Setting the right price for your Airbnb or short-term rental is one of the most important decisions you’ll make as a host. Pricing too high can leave your calendar empty. Pricing too low means leaving money on the table. A thoughtful short-term rental pricing strategy helps you balance occupancy with revenue, attract guests consistently, and make the most of market trends.
In this article, we’ll walk through the most effective pricing approaches used by successful hosts, including dynamic pricing for Airbnb, seasonal adjustments, discount tactics, and long-stay incentives.
What Makes a Good Pricing Strategy for Airbnb?
At its core, a good pricing strategy helps you sell your nights at the best possible rate throughout the year. The best pricing approaches consider demand patterns, local events, and travel seasons, and adjust rates accordingly.
Using an automated dynamic pricing tool or adopting manual adjustments based on market conditions are both viable ways to achieve this. Dynamic pricing tools analyze demand, competitor pricing, and seasonal trends to automatically update nightly rates helping you stay competitive and maximize revenue without daily manual effort.
1. Implement Dynamic Pricing to Match Market Demand
Dynamic pricing is often the backbone of a successful pricing strategy. Rather than setting a static nightly rate, dynamic pricing adjusts prices in real time based on variables like availability, seasonality, local events, and competitor rates.
Here’s how it works:
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During periods of high demand like holidays, peak travel seasons, or major local events rates are increased to capture more revenue.
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During slower demand periods, prices drop slightly to keep occupancy steady.
This flexible approach helps ensure that you aren’t losing bookings by setting prices too high in slow periods or missing revenue by keeping prices too low when demand is strong.
2. Adjust Rates for Seasonality and Local Events
Every market has its “high” and “low” seasons. If your property is near a beach, demand likely peaks in summer. In ski resort towns, winter is the busiest season. Understanding these patterns allows you to create seasonal pricing tiers that reflect real demand.
You can also boost rates during local events like concerts, festivals, or sports tournaments. Adjusting prices around these dates helps you capture event-driven demand and earn more per night.
3. Use Weekend and Weekday Differentials
Demand often changes throughout the week with weekends typically booking faster than weekdays. Setting higher rates for Fridays and Saturdays and slightly lower rates for Sunday through Thursday can help you balance occupancy with revenue.
Dynamic pricing tools and channel managers can automate these adjustments, so you don’t have to manually update your calendar.
4. Offer Strategic Discounts to Fill Vacancies
Empty nights generate no income, so strategically offering discounts can be a smart move:
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Last-minute discounts: Reduce rates for dates within the next few days to encourage spontaneous bookings.
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Gap night pricing: Offer slightly lower rates for single vacant nights between bookings so you avoid scattered openings in your calendar.
These small adjustments can help you keep your calendar fuller without undermining your overall pricing strategy.
5. Incentivize Longer Stays
Longer bookings reduce turnover, meaning fewer cleaning days and lower operational costs. Offering length-of-stay discounts for weekly or monthly stays encourages guests to book extended stays, stabilizes your revenue, and is particularly effective during slower seasons.
Typical patterns include:
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Weekly discounts of 10-15%
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Monthly discounts of 20-30%
These incentives attract remote workers, families, and travelers planning extended visits, helping you reduce vacancy and increase total revenue over time.
6. Monitor Competitor Rates and Market Trends
Even with automation, keeping an eye on how similar properties are priced helps you stay competitive. Tools like PriceLabs, Beyond Pricing, and Wheelhouse use sophisticated algorithms, but manual check-ins allow you to catch local nuances and respond swiftly.
Track occupancy trends, special event calendars, and shifts in local travel patterns so you can adjust your pricing strategy accordingly.
7. Balance Occupancy and Revenue
The goal isn’t simply to get as many bookings as possible it’s to maximize revenue. Sometimes reducing prices slightly to fill slow periods can help your listing appear more often in search results, building occupancy momentum and improving your overall ranking on Airbnb.
Conversely, if your calendar is consistently full, raising average nightly rates can increase total revenue without sacrificing occupancy.
Conclusion:
Crafting a thoughtful pricing strategy for your short-term rental is more than just setting competitive rates. It’s about understanding your market, leveraging smart tools, and reacting to demand in real time. Combining dynamic pricing, seasonal adjustments, discount incentives, and rate monitoring allows you to maximize revenue consistently and grow your short-term rental business year after year.
If you want help implementing these strategies or setting up pricing automation for your properties, ElevateSTR can support you with professional optimization and revenue management services tailored to your market.
