My life as an Airbnb Host What I've learned from hosting and how I make money using Airbnb

Is now the time to increase your airbnb prices? and Should you aim for Business guests?

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It spring in London and the nights are getting longer and my airbnb is busy. Despite covid still being an issue in the travel industry the number of visitors from abroad has increased. The other thing that has increased is my prices. For the first time in nearly 10 years of being an airbnb host I believe I am seeing some real increase in prices. When I started airbnb hosting I charged £20 per night for each private room listing. At the beginning I saw this as the cheap price to lure my early customers, undercutting my rivals for a while. I fully expected the price to increase to about £25 per night within a year or two at most. Five years down the line I was still charging £20 and my completion at that price was still high. I nearly believed prices would never increase.

Should you use Airbnb Smart Pricing for your listings?

I have been using airbnb smart pricing for some years now. The major reason why I used it to start off with was because I had the feeling if I didn’t it this would negatively effect my airbnb rankings. When platforms like airbnb launch a new tool or gadget or something then they want you to use it. Its not hard to see that airbnb might promote those listings using the pricing tools they have spent so much time and effort putting in place. So to keep my listings up there with the best of them I opted to use the smart pricing. I did however find it almost less than useless. The Airbnb Smart Pricing tool seemed to always price my listings at the my lowest possible price no matter what. Very rarely did I see the price go up on with the level of demand. Also the suggested minimum price the ‘smart pricing’ tool suggested for me was so low as to be ridiculous (bear in mind I live in central London where space is at a premium).

The Airbnb Start Pricing tool suggests very low prices. This price is well below cost.

 

But I must now say that the smart pricing has shown some value. Perhaps after many years of disappointment its finally working its magic. Recently I have seen the smart pricing get me some good extra income even if its only been a few extra pounds per night. Since many people have now started to return to the city after working from home for 2 years there has been a bit of a spike in demand.

How to increase your airbnb prices without losing customers

If you are renting out a buy-to-let or similar type of investment property once in a while you should ask yourself “Should I put my rents up?”. Its not as easy to answer question as you might think. Obviously you want to make more money but you do run the risk of losing a good tenant. Market rents will go up and down but in the last 10 years have moved more sideways. The thing I have found is that if you DON’T put rents up every year then you fall into the trap of eventually having to put rents up TOO MUCH. What I mean is that the the time comes to finally put up the rent the increase you have to make seems like too big a jump. So for example instead of putting up the rent by say 2% every year you just leave it as there same; then 5 years down the line you have to put it up 20% to bring the rent into line with the market. This might be a bit of a shock to the tenant and may appear your putting it up too much when all you’re really doing its brining the rent back in to line.

So how can you increase your prices without losing customers? First increase only a little bit at a time. Also try and make your price slightly lower than the round number. Like for example instead of £30 per night make it £29 which physiologically appears lower that it really is. Also make sure you have the right amount of positive reviews. I have nearly 2000 reviews so its not hard to believe my listing might be worth the price i’m asking.

Airbnb prices for guests have steadily increased over the years. But the increase mostly came from airbnb’s own fees and not from hosts putting up their prices. Hosts for the most part have seen no increase. My average payment from Airbnb was in the region of £20-21 per night however the amount the guest paid started from about £25 in 2014 to £29 in 2022. The increase all went to Airbnb not to me.

Should you aim to have regular guests travelling for business and work only?

Airbnb prices for guests have steadily increased over the years. But the increase mostly came from airbnb’s own fees and not from hosts putting up their prices. Hosts for the most part have seen no increase. My average payment from Airbnb was in the region of £20-21 per night however the amount the guest paid started from about £25 in 2014 to £29 in 2022. The increase all went to Airbnb not to me.

Now and in the past I have had a steady stream of regular guests at my listing. They come to London for work and want somewhere cheap and regular to stay. These types of guests tend to be slightly less fussy about location except that it must be near a tube station. For example they are not in town to see the tourist sites and care little for the local architecture or cool cafes. They want to be able to get to work without fuss and come home to somewhere nice but not extravagant to stay. Simplicity is maybe the best word. My airbnb listings do suit this type of customer well. My location is not particularly excellent. Newham is one of the poorest neighbourhoods in the UK never mind London. But it’s reasonably easy to get to the main areas of work in London (the square mile and Canary Wharf). And it’s also cheap. So it ticks boxes in that respect. But safety is also important to these types of guests. So I make sure guests can properly lock their doors and are as safe as I can make them. A business like attitude is also not a problem. They know I’m in this to make money and seem to not mind as long as i charge a fair price. They will also look past any minor issues as long as it doesn’t cause them to be late for work. There are no claims of “you ruined my holiday” or similar.

Advantages of guests who are staying for work/business purposes 

  1. Prefer to keep things simple. No frills is fine.
  2. Will most likely leave early in the day/arrive later in the evening (could suit a host who also works on a similar pattern)
  3. Usually less emotional about the listing. Unlikely to complain if small things are not perfect. Not having overly inflated expectations of fantastic views or hospitality.
  4. Might be willing to become regular customers
  5. Likely to be on their own with little luggage

Disadvantages of guests who are staying for work/business purposes 

  1. More price sensitive. Not willing to overspend.
  2. Need to be closer to transport links/parking
  3. Rural areas less likely to be in any demand

I do prefer regal guests who come only for work. They are more predictable and tend to be on their own – persons travelling by themselves tend to be more efficient and not have mountains of luggage, also don’t chat all night. Also I find regular business guests tend to know the drill and are can be largely left to their own devices.

About the author

richsaint18

Airbnb host and I live in London.

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