today let's increase your revenue by teaching you a valuable correlation
between your occupancy and your nightly rate let's jump right in all right
welcome back Airbnb family so this is a really fun video about an extremely
valuable concept that you need to understand and I think a lot of you are
getting backwards it has been embedded in some previous pricing strategy videos
which a lot of you are on this channel to learn how to price your listing and
make more money so the problem with showing you this concept is the calendar
visualizing this in a calendar is not so easy so I'm going to do something for
you here I'm gonna visualize your listing calendar as a timeline okay
this is kind of important so I'm gonna use some colors we're gonna use green
for bookings blue for views and purple for missed opportunities because you're
missing some opportunities get it okay so there's a few things you need to know
this timeline represents let's put tea for today that's today
these are weekly increments this is a month and a half and further up now the
bottom will be views okay when somebody's searching for you
this would be if they viewed you or could not view you and let's say that
this is one listing you get like an average amount of views of the say 150
views per month this is a metric and up here will be your bookings okay so a lot
of you know my pricing strategy is to take whatever Airbnb recommends you
should charge and raise at about 35 or 40 percent to give you room to do a
monthly discount that's a good idea now you should also have a weekend price
to prevent people from booking like one weekend night and ruining your calendar
which we'll get into a little bit more detail also so rule number one whatever
your nightly rate is if you have 100 percent occupancy which means if you
have no bookings then you should equal 100 percent of your price right you are
not giving discounts if your calendar is completely open and this might scare you
let's say aside from like slash pricing which let's say it's like these are the
three days before arrival I lower my rates like Priceline would
right for last-minute bookings that's one thing that I do do but all of this
open real estate here you're not going to drop your price on that all right if
your prices if your prices are listed properly you won't have to discount this
open calendar is actually good for you and we're going to show you why now so
this 150 views that you get they have to have the availability your your listing
has to have the availability in order for somebody to see your calendar so for
example let's say somebody is going to view for a week they're looking for a
booking check in this day check out that day you have to be at 100% available
during this time so if somebody wants to you know say booked for about a month
you have to have all these dates available right somebody's coming into
booked couple days here these are all views to look at your listing that could
convert to a booking and then let's say that this person here decided a book and
this becomes a booking okay so now that you have a booking here if somebody
wanted to know check in today and leave a week from now that becomes a missed
opportunity you don't even get the view because you don't have the availability
these days to host them so you don't pop up in the search right so this 150
average views per month takes into consideration the fact that you're not
available some days there's more searches than 150 what you're getting
views based on searches so the way the conversion works is that there's a total
number of searches in your area you show up you have impressions so you're not
going to get an impression on this which means you could not get the view right
so we'll do a future video on converting from impressions to views because that's
important to you but this is about getting your impressions and assuming
that a certain percentage are views so now if you get another booking in the
future here say somebody books for these dates then
if anybody is searching for any period of time here like a view this length
this length or this like you're not going to pop up any of these times
because you cannot accommodate those specific dates 100% of the time so
because of this your calendar is no longer 100% open because you have these
two bookings which means you're not going to get as many views which means
you need to convert a higher percent of the people who see your listing
so if you're going to get the rest of your calendar filled up like especially
let's say you have this happen right so now you've got a three-day stay
here you now have what looks like to be a three-day opening here and a two-day
opening here and you have a one-day opening here and then you have
availability like that these dates are fine right these are far away and
they're open right you there's not really an issue if you have a weekly
discount and somebody books for a week here they'll still get that weekly
discount so there's no need to really lower your rate but this two day the
three day and the one day you your your weekly and monthly discounts aren't
valid anymore people can't book for a month or we can get those discounts so
your price should actually lower these dates because two big reasons one is a
monthly or weekly discount is not possible so the rate that you were happy
getting with that monthly discount you can lower by roughly that percentage so
if you have two days open here and your monthly discounts 30% you can lower your
rate 30% here now if it gets to be within a certain window of time this
these dates are compromised because the only way you're going to get a view is
if somebody searches for one or two days in that exact date range if somebody
wanted to do this search that search is suddenly not possible is it this one is
too long for anybody to see these two available days that becomes that get it
so you will get less views on what we call orphan two days so lower your
nightly rate by the percentage of discount you were willing to give them
anyway in order to start to get these lit these booked but when you get into
some sort of crucial period of time and on my research it looks about three
weekends out so when you that's roughly 16 to 21 days out based on what day of
the week it is when you cross that 16 to 21 day threshold you should start
lowering based on the fact that an orphan day has less time to get booked
because since it's going to get less views than normal this monthly amount
150 views combined by a cop calendar your you might get 20 you might
get 30 views in the next 14 days and you need to convert one of those in order to
get booked otherwise you're not going to get the booking you have it you probably
have a cleaning fee in this as well so now if you're trying to get $90 a night
you lowered it 30% you're at $65 a night plus your cleaning fee a two night
booking would be 130 plus your cleaning fee you get like 130 like 160 hundred
and seventy dollars for those two nights well take it to here
you're lowering your rate even more so that's 65 a night you could drop it to
like 55 57 a night here I'm dropping it 35 a night day of Plus my cleaning fee
so I'm collecting $75 for a studio $70 for studio maybe $85 for a studio or one
bedroom last minute including my cleaning fee so that way I get 100%
booked because that's what it takes to get booked last minute because there's
gonna be very few views left so with that said if you want to be able to do
something like that you also have to have a lower cleaning cost than some of
your competitors which means you hire your cleaners in-house and that's
another video as well which we've talked about if you you can just go back in the
channel we talked about housekeepers so review if you have open space you have a
big price because you can take this booking down here this big blue ones the
one you want the moment that these green lines these bookings happen in your
calendar the spaces in between become harder to book and it's normally not a
problem like out here but the moment it becomes last-minute because you're
getting less views you need to convert a higher percentage of your views into
sales so lower your prices on your orphan days because you're going to get
more purple lines instead of blue yes color coding is fun so if you have any
questions about this feel free to leave it in the comments we're going to do
more pricing strategy videos in the future and of course we're going to have
a big huge course with a gigantic pricing strategy section that'll allow
you to manage multiple listings enterprise level stuff too if you have a
lot of listings you're going to want to see it I get so excited shooting these
videos for you that I forget to do one key thing that I think every other
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consists of all rentals rental arbitrage so if you want to talk to me one on one
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very specific issues one on one i do provide coaching help you solve some of
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