There are a lot of scammers and fake Airbnb gurus out there, so if you would allow me, before I dive into the tactics, to show you proof of how much money my Airbnb pricing strategy is making me. If you want the strategy, skip to Section 5: The Optimal Airbnb Pricing Strategy

Proof: My Airbnb Pricing Strategy Works

There are numerous gurus out there. They are much better at marketing than I am. Many of them pay me for private consultations. But none of them have the results I’m about to share with you.

Would you believe me if I told you that I’m earning $117,000 more than the previous owner of the Airbnb rental I purchased?

How about if I told you that I did it a second time with a new rental? I’m making $70,000 to the prior owner’s $32,000.

Let me show you.

Go to your Airbnb Insights Dashboard, (on the left side) click ‘Occupancy & rates’, then click ‘Occupancy rate’. Select one listing and change the dates to show 12 months. Here’s what you see in my dashboard.

However, a high occupancy is ONLY good if your nightly rate is also higher than similar listings. (By the way, my true occupancy is 94.5%. Airbnb does not include direct bookings.)

In the same dashboard, click ‘Nightly rate’.

I’m earning $149 more every night I’m rented, which is 27.9% more often than similar listings according to Airbnb.

My Airbnb pricing strategy can do the same thing for you, as it has already done for over 100 hosts I’m currently working with.

I’ve repeated these results for every Airbnb that I manage in various markets around the world for the past decade.

I’m going to share my pricing strategy with you. It takes me 30 seconds per week per listing. I attribute the extra income I make from the same property primarily to my optimized Airbnb pricing strategy.

Introduction to your author, Daniel Rusteen

I’m good with numbers. After all, in my prior life, I was a Certified Public Accountant working at Airbnb in 2013, managing billions of dollars every month.

I started a YouTube channel called “Optimize My Airbnb” in 2018.

A year later, I published a book for Airbnb hosts: Optimize YOUR Bnb. It has sold over 50,000 copies through word of mouth.

Today, I am (probably) Airbnb’s number one guest. I bounce around (over 200 markets), renting Airbnbs by the month. I’ve slept over 3,000 nights in an Airbnb since 2017.

I’ve been a Superhost since 2014, and I’m a part-time real estate investor with a 30% ROI, compared to an industry average of 10%.

I want to give you confidence in me and my Airbnb pricing strategy. I am not some Joe Schmoe who started hosting a year ago. I’m not an AI bot or virtual assistant writing on behalf of the business owner.

I am Danny, typing this right now in Miami, Florida (you’ll see my review on this Airbnb listing). Everything you see on this page, on this website, came from my brain or my hands.

I am a human with a world-class pricing strategy that has generated me over $1,000,000 in revenue since 2016 from the Airbnb properties I own and manage.

The 4 Types of Airbnb Hosts

When it comes to Airbnb pricing, I find there are three types of hosts.

The first charges one price all year round. You do not want to be here.

The second manually adjusts their calendar rates. Neither here.

The third uses Airbnb’s Smart Pricing. Definitely not here.

The fourth leverages a dynamic pricing tool algorithm. This is where you want to be.

Let me explain why you do not want to be the first three types of hosts and bring you a layer deeper when it comes to dynamic pricing.

I can prove to you that you do not want to charge a single rate throughout the year. When was the last time you booked a hotel? Did they charge the same rate on a Monday as they did for a Friday? No, of course not. They have a team of data scientists (literally) managing their occupancy and rates.

The reason why Monday and Friday have different prices is due to demand. Monday has less demand, and Friday has more.

This is a key concept: Each day of the week has a different demand, resulting in a different rate.

And, as we’ll learn soon, the demand for any particular date changes as soon as you start getting reservations.

The owner of the Airbnb I referenced above (actually, his property manager) was charging $500 every night of the year and getting only the weekends booked.

I charge as low as $250 midweek and over $1,000 on some weekends. I am increasing my occupancy by decreasing my midweek prices, and I am increasing my revenue by increasing rates on high-demand dates.

