Why your prices are not working

As a manager of bnbs, I spend a lot of time looking at rental prices. Once you have a great place for your guests to rent, your prices are one of the main variables that decide whether or not it stays booked. Pricing is much like fishing, and there a several questions you need to know the answer to before you put a line in the water. Who is my ideal guest? What is important to them? How is a weekend guest different from a weekday guest? What's my price floor? This last question is very important because there's a point at which you begin attracting guests who may end up costing you more than it's worth to book them.

Once you know the answer to these questions, it is important to understand that the most successful vacation rentals don't "set it and forget it" with regard to prices. There's always work to be done. One of the biggest mistakes I see owners make is setting a flat price for their rental.

I suggest an inverse bell curve model as the most successful pricing model. Weekends will always be your premium price. Thursday and Sunday nights should be your second tier and then Monday through Wednesday should be your lowest price available. The larger your space, the more variance you should have between these price points. During the week you aren't generally going to be attracting large groups of guests. The weekdays are generally going to be business travelers and couples. Where are they looking to stay? Generally a one or two bedroom place, but if you have a larger space, you'll want to compete with those one and two bedroom prices!  

In structuring your prices over time, charge a premium for booking far in advance. Being booked 4 months out is not necessarily a sign that you're doing things right, but more often a sign that your prices are too low. You want to be booked for the month ahead and 50-70% booked 2 months out. Set your highest price for the farthest date out on your calendar and your lowest price for the date closest to the present. You'd also be amazed at the bookings you'll get if you keep adjusting prices as unbooked dates approach. Don't tell yourself "it's just not very busy this month." Work at it. Lastly, make slight adjustments. Decreasing your price by even $20 can sometimes be the trick.  

 

Why guests are picking the other place over yours

I sit down with homeowners and investors all the time to give consulting advice as they are preparing to rent their homes on vacation rental sites like Airbnb and VRBO. Whether the owner is a bare minimum kind of person or a design junkie, many people are missing a key component that will help their listing stand out among the competition: a unique feature. Your potential guests want more than a good deal on a place to stay, they want to have an experience they can't have anywhere else. They want to have their eyes opened to other people's sense of style and personality. What feature or features are you offering your guests?  

At one home I manage the decorator and homeowner decided to purchase an inexpensive shuffleboard table to put in the open kitchen layout. It's in our main photo and a lot of our guests book because of the table! Maybe you want to give guests the ultimate outdoor fire pit experience. How can you make something as primal as sittings around a fire feel special? I recently heard about a vacation rental owner who refurbishes old arcade games for a living, so his Airbnb includes a full-on arcade! The key is not to spend a lot of money, but to make sure you have some aspect of your rental that separates it from the competition.

Your guests are choosing your home over a hotel for more than just money. They want a unique experience. Be yourself.