Setting the right nightly rate for your property is crucial to maximising your property's rental earnings.
The majority of hosts set prices based on the nightly rates of similar nearby properties, however, there are many other strategies that can be employed to make your pricing strategy smarter and more sophisticated.
At MadeComfy, we have a dedicated team that uses internal, Airbnb and external data to create a dynamic pricing strategy for our portfolio of properties. Watch the video below for an introduction to our Sydney-based pricing team.
In this video, Gina and Vincent from the MadeComfy pricing team outline the key steps we take when finding the right balance between occupancy and nightly rate so that homeowners can make the most out of their investment property on the short-term rental market.
Step-by-step pricing strategy
- Analyse local property performance - The baseline pricing is set by conducting research on how similar nearby short-term rentals are priced . The pricing team does this by accessing a comprehensive database of active and historical bookings on Airbnb and other short-term rental platforms, which enables them to get an in-depth understanding of the local market.Source: AirDNA
- Account for amenities and special features - In addition to understanding the market data, knowing the property and the needs of the guests are of paramount importance. Therefore, the next factors that the team looks at are amenities and special features guests are willing to pay a higher rate for based on the accommodation surveys regularly conducted by MadeComfy.
For example, our survey data has shown if a property is situated in Brisbane, but is not equipped with an air-conditioner, guests are less likely to book the property and this must be factored into its pricing. Alternatively, if a property is located in Victoria, heating is one of the top amenities that will have a bigger impact in the colder months.
To ensure that an Airbnb attracts more bookings, it is crucial that all of the essential amenities are ready. Furthermore, premium features such as views, pools, balconies and secure parking can be highly sought after depending on the target market of the accommodation.
- Identify seasonal demands and key dates - Once the guests' needs and wants are identified, seasonal demand data for the market is analysed and key events and periods when nightly rates shift significantly are flagged.
Across most markets in Australia, summer is the peak season, but the level of demand differs depending on the type of property and target guest markets. Properties catering to families with children are popular during school holidays while properties targeting solo travellers or couples see demand spikes around events or special occasions.
These events can occur at different dates each year, so the team is vigilant to stay on top of key calendar dates that allow them to raise prices according to demand. Additionally, metropolitan areas are popular for business travellers and Sydney and Melbourne CBD markets often run out of supply throughout February and November, making these months the best time to maximise profit on your CBD rentals.
Low season pricing tips
All markets suffer from seasonal fluctuations and if you are a host new to the short-term rental market then adjusting your expectations for winter months is critical.
Acting before your competitors and proactively lowering your prices, flexing restrictions and offering specials to secure bookings on your calendar is the top priority during low seasons.
Property owners should also focus on occupancy instead of nightly rates, to ensure that costs are covered while profits are maximised during shoulder and high seasons.
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What differentiates MadeComfy from other companies in the industry?
- Dynamic pricing - Dynamic pricing is the process of adjusting the nightly rate of short-term rental listings using different variables such as the demand and supply of short-term rentals; allowing us to maximise homeowners’ revenue. This process of Airbnb management requires vast amounts of data and market expertise. At MadeComfy, we’re sure to deliver what you need - and so much more.
- MadeComfy Dashboard - Your property is your biggest asset so we make our rental management process as transparent as possible for our property owners. With the MadeComfy Dashboard, you can do so when and where you need it.
- view your property’s booking details
- block out the calendar to stay at the property
- get an overview of your property’s short-term rental performance vs the market
- Tech-driven operations process - We use the latest technologies to streamline the operations process so that all of ~10,000 monthly guests in Sydney, Melbourne, Brisbane, Gold Coast, Sunshine Coast and Canberra are managed efficiently. This includes having digital checklists for the housekeeping team, tracking quality of our cleaning service and reporting housekeeping and maintenance issues in real-time.
Ask an Airbnb expert: want more information about short-term rental in Australia? Submit your question to the MadeComfy team below.