13 Profitable Airbnb Pricing Strategies with Examples

Hopefully your rental is not in Barcelona, which has a total ban on Airbnbs. As countries tighten restrictions on vacation rentals, it is critical to use the best Airbnb pricing strategies to maximize your profits.

Thankfully for those in the U.S. (outside of California and NYC), restrictions are relatively light. In any event, read on for the 13 proven strategies for Airbnb hosts to get the most for their rentals, each with an example of how to do it and the AI tools to do it smarter.

Strategy #1: Base Rate Pricing

Base rate pricing is when you set a base price for your listing and keep it there. Like most of the Airbnb pricing strategies, the base rate pricing structure is commonly used by hotels and is the simplest approach. Base rate pricing is clear and guests know what to expect.

If you want to maximize your return, you’ll want to explore other strategies so you don’t leave money on the table. (The pricing strategies get more difficult as you keep reading down this list.)

Even if you are just going to stick with a base rate, AI tools can help. Unfortunately, the three best tools for base rate pricing – Beyond Pricing, Wheelhouse, and PriceLabs – also require some learning time. Pricelabs is the most complicated of the three. These tools analyze historical data, market trends, and competitor pricing to recommend an optimal base rate.

Currently, Beyond Pricing costs 1% of booked revenue, Wheelhouse is 1% of booked revenue (or $19.99 per listing per month), and PriceLabs is $19.99 per listing per month for the first 1-2 listings (with discounts for additional listings).

Example: Setting your Airbnb’s nightly rate at $99 year-round.

Strategy #2: Seasonal Pricing

Seasonal pricing means that your prices change depending on the season or time of year. Seasonal pricing maximizes revenue during peak times and helps increase your occupancy during off-peak times.

If you are going to use seasonal pricing, you’ll either have to spend time researching and planning, or pay for a tool to do it for you. The same tools that help with base rate pricing help with seasonal pricing – Beyond Pricing, Wheelhouse, and PriceLabs. They work to predict seasonal demand and automatically adjust pricing using historical data.

In spite of the time it takes to learn the software, this strategy is still a good choice for new hosts. It works particularly well for vacation rentals and beach properties.

Example: Charging $160 per night in the summer and $75 per night in the winter.

Strategy #3: Length of Stay Discounts

When you offer a discount for a longer stay, guests will often see this as a “deal” and book for a longer period of time. Though you, as the host, get a lower rate per night, you have a higher occupancy and more overall revenue.

To help figure out what the discount rates should be, you can use tools like Smartbnb (Hospitable), PriceLabs, and Wheelhouse to analyze booking trends. Hospitable costs $40 per month for up to 2 active listings, and $15 per active listing per month for 3-19 listings.

Example: Offering every third night free, or a weekly rate for guests staying over 7 days.

Strategy #4: Weekend vs. Weekday Pricing

Just like hotels, Airbnb’s can increase their earnings by charging different rates for weekends and weekdays. Figuring out the right prices on the right days can be tough to do manually, but luckily there are now AI-powered tools to help (Beyond Pricing, Wheelhouse, and PriceLabs). These tools figure out the best rates for weekends versus weekdays by looking at the demand for local rentals, and what your competitors are charging.

This pricing approach is particularly effective for urban apartments and vacation rentals.

Example: Charging $120 per night on weekends and $90 per night during the week.

Strategy #5: Special Event Pricing

Again, like hotels, Airbnb can get higher rates from customers when the demand is high due to an event or a holiday. This means you have to know what events are coming up locally, and how much more guests would be willing to spend over a normal rate. The type of event, or the holiday, matters as well because people will spend more money for bookings during Christmas than the 4th of July, and more money for the Kentucky Derby than a local cheese festival.

The same tools mentioned above (Beyond Pricing, Wheelhouse, PriceLabs) can help automate this process.

Example: Increasing your rate during a local festival or sports event, such as $1500 a night during the Kentucky Derby versus $200 a night.

Strategy # 6: Last-Minute Discounts

Last-minute discounts help you fill rentals that would otherwise be vacant. It comes at the cost of a lower rate, but a lower rate is better than no rate. The same tools as above (Beyond Pricing, Wheelhouse, PriceLabs) can help automate this process so you can fill your vacancies. This approach is best for experienced hosts.

Example: Reducing the price by 20% for bookings made within 24 hours of the stay.

Strategy #7: Minimum Stay Requirements

Unlike many of the other Airbnb pricing strategies, this is one that you won’t often see used by hotels. By setting a minimum number of nights, you will have less customer service, less administrative work, and less cleaning. Yes, you will lose out on some potential guests, but typically you will come out ahead. Using the tool Smartbnb (Hospitable) will be the simplest tool to help recommend the minimium stay requirement. You can also use Wheelhouse or  PriceLabs.

