The Nightly Pricing Habits of Airbnb and HomeAway Hosts

The average Airbnb or HomeAway host operates without the benefit of the pricing tools or staff that hotels have to help contend with constantly adjusting rates.

Skift retrieved data from two startups, Smart Host and Beyond Pricing, which both help short-term rental hosts with dynamic pricing management, or guidance on how to price a property during different seasons and special events. The data collection shows examples of what’s happening with pricing and average daily rates at Airbnb and HomeAway in different cities. In the sampling of cities we looked at, average daily rates don’t appear to drastically change throughout the year.

These numbers represent a slice of what’s happening in these markets and only include active hosts with 60 or more bookings per year. For 12 global cities included in the data (see Beyond Pricing’s chart below), the average daily rate for winter months (December to March) and summer months (June to September) and vice versa for the southern hemisphere cities show there are few solid patterns to point to for how hosts price their properties.

Pricing variance is also a market by market scenario and gets determined by as many factors as there are short-term rentals and hotel rooms available. Business and leisure travel patterns ebb and flow sporadically around the world and the only influences that can crank up rates are special events like the Super Bowl, a papal visit, or bad weather from snow storms or hurricanes.

“We’ve seen vacation rentals that are similar to hotel rooms, like one-bedroom apartments or condos, follow similar pricing trends to one another,” said Evan Hammer, CEO of Smart Host. “One of the larger vacation rentals may be more expensive than a hotel room, but more guests can stay there. That means that the cost per guest can be far less expensive than a hotel room.”

“In urban areas, listings on Airbnb that are managed by an individual hosts seem to be less expensive because they don’t carry the occupancy taxes and fees that a hotel has. They’re not forced to collect the tax. However, we expect the fees for a vacation rental to be the same as hotels as local and state governments start to create policies to include these types of accommodations. But I think this is less true for traditional vacation rentals. I don’t think that those prices will be the same as hotels as they’re fundamentally different types of goods.”

HomeAway listings typically require longer minimum night stays on reservations, Hammer added. In Austin, Texas, for example, (see chart below) HomeAway’s average minimum night stay is two nights, while Airbnb’s average is one. The longer stay causes the price per night to be lower, but the overall transaction could be equal to or higher than with Airbnb.

“HomeAway traditionally carries more professional vacation rental managers on its marketplace than Airbnb does,” said Hammer. “There is a higher likelihood that the manager will have additional fees that could add up to a higher price for the traveler than with Airbnb and we’ve found both Airbnb and HomeAway sometimes have additional service fees on top of the advertised price. There’s also the local occupancy tax rates that a professional vacation rental manager is more likely to collect. Professional managers are offering a higher level of service than most individual Airbnb hosts and they’re often serving customers who expects more.”

“There are of course other questions at play that hosts consider, such as, ‘Is there a minimum price I’ll accept because I’m worried about the type of guest I’ll be renting to if I lower the price too much?'” Source: Smart Host

Source: Beyond Pricing