The Best Pricing Tools for Airbnb

What’s up guys, in today’s video, we’re going to be talking about pricing. Specifically, I’m going to share with you the top best pricing tools to use to optimise your performance on Airbnb and other short term rental platforms. Now this is a crucial step if you manage properties for other people on Airbnb, or if you invest in short term rental properties and you own your own, you want to make sure that you’re optimising your pricing strategy. Because if you don’t, you’re going to be leaving a whole bunch of money on the table, you’re either going to be underpricing your nights, and therefore just leaving money on the table from what you could have gotten, or you’re going to be overpricing your nights and therefore nights you’re going to go vacant, or you’re going to have to drop your rates down at the last possible minute and lose out on potential earnings there as well. So it’s really, really common, frankly, for me to see people that are managing properties, investing in properties and are leaving 1000s, if not 10s of 1000s of dollars per year on the table, just from not having the best pricing strategy. And I specifically want to talk about two tools, because there’s one that I recommend using when you’re first starting out. And there’s another one that I recommend when you’re a little more advanced. Now I know a lot of you guys have probably heard about pricing automation, software’s things like beyond pricing, we’ll have some price labs. And although these tools can be really great, they can also be really detrimental if you don’t know what you’re doing. What I like to use as an analogy for people when they’re starting out and ask him about these tools is imagine that I gave you a Formula One racecar. Now, if you’re a really good driver, in other words, if you have the skills to use that tool really well, then you’re gonna go faster and further than you could otherwise. But if you don’t, if you don’t have those skills, if you’re not a great driver, what’s going to happen is you’re going to crash and burn. And so the same thing that the same principle applies here, if you don’t actually know how to use a pricing software, then it’s not going to work out well for you, it’s going to let you crash and burn. And there is one pricing tool that I prefer over the other ones. But even still, I don’t prefer it for pricing optimization, I prefer it for pricing automation, a lot of these tools will promise you the world that they’ll just increase your bookings. And you can set it and forget it and do nothing about it. And you really don’t want to buy into that hype, because it’s not really true, it’s not really accurate, the software is only going to be as good as the person using it. And so we’re going to talk about that in more detail. But to start with, I want to show you guys my target occupancy rate tracking spreadsheet, this is the tool that we always recommend starting with. And this is a tool that I personally use for a bunch of our listing still, that we don’t even have over under price labs yet. Because this tool just consistently delivers results. And when you get it dialled in, and you get it using it, it really only takes about five to 15 minutes per week to manage the pricing. For a given listing, it’s really not a huge amount of time, it’s just about making the right changes at the right time. And so we come in here every single week. And you’ve got basically a few things going on in this tool here. So it’ll tell you the range of days into the future. So how far out we’re looking right between 91 and 180 days here 61 to 90 days 31 to 60 days out in the future, and tells us what our target occupancy rate is for that period. But this is a target of the occupancy rate. So not to be confused and thinking that, hey, within 90 To 91 to 180 days, we should be at 10% for every given month. Well that’s not true, because for some months, if it’s a low season, you know, your end goal isn’t 100% occupancy, your end goal might be 5060 70% occupancy, if it’s a slow month. So this is telling us that we shouldn’t be at 10% of that goal by 91 to 180 days in the future. Now, this will vary sometimes depending on the property you have. And you can adjust these dynamically and have a pull through the rest of the spreadsheet. So that’s the way that section up there works. And then you’ve got each month of the year out. You’ve got your seasonal occupancy rate, which is again what I was referring to low season versus high season, what’s the actual target that you’re aiming at. Now you’ll want to grab this data from a source like air DNA that’s gonna tell you exactly what the top performers in your market are performing. So now it’s a common misconception that the goal is 100% occupancy rate that is absolutely not true for most properties. Some smaller properties and urban centres the goal might be 100% occupancy, especially in certain months of the year. And in high season. For larger properties. Your goal might be 100% occupancy, but more frequently, your your target that you’re aiming for is actually going to be closer to 50 to 70, maybe 80 or 90% occupancy rate. And if you are hitting 100% occupancy probably means that you’re underpricing your property. And so really what we want to do is not just optimise our occupancy rate and get that as high as possible. We want to maximise the balance between our occupancy rate and our nightly rate. That gives us the highest overall revenue. Again, I always tell people if I’m going to make 100,000 $1,000 a year on a property, I would rather have it booked one single night for $100,000 and have every night booked evenly to make that $100,000. Now that’s obviously a really extreme example. That’s not the way it’s really going to play out. But that just gives you an idea of Yeah, wouldn’t it be way better to make the same amount of money with a lower occupancy where you’re gonna have fewer turnovers, less expense related to those turnovers, you’re gonna have less to deal with less guests communication, all that other stuff. So the goal is optimising revenue, not just maximising the the overall occupancy rate. And so these are our targets, and then it just tells us, okay, well, you know, for right now, for, for the month, wherever we’re at, which tells us exactly how many days we should have booked and how we’re doing relative to that. So this is where you manually input