As an Airbnb host, you want to know how to increase your Airbnb income. You have two options… increase your listing price or increase your Airbnb occupancy rate. Or better yet, do both at the same time.
Here I discuss how to achieve maximum occupancy so that your property is never empty and you earn a higher income during the year.
How to Increase Your Airbnb Income
First, let’s look at some benchmark data. This will give you a feel for how well your listing is doing compared to similar listings in your area.
Travel demand varies greatly around the world. Some ski destinations and beach getaways have just a few months to realize their rental’s annual profitability. Other locations, with milder climates and a consistent mix of leisure and business travelers, have the entire year to maximize their revenue. For regions that have consistent demand throughout the year, the following chart provides a proven framework for future occupancy rates that optimize profitability.
|Days until Reservation||Occupancy Rate|
Tip: If you have more than 25% of your nights booked 3 months in the future, you need to increase your price!
If you have this ‘good problem’ of being booked far in advance, here’s what you want to do. First increase your prices dramatically. Then incrementally reduce the price each week as your available dates arise. Over time, you’ll get a feel for the demand at each price point.
It can be stressful waiting until the last 30 days to fill over 50% of your dates. But you need to be patient. Airbnb consumer research reports have shown that most Airbnb guests book within 30 days of their travel dates, and smaller units book with even less lead time.
If you have vacancies that are less than a week out, then drop your prices to a bargain rate. If I have open dates 7-10 days in the future, I typically drop my price 5% each day until my property is booked.
Trick: Airbnb takes note of every price reduction you make and improves your listing’s visibility in response. Reducing your listing price by just $5 can have a significant impact on your listing’s ranking in the Airbnb search results.
The goal is to never have a vacant property. Airbnb does not publish the daily rate of your previous bookings so you don’t need to worry about price erosion. Much like an airline, I’ll have one guest paying $99 a night and the next paying $269 per night. All the dates that are booked at full value for the month should far outweigh the losses incurred from cutting your prices a few times each month. Actively managing your pricing helps you get a sense of what your property is worth during each day, season, and special event.
What If There Are No Competing Properties?
If there are few Airbnb properties in your area, you have the opportunity to be the trailblazer. Instead of researching demand using Google Trends or other tools, simply put up a listing and see what happens.
Airbnb shows you how many listing views you have each day. You can find this information in the “Stats” section of your Airbnb account. Check out your listing stats after a couple of days. If you’re seeing at least a couple listing views each day, then you’re in business.
Weekend vs. Weekday Pricing
Airbnb allows you to specify a weekend rate. This is a special price that replaces your base price for every Friday and Saturday. You may or may not want to take advantage of this pricing option.
The question is does your area attract more tourist or more business travel?
If your property is located in a popular vacation spot that attracts weekend visitors, then you want to set a higher weekend rate.
If you don’t know, don’t worry. Your local hotels have spent millions trying to figure this out, use their research to your benefit. You can use Hotels.com to search for a full week’s stay at least a month in the future (making sure to avoid any holidays).
Look at a few different hotels in your area and replicate their pricing strategy. For example, if a nearby hotel has the highest demand on Saturday nights, then you want to increase your weekend pricing.
An additional benefit of higher weekend rates is longer stays. If you lower your weekday rate and increase your weekend rate, you’ll book slightly longer stays on average.
Ready To Maximize Your Airbnb Occupancy Rate?
In this article I gave you all the information you need to increase your bookings and start earning a higher Airbnb income. If you need more help or would like to see exactly how your listing is performing, then go to Airdna to check out the occupancy rates in your city.