing for different seasons.
The good news is that there is more than one effective yield management strategy for Airbnb hosts. For instance, the rate strategies are part of yield management. If you have more than one room, apartment or another kind of accommodation on Airbnb, you should define the price based on the room type, some guests, and bedding type.
Furthermore, it is obvious that you should think about the season when setting rates on Airbnb. For example, it is a smart move to offer discounts during low season. But, you don’t have to wait for different seasons of the year to change the price. Many Airbnb hosts are providing lower rates for people planning on staying for a few weeks vs. those planning on staying for a couple of days.
In order to optimize the effects of yield management, it is better to check the historical data. In this way, you will determine the low and high season and many other details that can help you make the right decisions. The right yield management strategies will help you set the right price for your offer and ultimately improve your results as an Airbnb host.
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