3 Actionable Tips To Make Your Airbnb Business Thrive
What you will learn:
- How to optimize your Airbnb market price and occupancy so that you can maximize your profits
- How to Get the most out of your rental property by leveraging more platforms
- Learn how to increase your booking rate and beat the competition
Have you ever noticed that similar properties in your area can be booked at much higher rates than yours? Or that Airbnb Smart-Pricing tends to set the price on your property too low, requiring you to sacrifice profits in order to get more bookings and become the listing that everyone wants.
A property manager could charge 30 to 50% of your revenue, and this expensive option may be not suitable for you. But there are effective strategies that you can do yourself.
Occupancy - Finding the right balance for maximum profits
Why occupancy doesn't matter...
Despite popular belief, the occupancy rate is not necessarily the most important factor to increase your earnings as an Airbnb host.
For example, if you have a property that has a 100 percent occupancy rate and an average daily rate of $120, it will generate $43,800 in revenue ($120 x 100 percent x 365). If you raise the price to $250 but keep the occupancy rate at 60 percent, your revenue increases to $54,750 ($250 x 60 percent x 365). Raising the price while keeping a good occupancy will allow you to reduce costs because there will be fewer expenses related to maintenance and cleaning.
How to maximize Airbnb earnings by finding the right balance
The short answer is, that you need to test to find the right strategy. Here is how to maximize your Airbnb profits...
The key to successful price optimization is monitoring the “Value Rating by Listing Price” and adjusting your price accordingly. This will take you about 3 months to find out.
If your property is booked out every weekend, why not raise the price until it stops getting booked? Then, you can bring the price back down to the point where it’s still booked 100%.
If you are not getting bookings during weekdays, slowly drop the price to increase occupancy. Then, once the weekdays are booked, slowly start increasing the prices to optimize the balance between the price and occupancy.
While you are increasing the price, keep monitoring “Value Rating by Listing Price”. When the Value Rating starts to go down, it is a sign that people are not totally happy with the price compared to similar properties. Your price is reaching the ceiling and it is time to stop raising the price.
Understanding Supply & demand to earn more money with your AirbnbPricing strategy is one of the most important parts of running an Airbnb business. You should constantly adjust to the current supply & demand so you can optimize profit.
Events and seasons
There are best seasons for every location to visit. There are special events in your local area. Create a list of all including school holidays, Christmas, etc. You should charge entirely different rates for those than low seasons. If you have been operating for more than a couple of years, look back at the historical trends to adjust the rates too.
Another way to increase revenue is by lowering some nights from your calendar during low season or when there are no guests coming in – this will help lower competition on those dates and means more revenue per booking!
Remember, $120 x 52 days (1 extra day a week) = $6240
How to set the price
So, how can you find the best price for your property? It doesn’t matter how much you think your property is worth, the market decides the price. Here's a quick guide...
When your occupancy is low and the date is near, drop the price to fill up those. When your occupancy is higher, increase the price far in advance to achieve a greater rate.
For example, you look at the bookings in March and it is the beginning of February. Your property is already booked for 24 nights (80% occupancy). You should increase the rates by 10% instead of discounting to fill up the remaining nights.
On the other hand, if you are booked only 2 nights next week, drop the price by as much as 35% to fill up.
Get more exposure for your Airbnb listing
Understanding the numbers
If your property is listed only on Airbnb, you are missing out. Take a look at some numbers...
According to similarweb.com, it is clear that Booking.com has 6 times more visitors and they visit fewer pages before making a decision. This means you get more visitors on your listing and less competition. Which site do you think you have the best chance to get bookings?
Listing your property on multiple channels
You might have heard about some bad experiences with Booking.com, didn't get paid by guests, there being no support, a high number of cancellations, etc. These troubles are because Expedia leaves the entire transaction to the host. This means you need to decide when and how to take payments, release security deposits, and other policies. Just some extra initial setup, but you have more control over your business.
Expedia owns more than 200 booking channels and its number of visitors is similar to Airbnb if it's not more. Expedia is easy to operate and provides some flexibility to your listing operation. Once you register with Expedia group, your listing will be on all eligible 200+ booking channels such as HomeAway, Stayz, and Hotels.com.
How to manage calendars
There are tools to synchronize your calendar booking to ensure there is no double booking. Some tools come with additional features so you can manage payments, security deposits, and more. Do research on “Channel Management Software” to find a suitable one for your needs.
Convert - Tips for Airbnb hosts
How to win more guests
Now, you found the best pricing strategy and optimized listing exposure. You need to convince people to book your property over competitors. To do this, you want people not only to look at your listing but to book it.
The first step is to get on the first page of the search results. Same as Google, booking channels have their search engine.
How to optimize your Airbnb listing
To get people to click on your listing, you should make your main photo, heading, average guest rating, and price appealing. Think about what type of people like the location and your property. Why are they visiting the place? For example, if people are coming for a beach holiday, you may want to use an ocean view through a window in a living room and infuse the beach holiday in your heading.
Photos are the most important part of your listing. Invest a little effort to get a right color, mood, and lighting that appeal to your guests.
PDF version has more in-depth detail with tables, a To Do list, and more!