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How to price your Airbnb

A basic and advanced lesson on getting the best price for your listing

Who are we?
My wife and I have been hosting on Airbnb for 3 years now.  I happen to also have worked at Airbnb's Asia office doing market development work in Indonesia. That was a sweet gig, getting to work at Airbnb and live in Bali at the same time.  We started a villa rental business in 2011 to help students find long-term accommodation here in Jimbaran.  We now look after 80 rooms in 17 locations in South Bali and our business has grown rapidly with the rise of Airbnb in Bali. 
One of my jobs at Airbnb was to lead the host community in Bali, which is quite possibly one of the largest hosting communities in Asia with over 7000+ listings. I got to teach hosts how to succeed on Airbnb and it's summarized in these hospitality talks here
The Competition is Intense
When my wife and I first started hosting on Airbnb, there were perhaps 200-300 listings in Bali. Most listings looked dinky. The photos were taken from Nokia camera phones. There were tons of spelling and grammar mistakes in the descriptions. There were a lot of dubious hosts with no reviews. Now there's a very lively marketplace with thousands of options and a healthy number of well-reviewed listings.
I've since discovered some unique ways of marketing on Airbnb to get the most successful hosting experience. I'd like to share them with new hosts who are thinking of becoming awesome Airbnb super-hosts. 
Alignment
Some of our marketing tips will likely boost your search rankings and your revenues, but keep in mind that you'll need a long-term commitment to hospitality, and consistent five star reviews from your guest to do consistently well. If you're long term goal is to make sure you have happy guests, then you're likely to do well with or without these tips.
Pricing your Airbnb: Basics
"How do I price my Airbnb?"  This was one of the most popular questions that new hosts would ask me. The secret to pricing your listing well is to think as a guest.  How would a guest find your listing if they were coming to your area? How would they feel about booking your listing?
Do a search on Airbnb for your area and see what sort of options are available.  The three most important factors are:
  1. Location
  2. Price
  3. Reviews
You don't want to be the host that charges $200 a night when a few dozen neighbors only charge $150.  Also here's a good tip: If you haven't gotten a review yet, discount 25-30% until you get your first three reviews. When you publish your property on Airbnb, your new listing will be promoted to the top of search results ( Maxim Charkov, the engineer who wrote the search algorithm at Airbnb explains in this video ) for a short while. If you get a booking quickly, you'll be more likely to stay at the top.  
Remember that most guests won't book a new listing without reviews, unless it has a compelling feature. Price is usually the most compelling feature before you've earned reviews.
Why three reviews though? Because after three reviews, your Airbnb rating (0-5 stars) will show up on your listing and your ranking status will be visible. 
Advanced Pricing Strategies: Wishlist Analysis
Say for example, I'm a new host in Ubud, Bali. I've just gotten my listing published and I want to get a lot of bookings and be successful. I might have a lot of questions. How do I find my market? Who are my competitors? What is my guest's likely budget. 
Wouldn't it be nice to know what guests are actually searching for? What their budgets are? And who your most direct competitors are?  There's a cool trick you can use to find out exactly what guests are searching for in your area and what kind of listings they're likely to book. There's a wish-list function in Airbnb that allows you to shortlist potential candidates. 
Here's how you can use it to find out who you're most directly competing with and get great insights to what guests are looking for in your 'hood. 
  • Begin by searching for the region. Look for a really successful listing. Something with tons of reviews and comes up on the first page of search. (In this example, I looked in Ubud, Bali, I picked the treehouse listing with over 100 reviews)
  • Next I click into the listing and look at previous guest reviews. I can click on a guest profile and check out the person that left the review. We'll pick "Kate" in this case, her review is pretty recent. 
  • Let's click into Kate's Airbnb profile and see if there's a wish-list. Now a lot of guests won't have wish-lists, so this won't work every-time. Generally speaking more than 25% of guests that I've seen use the wish-list function.
  • Wonderful. Kate actually built a nice wish-list for Bali and shared it publicly, so we can click into that and get to see the options she was considering before she booked the tree-house. 
  • Great. This is amazing data. From Kate's Wishlist, I know have figured out a few things.
  1. Guest preferences: Kate likes unique, authentic local listings. She might even prefer thatched roofs.
  2. Budget: Kate has a budget between $27-65. She booked at $65.
  3. Location preference: Kate was planning to only visit Ubud, and not any other locations in Bali.
  4. Demographic: Kate is from the United States.
  • There's 109 past guests in this one listing alone, and with about an hour's time, you can get good data from real guests who've have skimmed through thousands of listings and have basically shortlisted the most compelling listings. 
Hopefully now, you've gotten an idea of the budgets of past guests, their preferences in terms of architecture & location, their demographic data. And now you can be on your way to building a great Airbnb listing. 
Conclusion:
There's a flurry of other pricing strategies and data analysis you can do with publicly shared information on Airbnb.  If you've got some fresh ideas or like to discuss more, please send us an email at bukitvista@gmail.com or tweet us @BukitVista. 
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