The Ultimate Pricing Guide for First Time Airbnb Hosts

This guide will assist you in creating a pricing strategy for your Airbnb listing

One of the many questions that people ask themselves when they first start hosting their property on Airbnb is the pricing. 

While it's tempting to jack the price to the highest amount, that is likely to cause people to turn yours down immediately and choose a competitor instead. But lowering the rate too much could cause you to lose out on far more.

Hosting can help supplement your finances, but that's if you managed to set up a proper pricing strategy. There are several factors you need to consider when it comes to setting up your pricing strategy. 

For example, how much are you planning to charge during specific holidays? Or what about the rates between a weekday stay compared to a weekend stay?

It can be tricky to get your Airbnb pricing strategy correctly, and you’ll discover that every host has their own approach when it comes to maximizing their earnings. For this post, we have put together a guide that shall assist you in creating a pricing strategy suitable for your needs. 

Things to consider when framing your price


The type of property you are listing on Airbnb plays a crucial role in your pricing. Airbnb permits you to list many types of properties.

You can list anything from a city apartment to an island on the site. However, you need to ensure that the price you establish aligns with the type of property you are listing. Take the time to research the rates of similar properties around your location.

Generic apartment buildings may need a much lower pricing range compared to luxury ones, which can be priced slightly higher. Keep in mind that guests are only willing to pay more when you offer them something truly special.

Airbnb does provide suggestions on a base price, but those prices are not always 100% accurate. You may need to spend some time comparing competitive listings to ensure your price is reasonable.


Before you can establish a price for your Airbnb listing, you need to conduct a study on your location. The research should entail the standardized rental pricing of your location.

You need to discover if there are any demand rates for your particular area. Some cities may only be in demand during specific seasons, while others may be in demand throughout the year. During the seasonal days, you want to check similar listings like yours. Use the average price per night and price your rental accordingly.

Another thing you want to consider is the uniqueness behind your location. If your property is based at a charming location that offers a unique experience to the guest, your price range can certainly increase a bit higher than others. 

Whereas, if your property is based among the everyday hustle of a city, you may need a more balanced price.


When you are deciding on your pricing, consider the amenities being provided to the guest. If you are going beyond the basics then your property can have a higher rate. Plus, guests are usually alright with paying more in exchange for these amenities.

Of course, they need to be something worthwhile and not just a smaller number of amenities.

For example, let's say your property is a luxurious residential home. You may be offering plenty of amenities, such as a hot tub, swimming pool, or a jaw-dropping view. If that's the case, then your pricing should be far higher. 

Therefore, if you are offering a high-quality service, you can try to maximize your rates, otherwise, you need a lower price range.


Guests these days have an assortment of locations they can choose from. Unless your location is particularly unique, these guests are going to be able to book with other listings found in your area. Every customer spends enough time comparing and considering several listings before making a final decision.

If you want to ensure that guests choose your property instead of a competitor, you need to offer them something better. To remain ahead of your competition, you should frequently conduct competitor analysis to study their pricing strategies. 

If you are offering less value than your competitors for the same price, those potential guests are more likely to book with them over you.

However, if you manage to set your pricing according to them and offer the same or even more benefits, your booking numbers should rise accordingly. You need to ensure that your pricing strategy can make you stand out from the rest of the competition, not hidden away.

Another thing to consider is the number of competitors you are dealing with in your area. If you have a significantly sizable amount of competitors in your location, then providing a balanced price range may be your best bet in dealing with the aggressive competition. You can potentially increase your price range if you are dealing with fewer competitors.

Target audience

Another factor that plays a crucial role in your pricing strategy is the type of people booking your listing. If your target audience are backpackers and you are setting a high price range, you are likely to receive fewer bookings.

On the other hand, if you were to target people on a family vacation, then setting your pricing a bit higher may help increase your profits. Another thing to consider is if you are charging for a long-term rental instead of a short-term rental.

Cleaning fee

Cleaning fees are one of the additional expenses that most Airbnb hosts prefer to charge their guests. The cleaning fee is usually used to pay off for the cleaning services required during and after the stay. There are both pros and cons to charging your guests a cleaning fee. 

For one thing, it ensures your cleaning expenses are covered and encourages your guests to treat your property with care. On the other hand, it can also cause some guests to turn down your listing. 

That decision all comes down to several factors, such as the type of property you are listing, the cleaning service you hire, and your target audience. If you plan to charge a cleaning fee, make sure to let your potential guests know about it on your listing. If not, they will leave a negative review on your listing because of hidden costs.