in this column, the number of days you actually have booked. And this tells you the number of days remaining until it just auto calculates the difference between January 23. This one’s obviously I need to update this to say, 2024, for example, and tell us we’ve got 180 days remaining, between now today and January 31 2024. Right. And so the goal for January is that we have a 70% 70% occupancy rate, right. And so in reality we have, we have a goal of getting 22 of our 31 nights in January actually booked up, that’s where we want to end, right, that’s the end goal. And so right now, per this, we should only be at 10% of that right now. So it means that we should only have two nights booked in January right now. And so you can see here that because I have an input here that I’ve actually got 15 Nights booked. This is just an example that I’m using. It tells me I’m way overbooked, so I’ve got to raise up my rates. Now if I put this in at two, it tells me I’m actually on track, I’m looking good, leave it as it is. Whereas if I put this in at zero, it’s going to say, Oh, I’m under booked by two. So maybe you want to lower your rates. Again, it’s not super significant. So you can see it’s not deep red telling you to for sure lower your rates. But it is telling you, you know what, you’re maybe going to want to consider lowering rates. Now, generally, you’ll want to have rules of thumb for what percentages to adjust things by for us, we use this maybe as a sign to lower rates by 5%. And then we use the the stronger when it says raise rates or says says lower rates, we use that as a rule of thumb to increase or decrease rates by 10%. So again, we’re going in there each week and doing this on a weekly basis. And sometimes those amounts are going to fluctuate. But this is just a really, really good way to know on a month by month basis out into the future 612 months, exactly how well you’re doing relative to how well you should be doing and if you’re on pace or not. And then it just tells you straight up exactly what actions to take. Now, again, it’s super hard to take all that information and actually run it in your head, which is why we built this spreadsheet that allows us to do these calculations, and allows us to know exactly what to do, right. And so that’s a really, really great tool for two reasons. Guys just want to take a quick break here to say that for those of you watching, who want to build cashflow, and long term wealth by purchasing Airbnb and short term rental properties, there’s a link in the description right down below for a free training that will walk you through my exact strategy for investing successfully in Airbnb ease. Now, if you’re not ready to actually buy properties, and you want to get started managing other people’s properties on Airbnb the same way I got started and build a full time income managing other people’s properties. There’s actually another free training linked in the description down below as well, there’ll be a really great fit for you. So whether you want to invest in short term rental properties and actually build amazing cash flow and long term wealth by acquiring the assets, buying the properties themselves, or you’re looking to earn a full time income managing other people’s properties on Airbnb, we’ve got some awesome trainings that are linked in the description down below, that will definitely help you out. When you sign up for the trainings, we’re also going to send you a few other tools and resources completely for free just to help you get started. Again, the links to sign up are in the description down below. And both trainings and all the tools are completely free. So make sure to register for the trainings, links in the description down below.

One, it’s accurate, it just tells you what to do. It’s nice and simple, but to is it allows you to really start to understand as you use the tool, how pricing works and how you optimise pricing, what you’ll notice is that when you lower those rates a bit, you’ll start getting booked up and you’ll be on track. And then you might get overbooked a little bit and need to increase your rates. And you’ve started to see that relationship where you want to be fine tuning and dialling in your pricing and not just lowering it all the time because you’re not getting booked up, but actually increasing it months in advance because you see that you’re overbooked from where you should be. And so by understanding that over a number of months or even a year or so at the property, you start to get a really, really good feel for how the market works for how pricing should be fluctuating and that’s what’s going to lead You’d be able to use a tool like price labs really, really effectively. So over here in price labs, what this does is it basically just automates that process, which, if you’re doing it using that tool, it should only be taking you maybe five to 15 minutes per week to manage the pricing for one property. So that’s why it’s really not super high leverage to use a tool like price labs right off the bat, especially if you don’t know how to use it properly, because you’re really only going to be saving yourself maybe five to 15 minutes per week. Now, the added benefit of price Labs is that if it is set up properly, and that’s a big, if that depends on your ability to actually understand and use the software properly. If it’s set up properly, then there’s a lot more dynamics that you can adjust with price labs that you just wouldn’t be able to adjust on your own. It can update pricing by the minute, right, as opposed to by the week, which is really nice. It can also it can also just control when you should drop your minimum night stay, things like that. So there’s more variables that factor in, they’re going to help you to maximise your overall revenue more effectively than you could using it and manual pricing tool. So I will say this is more effective, but we’re talking about a marginal gain over what you would be doing using a manual pricing strategy that is really well dialled in. But again, it really is contingent on you actually understanding and knowing how to use the software as well as possible, which is why I always recommend starting out with something like the target occupancy rate tracking spreadsheet. Now, what’s cool here is that you can actually see a whole bunch of different stuff. So you can see here that one of the things we configure