Keep the same price on your short-term rental every day? Knowing these 3 Airbnb Demand Drivers could increase your revenue by 40% or more. Seriously.
Back before Get Paid For Your Pad was born, I wanted to optimize pricing when I was in University. When I started hosting, I realized how much I was missing out on by keeping the same price.
On this week's episode of GPFYP, I talked with Andrew Kitchell, CEO of Wheelhouse and Lyric. Wheelhouse is an awesome pricing tool that I use to track the trends in my market and optimize revenue!
Andrew says there are three key demand drivers that impact EVERY market:
To maximize your revenue, adjust your prices according to these demand factors.
It's actually pretty simple once you get the hang of it. In this post, I'll cover some of the cool hacks Andrew shares.
The short term rental industry is still new, but seasonal demand has been easy to predict. However, post-COVID could be another story.
In general, the weather is a decent indicator of what seasonal demand will be in most markets.
Hosting in a ski town? Well, you have a clear picture of seasonal demand. People head down when the snow is falling!
Here's your hack for seasonal demand:
Use a tool like weatherspark.com. Fill in the name of your city and look at the “tourism score.” You'll get a picture of when tourists come to town based on the weather.
It's not a perfect tool, but it's free and it works.
If you want something more powerful (and still FREE), you need to try Wheelhouse. Andrew is even offering 50% off the full software with code PAD (just for you guys).
With Wheelhouse, you can check out actual occupancy data, and adjust prices in real time. They analyze a ton of data so you don't have to!
Next up on our list of Airbnb Demand Drivers is daily demand. Again, this is different than it was pre-COVID.
Do you notice the demand in your market change based on what day it is? It's great if you notice, but that's not enough. Even if you know, it can be hard to adjust pricing.
Let's look at the ‘Google Flight' hack from the Revenue Management expert himself:
Now take a look at flight prices. On the days that flight prices are high, demand for accommodation tends to be high as well.
You can use this data to make “day-of-week” price adjustments for your short-term rentals.
Of course, this isn't 100% accurate, but it's better to have some data than no data.
If you really want to get this right, then you should check out the actual occupancy data in your city. Wheelhouse has the data and the automation for your Airbnb pricing.
We will end our discussion on Airbnb Demand Drivers with my favorite – local events. Get local events right, and you'll be a happy host!
I remember when I first started using automated pricing tools. It was September, and the automation tool doubled my price. It turns out there was a convention for doctors nearby. From then on, I let the algorithm do its thing.
And here's a super easy and FREE way to optimize Airbnb pricing for local events:
Boom, there you go. I bet there are a few events planned that you didn't know of.
Set a calendar reminder for every Sunday (a suggestion from Andrew himself) so you stay up to date.
Obviously, there are not a lot of events now. But, the moment events are back, you want to know about them.
Checking on these demand drivers can definitely take a lot of time. However, you should focus on these Airbnb Demand Drivers if you want to optimize your pricing.
The key takeaway from my talk with Andrew was this – don't keep the same price every night.
If you choose not to use the free tools, that's okay! But if you're interested in an intelligent pricing software that leverages more than 10 billion data points to help your listings earn 10-40% more… Wheelhouse should be your next stop.
On the podcast, Andrew extended an exclusive offer to our readers. Head over to usewheelhouse.com and enter code ‘PAD' to get 50% off your first month.
Let me know how your revenue changes once you started pricing based on these Airbnb Demand Drivers!