Raise Your Prices! – Make More Money Hosting On Airbnb

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I’m Sean and make over a hundred
thousand dollars a month on Airbnb I’m gonna give you 4 good reasons to
raise your prices let’s get into it all right welcome back Airbnb family
a lot of you have asked the same question a few different ways and
apparently our pricing strategy videos only give you the tactics but not
philosophy behind pricing so I’m gonna tell you why most of you should be
raising your prices indiscriminately across all your properties across the
board and there’s some good reasons why so first let’s give you the four reasons
and then I’m gonna tell you how to track also what you should base your prices
off of as like a baseline before raising or lowering your prices so reason number
one to raise your prices more than normal your listing is new this is an
SEO advantage if your listings new you have three months where you’re gonna pop
up more than anybody else just because your listings new this gives you the
opportunity to charge more money you’re gonna get more views which opt like
obviously means more bookings right so the way you look at this is like look at
it look at it like a funnel okay so for every 100 views if you get two bookings
it’s a two percent conversion if your rates are higher you might only get a
one point five or one percent conversion but if you’re gonna get 50% more views
or 100 percent more views for the first three months then you’re fine with half
the conversion and higher margins because remember now people’s reviews
say how much they paid for the listing you want your reviews to say you’ve
charged more money right that’s good so listing new to this leads into the
next one because when your listings new you also get a twenty percent off for
new customers coupon so you should charge more money when you have a coupon
this is another conversion rate thing so when somebody sees that get this special
discount imagine Kohl’s they have the same model they mark everything up just
to mark it down forty percent off when that’s their target price anyway right
so if you have a coupon raise your rates more so that way the coupon brings you
down towards your target rate makes sense
you’re still gonna collect the same amount of money but you’ll get a higher
conversion percentage because people want the coupon life is good that’s how
that works three another good reason to raise your
rates is when your calendar is open the reason why is because you’re gonna pop
up in searches more again this is another SEO thing the more dates you
have available the more valuable your property is because the more types of
guests you can accommodate you accommodate a three-month long stay or a
one-month long stay two-week long stay but the moment you have a three-day
booking one weekend in the middle of your calendar it ruins your ability to
have that month-long stay makes sense so this leads us to number four which is
raise your rates if you plan on doing a long-term discount I do this all the
time I jack my nightly rates up really high
just so that way I can offer 50 or 60 percent off for the month and I yes I
still get single night bookings at these rates
I never thought people would pay a single night booking for so I’m making
really good money on my single nights and then of course 5060 percent off on
the month Long’s which gives me more long-term stays
which gives me less churn that gives me less operations load I have less guests
to attend to in and out and that’s the bulk of working in Airbnb business is it
takes time to check yes in answer initial questions check this out do the
cleaning the turnover so if you have a longer term stays it’s just better for
your business right so how should you set your prices that’s a big question so
every city’s different and this this is the part where you’re gonna have to take
a few philosophies away from this video I’m gonna give you two main ones that I
use so first let’s look at four-star hotels they have a certain nightly price
and I want you to base your competitive strategy against four-star hotels and
nightly prices so if you can occupy two guests look at a king suite at a
four-star hotel and try to judge your prices based off of their for your
bookings that are further into the future of course when it gets closer and
closer to the date of arrival you’re gonna start fires selling off these
listings of course to make sure that they get full but if you have more
occupancy than a hotel it might seem hard to do this right but
there’s a solution so take a double suite right one that has two queen beds
that can occupy four people find out what the nightly rate is for that double
suite and divide that by four that is your weighted nightly rate per occupant
at your competitor hotel do this at your like few local hotels that are like most
relevant to your area and get that weighted nightly per occupant cost then
take how many occupants your listing can take multiply your occupant number by
that number so if a hotel is $180 a night for a double suite then that’s $45
per person you’re ten person listing should be able to
charge four hundred and fifty dollars a night makes sense okay so of course
these listings will get booked more in the future the bigger the property the
farther out your big bookings will come so six weeks eight weeks ten weeks from
now you’ll get those groups at ten twelve or fifteen now when it’s a month
from now three weeks from now there will be less large groups and more small
groups traveling so you’re gonna start to scale your listings prices down
closer towards a competitive rate for a group of two or three or four that’s
