July 16

Airbnb Pricing Strategy For Hosts: Compete & Win On Airbnb!

The Airbnb pricing strategy you use will determine your profitability and success as an Airbnb host.

In fact, this one thing alone will play the biggest role in your end of year earnings, above all others. 

In this post your going to learn how to strategically price your Airbnb property in a way that will: 

  • Generate the highest nightly rates
  • Maximise your occupancy.
  • Minimise vacancies and dormant nights (unbooked nights between bookings).
  • Increase length of stay durations.
  • Create more cash flow consistency.
  • Mitigate downside risks.

Now there’s a lot to get through in this article, so buckle up, as you’re about to switch your Airbnb listing into overdrive…


Airbnb pricing can be a complex subject for hosts that really want to maximise the revenue of their properties, but understandably, not everyone will want to invest the same time and energy into the process. 

Naturally, casual hosts with just a single dwelling may not put such emphasis on pricing strategy as hosts with multiple properties (although they definitely should), so what I’ve done is created three different pricing strategies from novice to advanced to cover all bases. 

Regardless of which strategy you choose, be sure of one thing, that having a strategy beats pricing blindly every day of the week. 


The novice host is someone that’s new to hosting on Airbnb, knows they need a pricing strategy to compete, but doesn’t know where to start.

If that’s you, then following with the suggestions below:


Like I mentioned earlier, any pricing strategy is better than none, and the most primitive form comes by having different nightly rates for weekends and weekdays. 

Simply adjusting your rates in this way will increase your revenue during the busier periods where you can price your listing higher like on weekends. 

To get an idea of the price increase you should charge for weekend rates, simply do a bit of competitor research to find a realistic rate. 


Airbnb has an inbuilt smart pricing tool that will dynamically set the pricing for you. The benefits of a tool such as this are great as your price per night will rise and fall with the fluctuations of demand. 

Word of warning however, this pricing tool is programmatically set to maximise bookings, not maximise revenue. 

So to account for this misalignment, I recommend using the smart pricing recommendations as a base price, then adding roughly 20% to the figure as the price you set for your listing. 

With this strategy you’ll have a dynamic pricing model that fluctuates with demand, that’s also set to maximise revenue at the same time. 


At level 1 what you’re really looking for is a proactive approach to setting your Airbnb prices. Unlike most hosts that set it and forget it, with little to no pricing strategy to think of, these two methods will get you in the game and help you to start competing. 


Level 2 is for hosts that really want to step up their game, that likely understand the impact effective pricing has on their bottom line.


Dynamic pricing is the term used for prices that adjust to the ebbs and flows of market demand. 

In times of peak demand prices will rise, and in quiet times they fall. 

These price fluctuations are handled automatically, in real time, by complex algorithms that track the market data adjusting the price of your listing automatically for you. 

Using a dynamic pricing tool is an incredible way to boost your revenue instantly, and have you competing on price for every date range for the next 365 day time horizon. 

My favourite pricing tool by far (and the one I personally use) is Wheelhouse. 

I’ve found their pricing models better than any other, plus their fees are miniscule. 

By simply investing in a tool like this you’re guaranteed to have a pricing strategy that beats 99% of the market instantly, with immediate impacts to the number of bookings you’ll get, plus the rates you’re able to charge. 

I can’t recommend this tool highly enough. 


Simply opting to use a paid dynamic pricing tool like Wheelhouse, setting it and forgetting it, will dramatically increase the revenue you generate from your property.

A one time setup process, that’ll work for you every minute of every day. 


At level 3 we’re stepping things up a notch, with pro level strategy to maximise the earning potential of your property, minimise issues and bad guests, and mitigate cashflow risks too. 

For level 3 I still recommend using a dynamic pricing tool like Wheelhouse, but this time we’re going to pimp the tool at every level to optimise everything possible. 

By default, Wheelhouse will use its own algorithm to give you the best data set possible to set your prices, however, no one knows your property better than you, so this is where you can get really granular, to set everything bespoke to you. 


The base price of your listing is the price associated for your listing without any market forces impacting its price. 

Natively, Wheelhouse has its own settings for this: Conservative, Recommended, & Aggressive. 

These setting are great, but you can override them by creating your own base price; 

From this, all other price fluctuations will be derived. 


Longer stay bookings require less admin, and much less labour as your property will need to be cleaned less. 

Furthermore, longer stay bookings can help to reduce vacant unsold nights too. 

To encourage longer stays, consider offering discounts for weekly or monthly bookings.

This can be a powerful strategy in the offseason for maintaining cash flow too. 


Some destinations are more prone to undesirable guests than others, namely party towns that encourage drinking. 

If this is you, then optimising your listing to incentivise the type of guests you want in your property is going to save you a lot fo headaches, and money from damages too. 

To do this consider offering multi day discounts 3,4 or 5 days to attract a different clientele. 

For example, increase the nightly rate for weekends (to discourage party goers) and add a healthy discount for longer stays to price your property attractively for your ideal guests. 


The more restrictions you place on your booking criteria, the less likely you are to show up in Airbnb’s search results. 

The rule that will have the biggest effect on this is the minimum nightly stay you set. 

My recommendation is to open up your calendar to allow for single nightly stays, but here’s the trick, add a rule to your listing to increase single nightly stays dramatically to discourage booking. 


