Setting your base price
What is the base price?
- Base price is the average rate you would charge across the year.
- We use the base price as a starting price and apply all market factors, demand patterns, and customizations on top of this.
- The base price includes the quality of your listing. So, if a two-bedroom has high-end luxury décor, it will have a higher base price than a basic two-bedroom.
Base Price Help
The Base Price Help tool helps you determine a good starting point for your listing's base price, using market data. This tool analyzes a few hundred listings nearest to yours, and the results can be filtered by the number of bedrooms to match your competition.
To start using the Base Price Help tool, look in your dashboard for the link highlighted in the screenshot below.
Picking up your base price
1. Recommended base price:
- If the listing has been synchronizing prices in PriceLabs for at least 10 days, we'll recommend a base price based on the performance of the listing in respect to its market, the listing's occupancy, and it's past base prices.
Note: There are some rare cases where we do not show a Recommended Base Price even though the listing has been synchronizing prices for 10 days or longer. This currently happens for a few booking patterns, which will be covered in an upcoming update.
- Seasonal Base Price: In case the listing uses a seasonal base price, we recommend a percentage change to the base price instead of giving an absolute value. In this case, the percentage change will be shown in the blue card below, with the reasons of this recommendation.
2. Imported base price:
- If the listing is newly imported, we do not recommend a base price directly. Instead, we show an 'imported' option, based on the prices that the listing had before Pricelabs. This may or may not be a good estimate, so for almost all users we recommend setting the base price based on the market data, instead of the listing's own previous data.
- New listing, but own prices are inconsistent: If the listing's previous prices do not make sense, we do not show the “Imported” option for base price.
3. Market Based:
Set your base price based on the market data.
- Market Level: Select the price level you want your listing to be positioned, namely Low, Medium and High which correspond to 25th, 50th and 75th percentile prices.
The "Medium level" is often a good starting point, but other factors might justify a higher or lower price. For example, if your listing is new, and does not have any reviews yet, it might make sense to set your price below the median to attract more guests. On the other hand, if your listings is very high-end, it could be safely priced above the median.
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Bedroom Categories: Select the bedroom categories to fine tune the market data used to calculate the market based price. S elect the size of the listings that you consider to your competitors. On some cases, even though a listing has 2 bedrooms, it might still be competing with 1-3 bedroom listings in its area.
It is recommended to select a set of bedroom categories with a good number of listings (at least 30). Otherwise, there isn't enough data to draw a good conclusion about the market trends. Experiment with different bedroom categories to get an idea of how the price distribution changes!
4. Custom base price:
Click on the 'Custom' button to manually input a base price.
Market percentile calculator
This indicator shows in what percentile of the selected market, the new selected base price will be. The market is affected by both bedroom category selection and map selection. For market-based this will always be 25th, 50th, 75th, but for recommended and custom it will show what percentile it will lie in.
How was this price calculated?
In the blue card below, we give reasons, and show how these reasons impact the price (on a scale of 1 to 3). For example – if for any given reason we suggest increasing the price, we show it by green upwards pyramids (1 to 3 pyramids depending on how much we increase it by). For a decrease, we use red downwards pyramids.
Market Map
The map shows the listings considered for the market based base-price and for the percentile calculator. The square shows the user's listing. Hovering over a listing will show average price, the bedroom count and the listing ID. The listings are colored based on the price.
Fine-tuning the market area
- You can fine tune the market area considered to calculate the market-based values and percentile calculator by selecting an area on the map.
Seasonality Graph
The last step is reviewing your selected base price before confirming it. To help confirm the impact of the base price selection, you can review what will be the average monthly prices across the year. Note that these averages are there as a reference only - the final recommended prices during high and low seasons might differ substantially from these due to customizations (such as Far-out Premium) and market effects (such as Demand Factor).
Other things to consider:
- Do not overthink the decision as you start. Use something and refine it over time. Several factors in our algorithm auto adjust rates up or down based on your listings' performance.
- Revisit the base price every couple of weeks, and then every couple of months to make sure you are not under or above the market considerably.
- If you've been using a base price for more than a few weeks, and want to make an adjustment, opt for small incremental changes (5-10%) from your current base price over time rather than a large one-time change. This helps to determine the impact on your revenue safely.
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Before confirming the base price, also consider your listing's own occupancy. In general, if your occupancy is low, it's not a good idea to increase from the current base price. Conversely, if your occupancy is already very high, it's probably not necessary to decrease your base price.
- Once you have set up your base price, click “Save & Refresh,” then head to the neighborhood data tab, filter for your bedroom size, and then see how your prices compare to other listings in your neighborhood. Adjust the base price up or down to fluctuate within the 25-75th percentile depending on desirability of the listing.
- If you are not setting any additional mark-up for Airbnb Host fee or any other OTA service fees, the base price includes service fee. So keep in mind that your net payout would be a little lower.
- Also, when thinking about base price, do not include taxes, those are usually charged above your nightly rate.
- Do consider entering minimum and maximum prices for your listing(s). While all the calculations to determine your daily rates are made on your base price, the min and max prices act as stopping points. Setting minimum and maximum prices ensure your rates don't drop too low or spike too high.
Frequently Asked Questions
Q:
Base Price Help is suggesting that my base price is already slightly below the median market price, but I am not getting any bookings. Should I increase my base price?
A: In general, no. Base Price Help is only considering market prices, which is a good starting point, but what really matters in the end is maximizing your listing's revenue. For example, during periods of very low demand, it might make sense to market your listing below the market median.
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