There is no one-size-fits-all answer when it comes to pricing strategies on Airbnb, Booking.com and other OTAs. However, there are a few things that all hosts should keep in mind to get the most out of their properties throughout the year. In this blog post, we will take a look at some of the most important things to consider when setting your prices for high and low seasons!
How to set prices for your Airbnb or Booking.com?
Here are the most important things to consider when building your rental property pricing strategy. In short, these are the key take-aways from the official Airbnb and Booking.com pricing recommendations:
- Kick off from your target market when adjusting your base price. Are you trying to attract budget-minded travellers during the low season? Or are you hunting for luxury travellers during the high season? This is listing-specific.
- Supply and demand. Define the high and low seasons in your area. Build your pricing strategy for a year ahead and remember that travellers book properties 3-12 months in advance. If there are a lot of properties available in your area during the low season, you are bound to be more flexible with your prices. However, if there are few properties available, you may want to charge more to profit on the low supply or limit new guest bookings when the supply is surging.
- Location is a huge factor when deciding on your seasonal pricing. A ski town may see a higher demand for rentals during the winter months, while a beach town may see a higher demand during the summer months. Your definition of the season is unique to your location. The location also is listing-specific. Not every listing is the same, try to group your listings with varying pricing strategies.
- Adopt the formula [Basic rate] + [Seasonal rate] + [Custom rate] for your listings (read more on it below).
- Be transparent. The nightly rate is not what guests will end up paying. The total price will include the guest service fee, cleaning fee, extra guest fee, and country taxes specific to your area.
- Master the promotions. Learn how and when to use mobile discounts, country rates, special deals and OTA-platform-specific types of discounts.
What are the most effective vacation rental pricing strategies?
There are a variety of pricing strategies that can be used in the short-term rental industry, but the most common ones are:
- value-based pricing – prices based on how much the customer perceives your STR to be worth
- competition-based – prices based on what the competitors are charging
- cost-plus – when a business adds a percentage onto their costs to make a profit
- dynamic pricing – based on the demand
There are paid tools like Pricelabs and Beyond that can offer full automation for listing prices. Alternatively, you could try to benefit from custom programs like Airbnb Smart Pricing or Booking.com’s Genius partner program (which is not a pricing tool, but rather a marketing tool).
However, it is beneficial to be aware of the game rules before playing. We wrote this guide to help you understand how to price short term rentals listings in general.
How do you adjust booking prices in vacation rentals?
Here’s a video of Benjamin, a customer success manager at Your.Rentals, revealing the main methods of price setting in STR.
Setting up a vacation rentals pricing strategy [Example]
Let’s start our analysis with a top-level overview of the booking season. We will break down price rules into three categories:
- basic rates
- seasonal rates
- custom rates.
Take a common repetitive yearly trend of vacation rental bookings. But remember, your analysis should be niche and location-specific.
Here is the Your.Rentals data on the average number of monthly bookings in Europe in 2020-2022. Although 2020 was largely impacted by the pandemic, the trend was the same.
The average number of bookings in Europe in 2020-2022 taken from Your.Rentals statistics. This chart helps you establish an appropriate listing price for each period of the year.
Then we need to mark for ourselves the priority periods when we can alter basic prices.
Let’s figure out how we can align all types of discounts and market them through all of our vacation rental channels at the same time.
Basic rates for vacation rentals
This is your baseline, a pricing foundation (as referred by Booking.com). That is the price you set for the whole year or more specifically for your lower season.
Short term rentals basic rates
In our App in the Basic night field you have to define your Basic rate. If you have a different weekend rate, you can set it in the Weekend night field.
The text In blue colour shows what price will be displayed on the different channels to guests including all the commission added to it.
Setting up Basic rates in the Your.Rentals interface
Then you can enter some specific rules: for example, that the place can welcome up to eight people. You might want to decide to charge an extra for additional guests. So it costs a certain price for two people and with more guests coming the price will rise per guest.