going to stay makes sense so yes that $450 a night listing for ten occupants
will become a hundred dollars a night or $135 a night a week out right or ten
days out you might even go as low as sixty to eighty dollars a night day of
for that property that you know the correct $450 for crazy right okay so the
other way to base your prices get on Airbnb and look around your local area
and find out what other people are listing for and try to find the more
expensive ones that are on instant book okay and then go into their calendar
like check availability when you go to click on it it’s going to give you like
basically like grayed out dates where it’s unavailable and dates where it’s
open and a few of you think that those great updates might be because they
decided just not to list their property those few days but you can tell which
hosts are like actively full timing their listing and which hosts are just
kind of part timing so when you look around your area look for those hosts
that you can tell that this is a full time Airbnb listing and that way it’s on
instant book the only days are ever grayed out are days that are booked
right so take a look at those and the ones that are getting bookings and are
the most expensive that’s the rate you want to start basing around set your
prices there and if you perform well then slowly raise your prices
restaurants do this if their chairs are always full then they’re not charging
enough for their food right you have 50 tables and 50 of them come to eat and
you charge an average of 15 dollars a plate that’s $750 right on plate for 50
plates but if there’s 50 tables and say only 48 of them get booked like but you
charge an extra $2.00 a plate sure you lost 30 on the two plates that
didn’t eat but then you got an extra $96 on the plates that did and that’s one
plate per table so do that multiplication by four right because
most groups are four or two so with that logic you slowly raise your rates until
you don’t have a hundred ocupado percent occupancy you raise your rates some more
until you’re probably floating somewhere around 94 percent occupancy I mean the
way you do that is course you get your big bookings far out and you slowly
lower your rates further and further in and you will get about 90 to 95 percent
occupancy if you manage your rates properly there are two two resources for
you here you can use to also get a grip for what you should charge for your
prices that’s air DNA and then wheelhouse so here’s how that works
air DNA will give you a graph based on percentiles what the lower 25% charge is
what the median is with upper 25% charges and also what those occupancies
are – you can’t tell which a listing is also at the top of its occupancy and the
top of its percentile for a listed price sorry but err DNA will give you some
insights on your area and I think they like the reports like 90 bucks per city
I think so this is not a good resource for absolutely new people because you
really have to understand the Airbnb platform so you can digest the
information that they’re giving you it’s really just analytics and if you don’t
understand the Airbnb it’s gonna give you some information
that you won’t know what to take away from another one wheelhouse they charge
you to automate your pricing strategy it’s like 1% or 0.7% for like a little
set of listings over ten I think but they do have a free portion of the
software if you choose not to automate your services through wheelhouse you can
so load your profiles up they still keep your data which is what they would love
to have and they’ll give you pricing recommendations based on their analytics
and their algorithm and you can then manually change your prices based on
what they tell you so if you want more of an advanced approach using
wheelhouses free feature should work and I’ll leave a link for wheelhouse down
below at the bottom of this video and I hope all of this has been helpful for
you but moral of the story here raise your prices because when I do consulting
calls with you guys on my my clarity comm there Mike
AFM website a lot of you tell me all about your property you have questions
and your questions aren’t usually about price but you tell me how much you’re
listing your place for and how many people you can host and all the time
you guys are just charging way too little it’s this is a conversation I
have with many of you it’s ok first let’s talk about your pricing and
restructure it you’d be surprised how many of you are selling yourself short
and let me tell you why you do this I know this is kind of like a bonus topic
here a little psychology for you the reason why I think a lot of you are
lowering your rates to the price that they are or just setting them at the
price that they are is you’re looking at your costs right the reality of your
business well my rent is this much or my mortgage
is as much the stuff that I have to buy for my listing is XYZ price and you have
this bundled cost and you’re like well I would like to triple that right or I’d
like to double that and so that’s your target goal you’re like well if I can
get you know 70% occupancy to double my money then I would just need to charge
this much per night I think you guys are kind of like reverse engineering your
price based on your income goals there’s nothing really wrong with that but
you’re definitely not maximizing profit and business is about maximizing your
profit not just hitting your little income goals remember you’re not an
Airbnb host anymore you are a business owner run it like a business and make a
lot of money because that’s why we’re here is to build a better life not just
cover our rent so thank you for watching Airbnb automated and I will see you on
the other side you

