Setting the correct Base Price for your listing is one of the keys to maximizing revenue. Once the right Base Price is set, we can appropriately apply factors that change nightly demand, such as seasonality, day of week and local events, to help you increase your revenue! We define 'Base Price', as the average price you would charge for your listing. We will go above your base price in periods of high demand and below your base price in periods of low demand. Think of the base price as the true market value for your listing. You could have two identical listings except for the fact that one has a pool. The one with the pool would have a higher base price.
If you're an experienced host or owner, this might simply be the average price you've been getting bookings at over the course of the year. For example, if you charge $200 per night in the summer and $150 in the winter, your average price (and thus your base price) would be roughly $175. If you have a weekday and a weekend price, it would be the average of those two prices.
If you're a new host and you don't have any bookings yet, simply use the nearby listings tab and find a few listings that are similar in quality and that have a health score of above 70. We recommend setting your Base Price and then increasing your last minute discounts to help get some bookings in the immediate short term and start building those all important 5 star reviews.
Once you’ve determined what you think your initial base price will be, you’ll want to see what effect this has on your pricing throughout the year. Let’s take a look at a listing and see what impact changing the Base Price has on our suggested pricing. For our listing in Orlando right by Disney World we can see that with a Base Price of $120 our suggested price for May 22nd is $173. This is a combination of our Base Price of $120, taking away $8 for seasonality, adding $48 for memorial day weekend and adding $13 because it is a Friday. If we increase our Base Price to $150, for example, our suggested price for that day is now $216, made up of the Base Price of $150, a $10 decrease for seasonality, a $60 increase for memorial day and a $16 increase because it is a Friday.
We recommend setting your Base Price in the Chart view tab for your listing. Here you can easily see the impact that changing the Base Price has on every day for the next year. We recommend setting a Base Price that emulates what you have been doing with your pricing but generally goes a bit higher during periods of high demand and lower during periods of low demand.
So now that you have a good starting Base Price, the next step is to watch how well your property books at this Base Price to help you determine if you need to adjust it. The majority of users will not have the same base price they’ve started with after a few months.
In monitoring your listing, if you received several bookings in a week, this is a good indication that you are underpriced and you need to increase your Base Price. If you haven’t received any bookings in the last week, this is a good indication that you are overpriced and you need to decrease your Base Price.
Your Health Score is a quick and easy way to help you determine whether your listing is booking too quickly, too slowly, or just right. To learn more check out our video How to use your Health Score.
We recommend checking your listing weekly and making adjustments in 5 to 10% increments. That way, you’re not doing anything drastic to your pricing and you can incrementally hone in on the right Base Price for your listing.
If you have any questions about setting your Base Price please feel free to reach out to us at support@beyondpricing.com.
0 Comments