By relying on dynamic pricing automation, Airbnb hosts can leave the math to the tool and focus more on providing exceptional guest experiences.
Running a successful Airbnb business requires you to employ several skills simultaneously. So, it’s no wonder many real estate investors opt for automation pricing tools to give them a helping hand.
Table of Contents
- What Is Dynamic Pricing?
- What Aspects of Your Airbnb Can Be Automated?
- Why Should Airbnb Hosts Automate Dynamic Pricing?
- What’s the Best Tool for Airbnb Dynamic Pricing Automation?
- Ways to Make Your Airbnb More Attractive
Dynamic pricing is a strategy that relies on making your prices flexible instead of fixed. In the real estate business, it can be extremely important and not to mention helpful. It basically makes it possible for Airbnb hosts to adjust their pricing according to the real estate market’s current trends and maintain a successful business.
On that note, relying on such a tool can be a great way to streamline your day-to-day responsibilities as a host and still generate profit.
With the changing nature of the US housing market, the majority of investors are putting their trust in automation tools—and for a good reason.
Whether you are starting in Airbnb or looking for a tool that will help you manage your business, this is the guide for you. Continue reading, and learn more about dynamic pricing automation tools, why they are important, and which is the best on the market.
What Is Dynamic Pricing?
Also referred to as “smart pricing,” dynamic pricing Airbnb is a strategy that implies replacing fixed prices with flexible ones. Simply put, the built-in pricing tool works by analyzing Airbnb data and other relevant factors to come up with an appropriate final price.
It’s important to note that there are several types of dynamic pricing. Here are the two crucial ones:
Competitive pricing is based on setting the price according to the competitors’ prices. It is beneficial primarily because people are becoming hyper-aware of the changes in price. They’re likely to check several options before deciding on the one that works for them.
Next, there’s the so-called time-based pricing. Unlike the previous one, the time-based strategy relies on changing prices based on seasonality. It is something that you’ll usually see in tourism. For instance, the prices of tickets and hotel stays tend to be higher during the holidays.
As you could’ve guessed, dynamic pricing’s become quite a game-changer across several industries. It lets brands, companies, and real estate investors adjust their pricing quickly, remain competitive, and ensure more profit.
As for real estate, especially in Airbnb, a dynamic pricing tool is considered priceless.
With US borders reopening after the COVID-19 pandemic, making it possible for tourism to thrive, international travelers booked an Airbnb in more than 7,500 destinations in the US from November 2021 to September 2022.
Needless to say, Airbnb is a profitable business. But with so much competition—especially in urban areas—you always need to be one step ahead.
Related: Where Can You Find Airbnb Properties for Sale?
What Aspects of Your Airbnb Can Be Automated?
Generally speaking, dynamic pricing tools were developed to automate different aspects of your Airbnb investment property. With that in mind, here are the main elements that can be automated to make your rental business more efficient:
The most important aspect—especially with Airbnb—is nightly pricing.
If you disregard other Airbnbs in your proximity and set your per-night rate too high, chances are that your Airbnb won’t receive many bookings during the season.
Then again, if you set the price too low compared to other hosts, you will get more bookings, but you probably won’t be able to generate much profit.
You need to find the middle ground and set your price so it’s not too high or too low. And Airbnb dynamic pricing tools help you do just that.
Set the price properly by analyzing relevant metrics, including your competitors. That way, you can attract potential guests and contribute to the longevity of your Airbnb.
The effort you put into your Airbnb will definitely contribute to its overall success. However, one other crucial aspect you need to consider here is communication with your guests.
Every professional Airbnb host knows that open communication can help establish long-term relationships with guests. However, devoting your attention to every guest who shows interest in your Airbnb can be time-consuming.
According to hospitable.com, replying to messages before, during, and after the stay can take 75% of your time—which is too much in such a fast-paced business. That’s why many hosts opt for dynamic automation when it comes to message templates that anticipate the questions of their guests.
Check-Ins & Check-Outs
If you don’t live near the Airbnb rental property, going to the location for something as simple as a key exchange can be quite a hassle for you as the host. It gets even more challenging if Airbnb isn’t your primary source of income.
Another automation tool that helps investors streamline their responsibilities and make their jobs easier and more pleasant is check-in and check-out automation.
By relying on so-called smart locks, you will save considerable time that you would otherwise spend going back and forth between multiple vacation rentals.
Plus, they are convenient and contribute to the overall security of your Airbnb.
If you’ve been successful in running an Airbnb business in an urban area, you can likely no longer keep track of the exact number of guests that pass through your rental property.
Logically, your Airbnb needs to be spotless for the next guest, which means more frequent cleaning. Going to your Airbnb to clean the property can take quite some time. So, it might be time to consider automating your Airbnb cleaning.
Most hosts nowadays rely on automatic scheduling and payments that facilitate working with cleaning companies. Incorporating the said tools into your rental business can contribute to a spotless interior and exterior, greater time efficiency, and higher booking rates.
Why Should Airbnb Hosts Automate Dynamic Pricing?
There are plenty of reasons why Airbnb hosts should rely on dynamic pricing tools to help them streamline their earnings.
Here are the three most noteworthy advantages of a dynamic pricing strategy:
1. Maximizing Revenue
The first advantage of Airbnb dynamic pricing is that it directly influences your revenue.
Dynamic pricing tools will analyze numerous market variables to determine the best possible pricing solution for your Airbnb property. The tools will consider the booking rate, the average price per night, popularity, and many more to give you the ideal solution.
2. Optimizing Occupancy Rate
By calculating the above-mentioned variables, dynamic pricing tools directly contribute to a higher occupancy rate, as well. Their goal is to determine a price that’s the most “attractive” to potential guests, which can raise more interest and secure more bookings.