42 Replies to “Raise Your Prices! – Make More Money Hosting On Airbnb”

  1. Melissa Garcia says:

    This is awesome! We spoke with you over the phone through Clarity a few weeks ago. We followed your instructions exactly and have carefully watched certain videos on pricing multiple times to make sure we understand. We opened up of first airbnb unit on July 1st. On July 10th we had the entire month booked. 90% occupancy! And expected to make over $1600 in profit our first month!
    The pricing strategy was key. Holding until we were the only ones with availability allowed us to charge premium rates when our listing was brand new with no reviews.
    We really owe alot to you Sean! Thank you so much for taking the time to post these super informative videos. We are on our way to supplementing our income!

  2. Alex Wenzel says:

    had never heard of www.usewheelhouse.com, been using www.beyoundpricing. Are they pretty much the same? Do you prefer one over the other?

  3. Kathi Reed Myers says:

    Another fantastic video, Sean. Thank you.

  4. Jeff Feltes says:

    Your videos get better with each one, both in video/audio quality and content quality. Keep em coming!

  5. Rueski the God says:

    Very insightful! I’m in the process of becoming an LLC. I’m trying to find your course before I get too far in the process. Where should I look?

  6. Tasteful Traveler says:

    Sean, plz comment on last minute pricing. You say to lower prices as the time gets closer, in order to fill a vacancy.
    I disagree. My philosophy is to act like the airlines… last minute bookings or shortage of supply — to me means that people should pay higher prices for waiting til the last minute, when the pickings are slim, and the hotels are already sold out. It works great for me.

  7. Kathi Reed Myers says:

    Another question: Do you recommend AirDNA subscription and do you implement their pricing recommendations, or are there variables? Their recommendations are right at $100 more than my attempt at being competitive in pricing. Thoughts?

  8. Vinny John says:

    I like It

  9. cashflow says:

    Hi Sean, I am glad I found you and your great videos on youtube!

    I am a restaurant owner/entrepreneur based in China.
    Pre-host mode, looking to start ABNB full time, seeking ways to connect with my current businesses.
    Plan is to start out with 1~2rooms then eventually scale out within the same building : Negotiating discount rate for multiple lease(Corp. LLC deal)

    -. Good idea to rent and host in a fully furnished serviced apartment/hotel? (Competitor rate $37~50/day, studio only Bld.)
    -. Raise price?
    ======================
    + Competitor lacks(Niche)
    -. Run Airbnb Part-Time
    -. Low response rate
    -. Don't speak english
    -. Insufficient amenities
    -. Generic interiors and and photos on ABNB
    ======================
    Plan is to provide better experience and services(some optional)
    – Food delivery(Room Service),
    -.Discount coupons for local shopping etc..
    -.Transportation etc..

    What are your thoughts?

    Thank you!

    Ps. Webinars, apps, ebooks.. I am willing and open to learn more

  10. Stephen Yeh says:

    Not only better video, but he's also looking sharper as well 😀

  11. Red Tuk says:

    Hi. Great videos! I'm ready to dive in now. I finished setting up an LLC, but I don't know how to signup as an LLC host. Can someone point me in the right direction, please? Thanks

  12. Eddie Liu says:

    Can you do a video on where you have all your Airbnb properties?

  13. Honey Fender says:

    I use wheelhouse!

  14. hunwarrior says:

    Dear Airbnb Automated,
    Thank you for your videos, I learned a lot from them!
    I'm really new to this but I put my heart and soul into this flat and would love to see it going well. I only started it about 3 weeks ago, so far it's OK but suddenly all the enquires and bookings stopped. Could you please take a look at my listing? Am I doing something wrong? Maybe the price is too high? Thank you so much for your help!
    https://www.airbnb.com/rooms/25356065?locale=en

  15. gammafighter says:

    There isn't very much activity in my area. Does that mean my area is an untapped Goldmine, or is it a dud?

  16. Jude says:

    I've just been absorbing your content man, thanks so much. Do you use a property management company? Or do you just hire a cleaner yourself? Do you think it's possible to start this kind of business while working a 9-5? (assuming you setup systems for guest check-in/check-out). Once again thanks for the great content.