Extra guest charge

At times, a guest may book the property for themselves but then invite someone else onto the property to stay with them. While some hosts are okay with that, others tend to charge for these extra guests. It’s up to you if you want to charge an additional guest fee. However, you need to consider the type of property you are listing and decide if you want to charge your guest a fee for the extra person or not. 

Again, remain transparent with your guest to prevent any miscommunication with them. Make sure you let them know if you are charging an extra guest fee on your Airbnb listening.

Security deposit

The purpose of a security deposit is to cover any future damages done to your property by the booked guest. Charging your guests for a security deposit ensures they are careful with your property since they will have to for any damages they cause. 

It’s a smart move to be covered and protected by charging your guests a security deposit, but it’s not something that attracts guests.

Some guests may see a security deposit as a deal-breaker since it suggests that you do not have to trust in them. You need to consider the pros and cons of adding this to your pricing, along with how much you're planning to charge for the security deposit. Remember to mention the security deposit on your listing if you decide to charge guests for it.


Discounts can serve as an excellent way to promote your property. They are beneficial for spreading through word of mouth and can result in higher amounts of bookings. You can offer special discounts which can include things like weekly discounts, monthly discounts and so forth. If your property relies on seasonal bookings, these discounts can serve as an excellent solution during these slower seasons.

Plus, you can use these discounts to persuade your guest to remain for a more extended period. However, you need to carefully consider the percentage of discount since you don’t want to lose out on a profit.

Airbnb pricing strategies

Now that you have an idea of what you should consider. Let’s go over several pricing strategies you can use to optimize your pricing.

Maximum Fill-rate strategy

For this particular strategy to work, you need to play along with your competitor's pricing strategy. It requires you to offer the best possible experience in your location. The goal is to ensure the maximum occupancy rate. That means you need to offer far more value than your competitors in your region. 

The nightly costs shall be less than the average, but your income remains stable. Essentially, you want to get the maximum in terms of filling your rentals. 

This strategy is excellent for Airbnb hosts who are capable of spending full time managing their Airbnb and Businesses such as vacation rental management companies. Individual hosts can also take advantage of it.

Maximum rate per night strategy

For this strategy, you need to set a high rate for nightly chargers. Using this strategy ensures you receive a higher net profit from individual bookings. Your bookings will be lower, but the income you receive is sufficient.

The goal here is to ensure maximum profit with the least amount of effort. If you decide to implement this strategy, then your fill rate is much lower, but you will have to deal with fewer guests.

Long-term rentals strategy

Another name that this strategy goes by in the Airbnb hosting community is lazy hosting. It essentially relies on the premise that you are hosting your property for a more extended period. Keep in mind that you are renting it out at a monthly rate and dealing with the same guest for a long while.

Using this strategy requires you to work more on the promotion of your listing, but management is lowered to a degree. It also helps minimize any potential risk in highly regulated areas.

Balanced Airbnb strategy

This strategy targets the earning of maximum revenue by combining all of the previously mentioned strategies. For this strategy to work, you need to adopt a flexible approach. It‘s crucial that you are constantly changing your pricing strategy depending on the demand and seasonality of your location.

For example, during the season with low demands, you could rely on a longer-term rental strategy to lower the chances of vacancy. The seasons with higher demand enable you to use either the maximum fill rate or the maximum nightly charge to receive a better profit.

Pricing management

There are several varying ways you can manage your pricing. Here are your options. 

Manual pricing

This option means that you are in charge of changing the prices based on your personal feelings and experience. You do get some advantages with these options, especially if you are an experienced host. While you get total control over your pricing, it does take up a lot of time and may not be entirely accurate. That is something you need to consider when deciding on your option.

Airbnb smart pricing

Airbnb has provided a smart pricing feature that enables you to set up the minimum and maximum pricing. Essentially, Airbnb is researching on your behalf and provides you with suggestions regarding the prices that may benefit you. In the end, it all comes down to you needing to figure out which price helps you get the best value. Additionally, Airbnb has claimed that this feature does take into account the demand, seasonality, and other factors of your property.


Some people would prefer to have someone else do the research and manage the challenging parts for them. You could always outsource your price range to another company, like our very own Topkey. Our team of experts manually researches the competition in your area and devises the best possible pricing strategy. That way, you’ll be earning far more than your competition. 


The price you decide on will severely impact the success of your Airbnb listing. If you have a rate that doesn't suit the place you are selling, it could be detrimental for your business. You must consider everything if you wish to ensure your property earns a profit.  If you are interested in getting help with our pricing strategy, check out our services.

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