How to price your Airbnb, step by step

Step 1: start from real comparables

The right price is not the one you would like to get, nor that of a neighbour with a house twice the size. It is the price at which comparable homes actually book near you.

Open Airbnb as a guest would, with the dates you are aiming at and the right number of guests, and search your area. Keep the listings that resemble yours on what matters to a traveller:

• the type of place (entire home, room, cottage, studio) and the capacity
• the number of bedrooms and beds
• the location (centre, seaside, countryside) and rare assets: pool, view, garden, parking
• the standard of finish and the average rating

Note down 8 to 10 listings, look at the nightly price for the same date and, above all, which ones are booked. A full calendar at that price is the sign that the price is accepted, whereas an empty listing at €120 proves nothing. Use the median rather than the average, so one luxury listing does not pull you up.

Step 2: set a base price, a floor and a ceiling

Three figures are enough to begin.

• The base price: the price of an ordinary night, off season, midweek, taken from your comparables.
• The floor: the price below which you would rather not rent. Work it out from your cost per night (cleaning you do not pass on, laundry, bills, wear) and the minimum margin you accept.
• The ceiling: the price above which, even on the busiest night, you risk putting guests off. It stops an event or an automatic rule from running away with your rate.

The floor protects your margin and the ceiling protects your reputation. Set them before you play with variations: everything that follows happens between these two limits.

Step 3: vary the price by season, weekday and events

One price all year round is almost always the wrong price: too high in the low season, too low in the high season.

Seasons

Look month by month at how your comparables behave: when are they full, when do they cut prices? Apply a multiplier to your base price for each period (higher in summer, lower in January, for example). School holidays and public holidays matter as much as the weather.

Days of the week

In many areas, Friday and Saturday sell for more than the rest of the week. In others, near a business district for instance, it is the opposite. Check on your comparables: the calendar shows which nights go first.

Events

A festival, a trade fair, a marathon, a match: the nights around it sell faster and higher. Spot them early in your town's and the tourist office's calendars, and raise the price before travellers start searching. Do not push past your ceiling, though.

Step 4: allow for the lead time before arrival

The price of one night should not be the same three months ahead and two days ahead. A distant night can stay at full price: there is time to find a guest. A night two days away that is still empty earns nothing if it is not rented that evening, and usually deserves a cut, down to your floor.

Airbnb also offers last-minute and early-bird discounts in its pricing settings. Use them sparingly and check the final price a guest would see for a typical stay: it should stay above your floor.

Step 5: set the minimum stay, the cleaning fee and the discounts

Minimum stay

A 3-night minimum protects you from too many changeovers, but it blocks the small gaps in your calendar: a single night between two bookings can no longer be sold. Raise the minimum in high season and on busy weekends, and lower it in low season and for isolated nights. Airbnb lets you customise the minimum stay by check-in day.

Cleaning fee

The cleaning fee is paid once per stay, whatever its length. Base it on what you actually pay for cleaning and laundry rather than treating it as hidden profit: a guest comparing two listings looks at the total. A very high fee on a one-night booking puts people off, and a fee that is too low on a long stay loses you money.

Weekly and monthly discounts

Airbnb lets you discount stays of a week (7 nights or more) and a month (28 nights or more). It is worth it if you have gaps to fill, and you should calculate it against your costs: a long stay needs less cleaning per night, which justifies part of the discount.

Common mistakes

• Never changing the price after going live, while the market moves every week.
• Copying a neighbour's price without checking that it really books.
• Cutting too fast after two quiet weeks: the photos, the title or the minimum stay may be the cause, not the price.
• Forgetting weekends and school holidays, which leaves a midweek price on your busiest nights.
• Turning on several discounts (weekly, monthly, last-minute, promotion) without checking the final price a guest sees.
• A rigid minimum stay all year, which loses you the isolated nights.
• Fixating on your starting price rather than on occupancy and revenue per available night.

To check whether any of these applies to you, the free diagnostic compares your Airbnb listing with similar ones around you (about a minute, result on screen).

When to move to dynamic pricing

By hand, the method above works, but it takes time: reading the comparables, checking the events calendar, adjusting each night's price, then starting again next week. For a single listing in a quiet area, a check every couple of weeks is often enough.

Dynamic pricing becomes useful when:

• your area changes quickly (a marked season, events, a tourist town)
• you have several listings to follow
• you forget to update prices when the calendar fills up or empties
• you want the same price on Airbnb and Booking.com without entering it twice

Airbnb also offers its own smart pricing tool. It overrides any rules you have set, and it is up to you whether to use it.

Clear Conscience does this work for €39 per listing per month, excluding VAT: every week, we read the prices and calendars of listings like yours around you, the price of each night follows from that and is sent to Airbnb, Booking.com and your direct booking page. You set the minimum and maximum price, and the standard rate never leaves that range. More on the dynamic pricing page.