when we’re starting out with price Labs is a base price. And then reason we have to do that is so that we can basically tell this software for a given property, exactly what base to adjust off of, because it doesn’t have any the qualitative information about how nice our property is, some of those amenities that we have how well photographed it is. And so that base price we’re going to get from having our own experience, if you just said this, and you said it incorrectly, then frankly, you’re going to be giving this software really garbage information. And when you put garbage in, you get garbage out, you’re gonna get bad pricing, because they’re taking your input of that base price and adjusting off of that. But if that’s wrong, everything is wrong. So you can start to see why it’s super important to understand pricing and understand your baselines, things like that before just jumping in and using one of these tools. Now you can also add a whole bunch of different customizations for dropping the minimum night stay. So for example, and Faro bookings, we like to have a minimum night stay of three, maybe four, maybe even five nights on some properties. But then as we get closer and closer and those days are still on booked, we may want to decrease our minimum night stay down two, three or two nights, we generally don’t go down to one unless it’s a really small specific property. But we might want to decrease that minimum night stay requirement so that we get access to more demand. Because obviously if your property can be booked by people looking for two nights, days and three nights days, that’s more overall people than just people looking for three nights days. Make sense, that’s something you can do. Now what’s also really cool about price Labs is that you can also go and just see exactly how your competitors are doing at any given time and see how your pricing it compares to the rest of the market. So you can see exactly what percentile you’re falling in how well you’re doing. And one of the things I really really love is being able to scroll down here, look at our competitor competitors calendars. And so what it allows you to do is just specify individual competitors in your market that are very similar to yours, you can go and cherry pick the listings you want to see there and even see how your listing is doing compared to theirs, what your listing got booked out compared to theirs, if your listing is booked for times when there’s aren’t or theirs are booked for times when yours aren’t. So you can see that our listing here has an opening on this weekend here. And then that wasn’t accounted for that wasn’t an open date for a lot of other properties. So you can see we kind of missed the ball on that one. So you can just start to see all these things. Now. You’re never going to be perfect. It’s not like you’re going to you’re going to optimise things you can see that, you know, even for me these ninth, 10th and 11th. I don’t know if that’s a weekend or not. So I think all of our weekends and August are booked for this property, but you’re not aiming for perfection, you’re aiming to get as close to it as possible. Even me I still make mistakes from time to time on pricing. But a software like this is going to allow you to make a lot fewer misses and a lot more hits. Now there’s other cool functionality in here as well like being able to see specific amenities and what the performance of those amenities is like how actually desirable a sauna is compared to an Evie charger compared to other things. So you can see what percentage of other properties in the market have those amenities? And what percentage of those are actually getting booked. So that’s a really cool useful feature of price labs to be able to actually quantify Is it worthwhile to get that amount and you spend the money on that you can look at your your calendar, you can see the amount of demand in total for every given day or weekend of the year. And so you can see all these different things become super, super helpful. So yeah, that was a Wednesday, Thursday, Friday that you can see in my calendars on book where for a lot of my competitors, those nights actually got booked up. And so again, all this data super, super helpful. But as you can imagine, it’s a lot, it’s relatively overwhelming if you’re just getting started. And I can tell you from my own experience, that it’s just not going to get you good results. If you don’t know how to use it, that overwhelm is going to take over, you’re not actually going to be able to use this software to its greatest capacity, which is why again, like I said, we still to this day, use this target occupancy rate tracking spreadsheet for a few of our properties that are newer, we’re still getting used to the pricing and the nuance movement for them on price Labs is a relatively new software that we’ve only been using for about six months now. So we’re still really working on dialling it in and getting it performing super super well. Because again, it really isn’t that complicated. A tool like this can get you 95% of the way there, as long as you know how to use it the right way. Like anything, the tool is only as good as the person using it. I hope this helps if you want to get access to working with us and using tools like this, then make sure you check out the links in the description down below. We’ve got free trainings where we’re going to hand out some of these tools. And if you decide that you want to work with us, then we can obviously share these tools with you guys and help you to optimise the performance of your properties, whether you’re managing properties or investing in property so links for all that down the description down below for our trainings to get you started on that. All that being said, I hope you got value from this training. I hope you got value from this video I should say and that you really enjoyed everything that went went through and you know that you walk away with some helpful information. If you did, please take a half a second and just hit the like button on this video to show your support and show that you liked the video. And if you are new here and you’re not yet subscribed to the channel, make sure that you hit the subscribe button as well to stay up to date with the two new videos we post every single week. With all that said, thanks so much for watching, and I’ll see you in the next video.