  17. Anastasiya Anders says:

    Hello! I really like your video content. Do you have a course on Airbnb?

  18. Ryan D'Alessio says:

    Do you charge per person over 2 people or is it just a flat rate?

  19. Raia Kousary says:

    Can you base your prices off local hotel prices and not worry about your competition on Air Bnb, I wish. Customers are comparing my property to others in my area on Air BnB usually not hotels.

  20. dustovshio says:

    If you are renovating part of your house (the basement) and you are new. How much should you charge being that there could be loud noises??

  21. Zachary Irwin says:

    Is that 100k/ month gross for the company, or net in your pocket?

  22. Charity Hough says:

    Video is doing better and better, no music in the background, good looking professional look, but could you next time add all your key points written on the screen so I can actually read it myself and maybe take notes myself as I listen to your video? Thanks and looking forward to your next video

  23. ovaj onaj says:

    It is very helpful to listen to your advice! Thank you for sharing it in such a charming way! Greetings from Germany

  24. DelmarvaCoinGuy says:

    The best Airbnb information around, tons of actual numbers and no "fluff". Thank you

  25. Flo M. says:

    Hey Sean! It seems that Wheelhouse is not available in Germany, but I really want to use a tool like that! Do you know any alternative software that is covering even smaller cities in Europe especially Germany! Btw you are giving great value and support! Please never stop 🙂

  26. Angela J says:

    Smart Pricing sets my pricing and it never really changes esp for hot calendar times like Christmas. I had to jump ahead to alter my fees and this Christmas I and getting four times the income! What is up with "Smart Pricing"!?

  27. Chris Pop Official says:

    You are awesome. Inspirational

  28. Kasia BIf says:

    …make sense and good suggestions Sean. I am running one year Airbnb Europe and Australia and I am happy to try it 😉 . cheers Mate

  29. Julien Peterson says:

    i love you man. keep up the great work!

  30. Saber Stimson says:

    such a savage. your video on why to not buy and to rent for short term leases was the first one i saw. I knew right then i was going to go home to jump right in. I was actually flying from austin which is where you were when you made that video I think to my home in Portland. I have this feeling like its already so saturated here in pdx as far as air bnb but i've already got three properties in three key parts of town im grooming. The knowledge you kick has a wealth of value..so happy i found you cuz you attack everything and you're thorogh. I love that its not all contained in a four cd set or some other bs..you just want a like and to subscribe..easy enough. Thanks for everything. I look foward to mining all your videos repeatedly for all i can get outta them. All the while picking up the language and sorta cadence to approach more and more property owners. I think i was a little overwhelmed at all the info in each video that i actually forgot to like most of them but..i plan on watching them all again and taking notes and i'll be sure to hit the like button on each one.
    -Saber PDX

  31. Charmaine Seymour says:

    How much TO rant a room?

  32. David Tran says:

    Are you saying that every time I raise my price on a exiting listing – it becomes new again ?

  33. L Brown says:

    Thanks 👍

  34. Sirena Spades says:

    I watched this before, but I was too new to hosting to absorb this key info, but this second time around I got it. We'll see if it works in my area! Prices are really low here. Thanks for what you do, it's awesome!

  35. Lilian Rich says:

    This is so good thanks Sean. I agree to maximizing profits and not just meeting goals.

  36. Nora Hola! says:

    Thank you Sean. I’m restarting my Airbnb business and this is very helpful!

  37. Sean Denney says:

    Love your videos, dude. You give great advice. I just started in the Airbnb game and I am making 43% ROI right now! Beach Properties are HOT!

  38. Jordan Jones says:

    Are you charging a flate rate or per person

  39. Carel Kuun says:

    Awesome channel. I'm watching more and more but the ads are becoming a bit much.

  40. bigchen888 says:

    You give some great info. I host two Airbnb’s starting last year. If I watched your videos starting last year I would have probably made 20k more. Keep up the good work!

  41. Robbie Baldwin says:

    Thanks so much for your videos. I've been hosting for years but am learning so much 🙂

  42. Nora Hola! says:

    Keep learning my dear Sean, every day this is more and more exiting yeiiiii!!! Gracias for all your help !!!

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