Discounts may also be applied to your Basic rate (whether it be your personal discounts or discounts coming from OTAs).
So from our experience, Your.Rentals recommends that you make your base rate maybe a 10% higher so that you are ready to absorb a discount if you have one in your setup.
You can set the minimum stay of 1 night and then a maximum stay to a maximum number of nights, because you may want it to be as flexible as possible and you don’t mind if guests can stay long.
Choose check-in and check-out days. Again, be flexible as possible and choose every single day.
That will not be an issue to set up only weekdays in the builder, but not that is not our recommendation (select All days).
Seasonal rates in vacation rentals
You will use the seasonal rate for the highest or lowest points of the year or during a very specific moment in your area. We don’t add discounts on seasonal rates like we do with the basic rule.
Seasonal rates address periods of high or low demand, special occasions in your area.
You decide how many seasonal rates you would like to have. You can have a lot or you can have only a few. We would recommend getting an understanding about the local events in your area throughout the year.
Define your peak and low points in the year when you can go higher or lower than your basic rate.
Setting up the seasonal rates
Let’s say, you have a period of 2-3 weeks when it’s extremely quiet and you’d rather have any guests than to lose money. You can set up a special rate just for that by creating a seasonal rule.
The setup inside Your.Rentals interface looks a lot like the basic rate rules, except here we can set the name for this seasonal rate.
Pro tip! Add the year to every Seasonal rate name. It helps to control the ‘past’ and ‘future’ discounts.
Maybe I do not want that basic rule for some specific period of the year, because it is too cheap for me. So I’m going to select this time where I do not want to use the basic rule.
In this example I want to rate €200 on weekdays and €230 on weekends.
In the Minimum stay field we slightly increase the number of nights as I want guests to come for a bit longer period.
As for the maximum stay I don’t mind guests checking out on any day, so we take some extended number of nights.
We can have check-ins only on Mondays or Tuesdays, for example. But the more flexible you are, the more bookings you’re going to generate. So choose Any day.
Allow combination with Longer stay discount – this little tick-box in the bottom means that if you have a discount set up for 7/14/21/28 nights (those are options also in the builder to stay competitive) you might NOT want those discounts to apply on your seasonal rates.
If you leave it unchecked there would be no Longer stay discount available for that seasonal rate.
Now when our ‘Test 2’ seasonal rate is created, we can copy this season. It is important to have seasons covering over the one year period of time.
You may not be certain in 2024 or 2025 or a long time ahead about your prices or the availability of the properties you’re renting out. In this case set a really high price for that season. And maybe stricten it with the rules like minimum 10 nights stay or only check-in on some specific days.
Pro tip! Never block dates in your calendar. Instead set unprecedented low or high season rates for particular periods. OTA channels are very sensitive to listings with low availability, so blocked listings could impact your rating.
You got the point: always try to stay open and visible. You will still appear in Airbnb search, but with overpriced listings you ensure that if a booking comes through, you have a margin to play with.
You can ask the guest to relocate his reservation. At the very least, travellers can just see your listings in the channel’s search and get a touch point with your brand.
The easy way to copy seasonal rates is on the Seasonal rates page to click the big red button. In our example we have the 2022 test, 2023 test 2, 2023 low and 2023 high.
Some seasonal rates might last as long as 1 month or be limited to a week, a weekend or a single day, depending on the local events in your area.
Now we’re going to switch to the calendar view in the channel manager. In the Calendar view we have all the listings with the prices per night.
Custom rates for vacation rentals
For our example, we have a listing where people can book a one-night stay from Monday to Tuesday. Although the price is the same, maybe the rules that we have put in our Basic rate don’t permit single-night bookings.
By clicking on the calendar day on a listing, I can set a Custom rate and change the minimum or maximum stay conditions for that particular night.
Setting custom rate in the Booking calendar
Case of low demand – custom rates
You want your listings to be booked as often as possible, even during the low season.