The more eyeballs you get on your listing the better, and, it’s widely thought that clicks on your listing are a positive ranking factor, helping your listing to be shown to more people across the board. 


Dormant nights are those pesky, single days wedged between two bookings. 

These nights are the hardest to sell by far, and here’s why. 

You see, Airbnb’s search engine uses what’s known as a bolean search algorithm. 

In an effort to not bore you to death it can be explained like this. 

If this, then that. 

So, in the context of a dormant night you’d need a user to search for the exact date, for a single night only, in order for your listing to ever be shown as bookable. 

Now the chances of this happening are very slim, which means you have to have a strategy for when such times arise. 

Here’s what I do.

I have two approaches. 

Firstly, I heavily discount the date. I do this so that if anyone did happen to meet the booking conditions above, I want to ensure that I’m top of the search results to convert that booking.

Secondly, I have an automation set up within my property management software (I use Hospitable) and it will automatically message my guests an upsell of the dormant night at the discounted rate. 

This way, I maximise the chances of selling the night, automatically, every time.

I suggest you do the same.


The lead time is the amount of time before a booking is made for your property. 

Let me explain.

If your property gets booked out on average thirty days in advance then your lead time is thirty days, and naturally, you want your lead time to be as big as possible, but if you’re looking to get the best prices for your property, that’s not always the case.

So you need a pricing strategy for unbooked calendar dates to get them filled to avoid unwanted vancancies. 

The best way to do this is to set price reduction rules for different time horizons prior to booking. 

Naturally, bigger more expensive properties will want to begin offering discounted rates earlier than smaller, budget listings, as the demographics that usually book out such properties usually do so in advance. 

There is no set rule for how much to discount and when as there are so many variables at play, from property to property, but the exact amount is not as important as having a plan of action to follow. 

With a pricing action plan you’ll be maximising the probabilities of securing bookings at all times. 


During low season, bookings can be hard to come by, so a different pricing strategy may be needed. 

With a small pool of potential customers to compete for, it’s imperative that you try to maximise the revenue from the bookings you do get. 

This is where I suggest highly incentivising longer term stays, weekly or monthly, by offering discounted rates. 

Much better to have two week-long bookings than two single night stays - even if the nightly rate is reduced. 

A strategy like this will help to smooth out your cash flow during lean times, better equipping you to compete in the market. 


I’ve created a whole course on searchability and how to to rank number one on Airbnb’s search results, so I won’t go too in depth here, but it’s safe to say that your position in the search results massively impacts the price you can charge, and the number of bookings you get. 

Rank at the top and you’ll get the lion’s share of the bookings, rank at the bottom and you’ll be scratching around for scraps, charging pennies when you could be charging hundreds. 


Most people don’t see performance on Airbnb as a competition, but it is, and it’s ruthless. 

You’re literally competing with hundreds of other hosts all vying for the same prospective customers, and sometimes winning at this game requires thinking outside the box and going against the grain. 

For instance, let's say that everyone in your market was aggressively competing for weekend bookings, with high rates on Friday and Saturday, and reduced rates during the week. 

To create your own blue ocean why not try creating a rule discounting 3 or 4 day bookings, that include the weekends? 

A simple tactic like this would help you to secure the discounted weekend booking rate, alongside extra weekday revenue too.

This is just one idea but it serves to highlight how thinking outside the box can help you out-fox your competitors.


The pricing strategy you implement should emulate the booking behaviour of your target audience. 

For example, if you’re targeting families and have a larger property you’re going to want to incentivise for weekly bookings - so set your pricing to reflect that. 

Likewise, if you have a small studio, you should optimise your strategy for shorter nightly stays too. 

Whatever the booking habits are of your ideal customers, be sure to replicate that in the way that you set your prices. 


Some locations have more extreme demand fluctuations than others, and this requires a nimble all-weather pricing strategy that optimises for each season.

In high season, a lower lead time is likely more palatable, alongside a more aggressive approach holding out for top prices. 

Whereas in low season, a bigger lead time is preferable to secure cash flow to sail you through the lean months stress free.

Consider making rule based adjustments to pre-empt the booking behaviour of your guests to maximise occupancy year round. 


When a booking is made on your calendar, the day/s preceding it become instantly harder to sell. Let me explain. 

Due to the way Airbnb search works, it’s now orders of magnitude more difficult for your listing to show up in the search results on the days before a booking as search it’s much less likely for your listing to meet a searchers criteria. 

For this reason, I recommend creating a rule for discounting the adjacent days prior to a booking to increase the chances of selling the nights. 


It cannot be overstated the impact a successful Airbnb pricing strategy will have on your end of year financials. 

This one simple factor will dwarf the impact of all other optimisations by an order of magnitude. 

Take the time to get it right, and you could well turn your property into a gold mine you never thought possible.

Got any questions?

Pop them in the comments to get the conversation started. 

About the author 

Rowan Clifford

Hey, I'm Rowan.  I'm a bit of a nerd, and froth a little too hard when it comes to Airbnb. And, I LOVE anything that makes my life as a host easier and more lucrative (which is pretty much exclusively all I write about on this blog). Tools, tips, tricks and sneaky hacks are my kinda thing...

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