Regarding vacation rental properties, the optimal occupancy rate you should aim to achieve is around 65%.
3. Saving Time
Airbnb dynamic pricing tools are “number one” among real estate investors because they are time-efficient.
You need to take many different factors into account when trying to analyze and choose the best price for your Airbnb. And it would take forever if you were doing it the old-fashioned way.
With smart pricing tools, however, calculating and assessing your Airbnb’s price can be done within minutes. And as we already mentioned, if it isn’t your primary source of income, you could probably use the extra time.
Related: All You Need to Know About Short Term Rental Property Management
What’s the Best Tool for Airbnb Dynamic Pricing Automation?
Investors not updating their rates regularly are basically leaving money on the table.
With the real estate market trends changing as fast as they do and the growing demand for Airbnb becoming more apparent to investors, it is hard to deny the need for Airbnb dynamic pricing tools.
Such tools essentially serve as a “shortcut” to your Airbnb’s success and a more profitable pricing strategy.
Thanks to advanced property management systems and the data used by the tools, real estate investors are presented with the most profitable pricing solutions.
Mashvisor’s Dynamic Pricing Tool
In a sea of dynamic pricing tools, Mashvisor’s Dynamic Pricing tool for Airbnb vacation rentals stands out.
Our tool employs artificial intelligence and machine-learning algorithms to analyze a wide range of real estate data thoroughly. The goal is to help investors make well-calculated, informed decisions regarding the optimal price for their rental property.
For starters, Mashvisor’s dynamic pricing tool allows hosts to connect their Airbnb accounts and set their rates easily. In other words, hosts who manage multiple Airbnbs will not need to switch between them; all the necessary information will be available in one place.
Our dynamic pricing tool also helps the host decide on the most profitable rental strategy for their Airbnb. Hosts can customize the settings of our automation tool to increase occupancy rates. The feature comes in handy, especially during the off-season, when hosts may find it harder to manage their property and maintain bookings.
Last but not least, Mashvisor’s dynamic pricing tool lets the host oversee how their rental is performing. Hosts get a complete insight into their rental’s performance and that of others, as well as their income-earning potential.
That’s just scratching the surface regarding the opportunities that Mashvisor offers to prospective investors and hosts. The platform pushes the boundaries of investing and assists prospective real estate investors and hosts achieve all their goals.
Sign up for a 7-day free trial of Mashvisor now to get the best of the platform.
Ways to Make Your Airbnb More Attractive
Chances are you are not the only Airbnb host in your area—and as you might’ve guessed, the competition is fierce.
Guests expect the very best from your vacation rental, and it is up to you, as a host, to meet their expectations, right? After all, impressing your guests and making sure that they have a pleasant stay is what keeps you in business.
That’s not always easy, but the good news is that there’s still plenty that can be done without going overboard and breaking the budget.
With that said, here are our three key tips for making your Airbnb more attractive to potential guests:
1. Invest in High-Quality Photos
Photos sell a potential experience; that is particularly true when it comes to vacation rentals. Apart from deciding on the optimal price, investing in high-quality photos will be of great help when attracting guests.
Keep in mind that when searching for a place to stay, guests tend to go through every part of their future accommodation to see what it looks like. Therefore, the higher the quality of your pictures, the easier it is for guests to get an idea of what awaits them when they check in.
You want to capture some prominent parts of your Airbnb that exude aesthetics, quality, and comfort. So, if your Airbnb comes with a spacious yard with a pool or garden, remember to include them in your listing, as well.
2. Be Accurate
People interested in staying in your Airbnb will want to know as much as possible about the property before booking. It is your duty, as a host, to answer all their questions without them even asking.
How is it possible?
Be as accurate and straightforward as possible in the description. It should cover everything from amenities, check-in and check-out times, and potential requirements to any other details to help them find their way in the area.
And most importantly, be honest.
Do not provide incorrect information or mention amenities that are not there just to make the property sound more luxurious. It will only create a counter-effect, and your guests will be disappointed the moment they arrive in your Airbnb.
3. Offer Family or Pet-Friendly Additions
Depending on your target group of guests, they can show special interest if you offer family or pet-friendly additions.
For instance, if your Airbnb destination attracts families with kids, you might want to invest in kitchen equipment and utensils to make preparing meals easier and more time-efficient. And on a similar note, chairs for babies and toddlers can be a huge plus, too.
On the other hand, if you make your Airbnb pet-friendly, you can surprise guests who will be bringing their pets by making food bowls, toys, and pet beds available at the property.
Related: How to Find a Market With a High Rental Rate
We’ve successfully concluded the topic of dynamic pricing automation tools and their significance in the Airbnb industry. Let’s wrap up this article by going over some key points we’ve mentioned so far.
If there’s one thing you should take away from this guide, it’s that dynamic pricing is an excellent way for investors to streamline their earnings.
Dynamic pricing automation tools work according to the principle of analyzing market trends and data and helping investors put an optimal price on their rental property. The advantages of the said pricing tools are numerous. They help the host maximize revenue, boost occupancy rates, and save time.
Pricing is not the only aspect of Airbnb that can be automated, though. You can do the same with communication, cleaning services, and check-in and check-out, to name a few.
Mashvisor’s Dynamic Pricing tool for Airbnb vacation rentals provides many useful features. It allows the investor to check the performance of their Airbnb property, create joint accounts for multiple Airbnbs, and implement the pricing strategy that works best for them.
Mashvisor’s tools strive to help real estate investors in their journey from beginning to end. Our tools can help you develop a successful strategy, manage your property better, and generate more profit.
Make an appointment with one of Mashvisor’s Product Managers and learn more about the features and possibilities that our tools offer. Schedule a demo today.