What is Airbnb pricing?

Airbnb pricing is the practice of setting rates to your Airbnb listing. Airbnb pricing can be set any number of ways. As a hotelier, you can choose to set your Airbnb rates manually, to use the preloaded Airbnb pricing tool (Airbnb Smart Pricing), or use another Airbnb pricing model or strategy, such as cost-based pricing, competitor-based pricing or value-based pricing.

Secure a competitive advantage on Airbnb

Rise above the noise on Airbnb. Gain insights to help you to set the perfect rates, and control all your booking channels, including Airbnb, through one screen.

Learn more

Why is it important to get your Airbnb pricing right?

Airbnb is a unique booking channel for hoteliers; one that sees you compete against not just professional hoteliers, but private hosts too – the holiday home owners, the empty-nesters with rooms to spare, and the retirees who treat their bed and breakfast as more of a hobby than a business.

This means that nailing your Airbnb pricing strategy is critical if you are to succeed on the platform as a hotelier, because many hosts may not be as focused on profit as you are, which can make finding the right rate, and a competitive rate, a little more challenging.

But get your Airbnb pricing right, and you can dominate one of the most popular booking channels in the world, boasting over 150 million active users.

How does Airbnb pricing work?

It’s entirely up to you how you price your Airbnb listing. You can choose to manually load in prices for each room on each day, or you can choose to utilise Airbnb automated pricing, which sees room rates set by the Airbnb pricing algorithm based on factors like room details, demand and average market rates.

To set your rates, navigate to your Airbnb hosting dashboard and click ‘Calendar’ on the top menu, which brings up a calendar that lists all of your bookings. Click on a date to set a room rate for that night.

When you click on dates, you’ll be offered the opportunity to toggle Airbnb Smart Pricing on and off. If you set it to ‘on’, you leave your pricing in the hands of the Airbnb algorithm.

Types of Airbnb pricing

Airbnb dynamic pricing

Airbnb dynamic pricing is generally the most profitable – but also the most time-consuming – pricing strategy available to Airbnb hosts. Dynamic pricing bases prices on a number of factors, such as costs, supply and demand, competitor pricing, perceived value and market conditions.

Prices are never set in stone – they are constantly updated to whatever rate will earn your hotel the most money while still being likely to attract bookings.

Airbnb seasonal pricing

A simplified version of dynamic pricing, Airbnb seasonal pricing sees a hotelier set their prices according to the demand for rooms. Rates are higher in high season, lower in low season, and transition between the peaks and troughs during shoulder seasons.

Airbnb weekend pricing

More people travel over the weekend than during the week – a fact that Airbnb weekend pricing is designed to take advantage of. The strategy is simple: ensure weekend rates are higher than mid-week rates.

With rates charged on a nightly basis, weekend in the hotel context usually refers to Friday and Saturday nights. If you’re wondering how to set/change weekend pricing on Airbnb, simply follow the steps outlined in the section above.

Airbnb early bird pricing

Early bird prices are a great way to fill rooms well in advance. With bookings locked in well before the dates arrive, you have more time, and less pressure, to sell more profitable bookings.

Airbnb promotional pricing

There are any number of reasons to offer promotional pricing: to encourage bookings in low season, to fill the last available rooms, to attract your first guests or to secure some glowing reviews for a new or newly renovated room.

The great thing about Airbnb is that discounts are automatically shown to users. If you reduce the price, the listing will show the original rate with a strike-through and the new discounted rate below, without you needing to lift a finger.

Airbnb pricing strategy for setting your rates

The right Airbnb pricing strategy for you will depend on your situation. As a business owner you should always begin by working out your break-even point to ensure the bookings you secure make you money.

Where you go from there is up to you. You could use any or all of the pricing strategies above, or you could base your rates off what customers think they’re worth, what competitors are charging, or market conditions.

What is the best Airbnb pricing tool?

While Airbnb Smart Pricing is a useful tool, there’s no advantage to be gained from using Airbnb pricing software that every other host, professional and amateur, has access to.

The best Airbnb pricing tool for a small, independent hotelier is one that can form a true differentiator, that gives you the insights you need to set smarter, more alluring and more profitable prices, and that ideally integrates with the rest of your hotel software.

By Dean Elphick

Dean is the Senior Content Marketing Specialist of Little Hotelier, the all-in-one software solution purpose-built to make the lives of small accommodation providers easier. Dean has made writing and creating content his passion for the entirety of his professional life, which includes more than six years at Little Hotelier. Through content, Dean aims to provide education, inspiration, assistance, and, ultimately, value for small accommodation businesses looking to improve the way they run their operations (and live their life).