How do you set rates for AirBnB and others to get reviews and a boost in rank?


I am not sure how you set rates but here’s an idea I want to discuss with you. Before I do let me refer you my other post on “How to improve Airbnb ranking: Is this what you’ll do?” Here you’ll see that, for example, the more reviews you get the higher your listing appears on sites like AirBnB.


Today I just want to look at setting rates (see also Setting Self Catering Rates: Margins Or Searching For A Mirage?) at such a level that you may get ranked at the top for your area. Note: I am using rates as an example and your home can be different and your objections may be different. The idea I want to discuss here is where you want to maximize your income from you self catering accommodation.
Remember we said that competitive rates and short stays increase the likelihood that your place gets booked and short stays increase the number of people staying at your accommodation. Although short stays increase costs, we are willing to invest the cost as part of our boosting exercise – rising to the top on AirBnB – because we get many more reviews etc. Later when we have hit the top can we increase the minimum stay.One of the most effective homeowners I know markets two homes in Scarborough, one in Constantia and one in Heidelberg. His homes in Scarborough are “on the beach”. The one, with a pool, can sleep 10 in 4 bedrooms and the other one 9 in three bedrooms. His rates in winter and low summer are about R260 per person per night or R2600 for the ten sleeper. In high peak his rates are R440 per person. And the real cherry; he does one nights. All the time. I am not saying you should, but consider while you want to boost your rank and get more reviews on AirBnB.


How do you establish your rate?

This is what I propose:

 

  • Use R250 per person per night as a target and times it by the number of people your home can sleep. 6 x R250 equals R1500 per night.
  • Have a look at what other people are renting similar homes on AirBnB and try and get a few rand under them.
  • Depending on your costs you can increase or decrease but remember we are investing money to get reviews and are not focusing on making money yet. This will happen when we have twenty or more reviews. Hopefully sooner.
  • If you want to optimise your income never overlook the loft room where you can add two kids.
  • Let’s say you get 10 one day bookings during the slow season at R1500 per night. Your cost to change over is R500. Then you get R10 000 in for the month before advertising and commission. This is not a bad price to pay to get a high rank.
  • If you are willing to take this even further then set your rates at R1100 for 4 people and R250 per extra person. This lowers your rate even further when compared to competitive listings and increases your chances of getting a booking – more reviews etc.
  • Do you have a popular track record already? Consider keeping the same rate through the year except for high peak – 15 December to 15 January. During peak you can double your rate or even triple it and never sell less than 12 nights. But until you have a very popular track record I suggest you just double your rate. Question: Do you prefer one deal for 14 nights at R4000 per night (R56000) or rather two deals at 25 nights at R3000 per night (R75 000). My gut tells me you will get better mileage from a lower rate – increased occupation and more reviews.

Summary:

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When you start out on AirBnB set the shortest possible minimum stay. Investigate your rates and set them at less than the competitor. During high peak set longer minimum stays but keep the rate at double your winter rate. When you start getting bookings of more than 50%, 75% and 80% during winter, summer and high peak then you have the license to increase prices.   

Where will CapeHolidays.Info Market your home?


September 10, 2014

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