When (and When Not) to Lower Your Prices
It may sound counter-intuitive, but having a fully booked-out calendar on Airbnb is not always a good thing. Guests are more likely to place bookings closer to the current date.
If your Airbnb is getting consistently booked out months in advance, it generally means that guests see your place as a bargain in comparison to other comparable alternatives they may also be looking at.
It means that all things being equal, your place stood out because it was cheaper than the alternatives.
Whilst you’ve gained the security of a fully-booked calendar, under-charging can often represent an equal, if not bigger, missed opportunity than over-charging. Take the following example:
As a general strategy, start off by locking in your target prices (i.e. the prices you believe you should ideally be charging for your place).
You shouldn’t need to consider reducing your prices until at least one month before the current date. As you get closer to the current date, gradually begin to reduce your prices every few days as the current date approaches.
Save significant price reductions for last-minute holes in your calendar that will almost certainly remain unfilled because of other bookings that sandwich it.
As a rule of thumb, you can look to reduce your nightly rate by 10% each day in the final week leading up to a vacant block on your calendar. The proviso to this is knowing your ‘red line’ – the amount at which it becomes unprofitable and/or not worth your time or effort to get booked below that price.
Ensure also that any short-term bookings you do accept are not likely to compromise your ability to accept a longer, more lucrative booking.
All of this inevitably requires operating according to a framework of assumptions and educated guesses. Things won’t always work out in your favor. Nonetheless, lowering your prices to fill holes in your calendar, and being strategic with the bookings you decide to accept will ultimately pay off in the long run.