Example: Requiring a minimum stay of three nights.

Strategy #8: Dynamic Pricing 

Dynamic pricing is a strategy used widely across industries and is a combination of many of the strategies in this list of pricing strategies. As the name “dynamic” implies, the result is pricing that is continuously changing using real-time market data.

The easiest way to do this is to use Airbnb’s Smart Pricing tool. It is simple to learn to use. And it is free as part of the Airbnb platform (which charges a service fee typically 3% of the booking subtotal). It will automatically adjust your pricing for you. You could also use other tools (Beyond Pricing, Wheelhouse) to implement a dynamic pricing strategy.

Example: You have a two-bedroom apartment on the beach in Florida. It is summertime, 24 hours before the vacancy, and there is a major festival happening in the location. Airbnb’s software adjusts your apartment rental rate based on all three of these factors (season, last minute, local event).

Strategy #9. Market-Based Pricing

Your price needs to be in line with your competition in your area, so you should keep up with local trends to make sure you are competitive. To do this on your own (without software to help you), you will need to continually analyze your market and make sure you are at least matching local rates. You can also use AI tools (Beyond Pricing, Wheelhouse, and PriceLabs) to monitor competitor listings and local market trends for you.

Example: Checking similar listings in your area on a regular basis and changing your pricing to meet or beat your comparables.

Strategy #10. Cleaning Fee Adjustments

Although customers don’t have to pay a cleaning fee for hotel stays, cleaning fees have been common for vacation rentals and apartment rentals for many years before Airbnb existed.

Being able to effectively increase, decrease, or eliminate cleaning fees is difficult to get right, especially for a newbie in the Airbnb rental industry. You still have to cover cleaning costs, and the point of using cleaning fee adjustments is to make more money, not less. If you go higher, you will deter some guests. If you go lower or eliminate the fees, you might decrease your revenue.

Using a simple tool like Smartbnb (Hospitable) is a good option to help you set a cleaning fee that seems reasonable to guests and while offsetting your true price of getting the space ready for your next guest. The more complicated PriceLabs tool is another option.

Example: Charging a $50 cleaning fee and a lower nightly rate. Or eliminating the cleaning fee if the guest books a longer stay (for example, 7 days, as a motivation for a longer booking).

Strategy #11. Custom Pricing for Specific Days

This approach is best for experienced hosts, and even then, it is time-consuming to do manually. To correctly set custom prices for specific dates, you will need to keep track of all those potential dates, and also get the price right so you get the highest rate you can without going so high that you don’t book your space.  Using tools (like Beyond Pricing, Wheelhouse, and PriceLabs) saves you time by picking out the high-demand dates and recommending the pricing based on historical data and pricing trends.

Example: Setting a higher price for the Labor Day weekend.

Strategy #12. Promotions and Special Offers

Who doesn’t want a promo code or a coupon? Having a promotion or a special offer will draw attention to your booking and create a sense of urgency for the guest to lock in that booking…now. To cut down on the planning and monitoring time, use a simple tool like Smartbnb (Hospitable) or a more robust tool like PriceLabs to do your analysis and implementation for you. This strategy is ideal for property managers and experienced hosts.

Example: Offering a 20% discount for bookings made three weeks in advance.

Strategy #13. Personalized Pricing 

The personalized pricing strategy is the most difficult of them all. It means that you price based on your unique goals (whatever they are) and your property’s specific characteristics. This approach gives you a lot of flexibility, but to pull it off well you need extensive market knowledge and the time to continuously adjust your rate.

After the learning curve, tools like Beyond Pricing, Wheelhouse, and PriceLabs can save you time by helping you design your personalized pricing strategy and by implementing it. It is best for property managers and experienced hosts with luxury homes or unique properties.

Example: Combining several strategies to fit a luxury beach house’s unique market.

Conclusion

Whether you’re a newbie or an experienced host, and regardless of your property type, there are profitable pricing strategies for you.

When it comes to tools, although Airbnb’s Smart Pricing is the easiest and cheapest to use, its dynamic pricing strategy should be just one of the strategies you use. Adding Smartbnb (Hospitable) to your toolset gives you an easy tool that can implement strategies in #3, #7, #10, and #12. If you want to use AI with the other strategies, you will need to use the other tools that take more time to learn and fully navigate.

You could start out simple with the base rate pricing, learn Airbnb’s built-in free Smart Pricing tool, and then add additional tools as time permits.

You can do this!