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. In terms of 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.
1. The first step is to select the size of the listings that you consider to your competitors. This means that even though your listing has 2 bedrooms, it might still be competing with 1-3 bedroom listings in your area, so in this case, this would result in the selection below.
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!
2. The second step is looking at the distribution of the prices of the competition in your area and deciding how to position your listing. The "Median Price", 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.
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.
3. 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 seasonal prices in the low and high season for the listings in question. Note that these low/high seasonal 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).
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.
Recommended Base Price
If you have used PriceLabs for 60 days or longer, you will probably see a "Recommended Base Price" in the Base Price Help. This recommendation is based on 3 factors:
- Your listing's occupancy
- Your listing's past base prices
- How your listing has been performing with respect to the market
This recommendation is updated regularly, and can be consulted as a way of reviewing your Base Price from time to time.
Obs: base price recommendations aren't currently available if the listing has recently used Seasonal Base Prices or for certain markets.
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.
Q: PriceLabs recommended a base price when I started using it, is Base Price Help still relevant?
A: Yes! PriceLabs recommends a base price based on your listings' historical occupancy and prices automatically when you first start using dynamic pricing. This recommended base price is often different from what you might get using Base Price Help, because Base Price Help looks at market data instead of your own data. With that in mind, there are a few times when using Base Price Help to help adjust your base price is especially helpful:
- You've added a new listing to your portfolio. In this case, the historical occupancy and prices aren't that relevant, so it makes sense to use market data.
- You are re-evaluating your base price. The automatic base price recommendation only happens once: when you first review prices for a listing in PriceLabs. After this point, Base Price Help can help you evaluate base price by comparing your prices to the market's.
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 initially, and then every couple of months to make sure you are not under or above the market considerably.
- 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 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 of 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.