So in the Custom rate field, you can lower the price from $200 to $100, because you want this one night to be booked. You can put a minimum stay of one night.
Check-in dates will not be impacted because it is only one night. You can write a private note for yourself: special discount only for this one night.
Seasonal rate settings in Your.Rentals interface
When done with the custom rate, you can copy and paste it on other listings or to the whole account.
Copy seasonal rate settings between listings
Case of high demand – custom rates
If you realize there is high demand for a special event, you can raise the price. For example, during a football game weekend in your town.
You can just do that for one or two nights. Almost the same settings as in the example above, but with a higher price. Here you go!
Be careful with custom rates
The Calendar view now displays a red dot on my calendar cell as a visual reminder that this is a custom rate. Nifty!
Custom rate is marked with the color dot in the Your.Rentals Calendar.
You will only want to use Custom rates for a little while and at a very particular moment.
You can do this over a longer time frame as well, but if it becomes too lengthy, we would then advise changing it to a seasonal rate so that you can repeat it every year.
Custom rates give you the freedom to change almost all rate settings on a listing.
If you want to get rid of the Custom rate, modify it or change the rate back to basic rates, or just remove the rule from your calendar.
Copying custom rates between listings
Custom rates could be re-used to market free nights in between longer bookings. In the builder > Discounts on the right, we have this little light bulb.
With just one click, copy your settings to other listings and save time by automating rate and discount management.
Here you can easily transfer the selected settings. Either choose all discounts, or you can pick only one high-season discount.
Copy paste seasonal rates in bulk
In each of those listings, enter the specific rates for each property. Although this is just general information, knowing the year ahead with some specific days covered is essential for you.
Having a plan for your rates gives you an advantage when considering things like seasonality and custom rates.
Listing rates syncronization between channels
You are probably familiar with synchronization. Your.Rentals can easily communicate with all the major OTA channels and send them the data on the price per night.
So if you introduce the seasonal adjustment or the custom rate to your basic rates, the system sends these prices to all channels that are enabled on your account.
Specific cases of discounts
How does the seasonal rate work with the discounts? They are very close to each other. You might have discounts for a longer stay. There is a little box that you can tick on or off when you create your seasonal rates to decide if such discounts should be applied. And this discount is only for longer stays.
A rule for Seasonal rates to include longer stays discounts
When applying this Longer stay discount, keep in mind that there may still be discounts on top of it, for example, early bird and last minute.
Seasonal rate – early bird discount
So if you have an early bird discount that is set up for 12 months, and some traveller books a year in advance, he will get a 10% discount. You have to be aware of this and maybe build it into your basic price.
Seasonal rate – mobile discount
There is also a special discount, which could be set for mobile devices (typically 10%). On Your.Rentals this does not apply to every channel but only to Booking.com, Expedia and Agoda.
Keep in mind that a 10% discount may apply when you get booked through these larger accounts.
Discounts do not stack
What if someone books early and from a mobile device: will they get a 20% discount?
No, they will only get a 10% discount. The discounts do not accumulate. So if you have the longer stay discounts and someone books 7 nights a year in advance from a mobile, it is not 10 plus 10 plus 10. It’s only 10%.
Discounts under specific booking conditions
There are other types of discounts you should be aware of, in addition to Seasonal and Custom rates.
In your booking rules, you can push the guests to choose a stricter booking or cancellation policy. This is not considered to be a discount, such as the early bird, so it will stack.
Non-refundable policy with a 5% discount to price.
So, if you offer seasonal rates and someone chooses the nonrefundable booking – the 5% discount will stack on top of your basic and seasonal rates.
Seasonal rates and discounts can be a great way to increase your sales, but it’s important to understand how they work in order to take advantage of them. In this article, we’ve gone over some specific cases of discounts and how they interact with each other.
We’ve also looked at some deeper discounts that are available under specific booking conditions.
If you’re looking for ways to drive higher rankings and more sales through your listings, seasonal rates and discounts may be the answer.