Price management: Airbnb hosts vs Hotels
Airbnb is an international phenomenon. This online marketplace and hospitality service keeps breaking its own records every year. The latest statistics have shown that there are over four million Airbnb listings worldwide. (1) The way this platform works has revolutionized the method that travelers from all over the world have used to find accommodation. Instead of using a hotel, many of them are now looking for Airbnb hosts.
Those interested to become an Airbnb host and those who just want to optimize their results on this platform should always look for the latest articles related to Airbnb success. Many things affect the success, but the pricing is definitely one of the most critical factors. It turns out that even though Airbnb hosts act similarly as hotels, the way they set and manage prices is much different compared to the methods used by hotels.
How do Airbnb hosts set the price (vs. hotels)?
For starters, they are checking the competition. As a popular hospitality platform, it is very likely that there is a similar type of accommodation that is already offered there. Future Airbnb hosts are checking the competition to set a reasonable price. It’s the location and the appearance/functionality of the space that determines the price.
Logically, if the place comes with specific add-ons and perks, the price is usually higher. In addition, most Airbnb hosts are taking their popularity into consideration. New users typically offer lower rates, and once they build some reputation, they increase the price.
Hotels, on the other hand, work in a different way. They are primarily focused on the uniqueness of their property. A hotel with a character can offer higher prices. There is another different thing about setting prices as a hotel owner – you can vary the pricing for each room. Airbnb hosts usually have one house, apartment or room to offer.
In order to stay up-to-date with the latest news about Airbnb and to get great ideas to improve their Airbnb business, more and more hosts are using specialized websites and Apps like Vayoo. In case you didn’t know, Vayoo is a software company focused on creating apps that help property managers and vacation rental owners.
How do Airbnb hosts manage prices compared to hotels?
The latest statistics have shown that just 15% of Airbnb hosts worldwide manage their prices as hotels do. This is a huge mistake because if they follow the steps of successful hotels, they can get an additional profit and make sure that their properties are in demand.
Many Airbnb hosts make the same mistake – once they set a price, they keep the same price all the time. This might be the simplest solution, but not the best one. Those who want to witness great success on Airbnb should follow the strategy of the most popular hotels.
The first thing that they do is to take the seasonality into account. (2) There are certain high and lows and this is the right time to change the price. Obviously, properties close to the sea will be in demand during the summer period which is why the price should be higher.
Next, Airbnb hosts must understand that most travelers are using this option for a few days. They are not renting places for a long period of time. So, the day of the week when they want to rent the place can also affect the price. Typically, the weekends are used for setting higher prices.
In the end, there might be some special events close to the rented property, and this is another reason why Airbnb hosts are increasing prices.
In any case, Airbnb hosts can learn a lot from hotels and their price management strategy. After all, getting involved in an activity like this is similar to hotel management on a micro level.