How are you setting rental rates??

Question

We’re getting ready to go live next month or April. I’ve been researching this question by looking at listings in our same unit (VRBO & ABNB) for different time periods.

I read that some people have higher weekend or holiday rates. VRBO doesn’t show that, only one nightly rate when looking at properties. Does that mean they are averaging the total per night to give you one nightly rate (if someone has different weekday vs weekend rates)?

We’re also planning on having lower rates to begin with. How long should that last for? A month, the first season?

I was going to make a spreadsheet for our resort alone (condo in PCB) of rates throughout the season with comparable units . Is this the best method to set our rates?

Sofia Sharkey · Answer

@Wesley Myers I recommend price labs and that’s what I use in my business. Pricing is very important, price your place about comparable to others in the area and offer a 15% to the first 3 bookings, you don’t want to undercut too much and attract problem guests. Also Airbnb already offers a discount to the first bookings I think, so make sure you check that. I’ve seen too many hosts who offer a discount on top of airbnbs discount not realizing and giving away nights almost for free. Good luck!

Paul Cox · Answer

See Enemy Method by @Luke Carl here in the forums. Best of LuckPaul

Luke G. · Answer

I use pricelabs, paid for itself in one booking. Wasn't quite sure what price to start it at, I used their suggested price and now have about half my summer booked at 200$'s/night more than what I was originally planning. Removes the thinking, I don't see myself going from it, just updating the base price and let them take it from there. You obviously need the reviews, but don't go dirt cheap either, that invites the riff raff. you'd rather be unoccupied than have a bunch of people destroy your house. Luke will be in soon, hop on a phone call with him to get an idea of where to start.

Mark Futalan · Answer

@Wesley MyersWe use pricelabs as well and sync our calendars. We set minimum nights and rates. You can fine tune different settings but highly recommended. Minimal monthly fee for the pricing and revenue benefit you get in my opinion.

Andy Kessler · Answer

Wesley, Before getting our STR we already had an idea of what rates we would charge because we have a friend with a similar cabin in the same development. I have used that along with what other cabins with my amenities and features charge, so yes I use a comparison method. I like being hands on with your first rental to get a feel for what is going on in the marketplace. Maybe when I get my second cabin I’ll automate, but my thinking is I need to learn before I give up that control. When we do make that jump I can then look at the recommendations and decide if I agree based on experience. You should be able to see the rates on a per night basis just by pulling up another owners property as if you were going to book to see the rates. You need to take it one step further than where you are just looking at the front page. Understand some people may be too high and some too low, but if you are competing against other condos in your development, you probably need to be close in the pricing. As for how long to do it, I suggest setting for a specific number of bookings on each platform and then take it off. also these platforms have set times when they will move you to the Premier Partner or Superhost so have a goal to have the number of bookings you need by that date. That may influence your decision. We have used VRBOs Marketmaker to adjust prices and it has helped. Couldn’t agree more in the comments about going too low and getting a crowd that causes issues. At the end of the day are you happy with the amount you are getting for your property? If the answer is “yes”, then it was a good day.

Matt O. · Answer

Yeah, any form of dynamic pricing can help pull in data regarding comparables, events, and seasonalities to help gauge what price makes the most sense for you. Our company uses Wheelhouse and we recommend that as well. Nothing wrong with Price Labs, just a matter of preference and goals. For example Price Labs is great for more units and offers a revenue management system.

Claire Rosenberg · Answer

Hey @Wesley Myers I would recommend utilizing a dynamic pricing tool like Pricelabs. It sets the price based on the market and demand. This way you don't have to guess what the price should be and optimizing the best price for your STR.

Jim Edelson · Answer

A bit of a hijack here, but I'm curious what opinions you all have of VRBO's MarketMaker tool. It provides a graph of how your rates compare to 'comps' in the area. Is this very accurate?

Jodi V. · Answer

Hi Wesley, We own a STR in Panama City Beach! In order to set our pricing before going live with our listing, we looked at data on AirDNA and then also looked at comparable units on AirBnB and VRBO. Usually if you select just weekend dates, you can see what hosts are charging for weekend nights vs weekdays. We charge about $10-20 more / night on Fridays and Saturdays. I agree with what another commenter mentioned above, when you publish your listing on AirBnb you will be given the option to give a 20% discount to the first 3 bookings. I would suggest doing that rather than lowering your rate. It will encourage people to book and will hopefully get you some good reviews. Welcome to the area & all the best with renting out your condo!

Mike Anderson · Answer

Get pricelabs, it has all the date you need to set your base rate, as well as automatically set rates. Worth every penny.