3 Immediate Ways to Increase Your Airbnb Profits
Every Airbnb rental has some growing pains in the beginning. How do you market it? Who is the ideal guest? What amenities should be included and how much should you invest in its “experience”? Branding takes time to pin down. In the meantime, here are a few (almost) immediate, zero-effort ways to steer you toward higher margins and increased profits on your bookings.
Shoot for profits, not occupancy
Experienced Airbnb hosts are well aware that maximum bookings don’t always lead to maximum profits. Your rental may seem like an obvious success if it’s booked months in advance — and maybe your Airbnb is that spectacular and it does offer an unmatched experience. But probably not. It’s probably underpriced. Your affordable one-day rentals with same-day cleaning may signal hot property to you, but you’re losing hundreds or even thousands of dollars with constant cleaning, maintenance and administrative oversight. Slow down, raise your prices. With less booking turnover there are fewer cleaning costs, less wear and tear, and lower utility bills. A few days of vacancy can be compensated for if prices are raised across the board. Also, some vacancy will help your online visibility when guests are searching for a place to stay.
And in the same vein…
Create a minimum stay
We’ve stressed the importance of instituting Airbnb nightly minimums before. If your cleaning costs are undercutting the profits of your booking by more than 25 percent, increase the minimum stay until you’re safely out of that margin.
Many hosts try to recoup the percentage Airbnb takes by revealing super-high cleaning fees at checkout, but we think that’s a lousy user experience for the guest who thought they were getting a great nightly deal. Creating a minimum stay will help you avoid the tiny transactional sniping between yourself, the guest, and Airbnb when you’re working with larger numbers.
Customize your pricing
Everyone is familiar with rideshare surge pricing or weekend pricing on Airbnb. And although it definitely pays to stay on top of seasonal and holiday demand, there’s still a world of information that you (or any human for that matter) couldn’t keep up with, including minor fluctuations in the rental market, local hotel occupancy, special events and conferences in the area, general demand that week, etc. Pricing algorithms like Wheelhouse or Beyond Pricing can be a real game changer in this respect, extracting extra profits from every booking. Better living through machine learning!