As for the second type of host, the one that manually changes their prices..when they remember. And that’s the flaw here. I personally know many hosts who do this. They think they’re experts in the market, and they may be, but they are also human and sometimes forget to lower rates for last-minute open nights or raise rates for far-out events that are just announced.

If you’re reading this blog or have any experience with Airbnb’s Smart Pricing, then you already know that whatever you set as your minimum rate, most of your dates will be at that rate. Airbnb’s preference is ‘heads in beds’ and not individual host revenue maximization.

The reason is that the Airbnb platform has many more listings than guests, so any given night, Airbnb loses its 15.5% service fee on the number of listings not rented.

I have one very important concept I must teach before we get into my pricing strategy, because if I don’t, then it’s like challenging someone to a foot race with a sprained ankle.

We must set ourselves up for success by ensuring our Airbnb business is in order from top to bottom before adjusting our pricing.

👉 Want to learn with me? Take a look at my Airbnb Pricing Power Hour created together with this blog post.

3 Steps to Troubleshoot ALL Airbnb Problems

All problems on Airbnb fall into one of three categories:

• Search Rank
• Reviews
• Pricing

I have developed a three-step troubleshooting protocol to address all three problems in order, ensuring you are operating at the highest level (ie, making the most money).

Have you ever wondered if your listing could be doing better? The protocol answers that important question.

Step One: Improve Your Online Listing

You must make sure that your listing is as different from your competition, in a good way, as possible.

That means your conversion rate is high on Airbnb. Here is my conversion rate.

That means that most FPGs (Future Potential Guests) who view your listing are also booking it.

My strategy here can be summarized as communicating as much information to the guest as quickly as possible.

This applies to the number of photos, the length of your captions, as well as the layout of your text.

The big three are title, text, and photos. Photos are further subdivided into quantity, first 5, layout, and captions. Photos are THE big part of the big three.

I want to focus on pricing, so I will link a video for you to watch later. However, it’s essential that you have your online listing fully optimized before addressing pricing.

Otherwise, it would be like driving a car without any tires. You could do it, but everyone agrees that it would be best to start by adding tires before driving.

From experience, I can say that even if you think you’re optimized, chances are that you are not. I have had too many consultations with hosts who say they are following my strategies, and I find block text or ‘cozy’ in the title or 40+ photos. I explain all this plus more in the video.

The first third of this video focuses exclusively on how to rank high and increase your conversion rate on Airbnb by optimizing your online listing.

Step Two: Offline Hospitality and Reviews

You’re probably not in the hospitality or customer service industries. Most Airbnb hosts aren’t. And even if you are, that doesn’t mean you like it or you’re good at it.

“The customer is always right” is a principle that holds true on Airbnb, to a level more intense than in any other industry. That’s because Airbnb has made the review system heavily weighted in favor of guests.

One bad review can affect your business for months and cost you thousands of dollars.

Here’s my scale on reviews:

5 stars or bust

4 stars is a grey zone. It’s neutral if you get it every 6 months or more, with dozens of 5-star reviews in between.

3 stars are bad and should be avoided.

2 stars is terrible and must be avoided.

1 star is apocalyptic and must be avoided at all costs.

So, how do we improve our hospitality? We do that through a variety of strategies. Again, this blog post focuses on pricing, but I will list a few places where you can learn more about how to obtain more 5-star reviews.

A messaging strategy is used to communicate the information the guest wants when they need it in conjunction with my “reservation flow” concept. This is important. So many hosts get this wrong. A proper messaging strategy can increase the number of reviewing guests. On Airbnb, approximately 60% of guests review their stay, but with an optimized messaging strategy, you can increase this to up to 90%.

A digital guidebook is free, and a hospitality strategy that answers guests’ questions without requiring them to wait for a response.

I have a concept called “The 10th Review”. Nowadays, it’s really the 5th review given that Airbnb guests have gotten worse and Airbnb seems to allow them to take advantage of the guest-friendly rules. Watch my video below to learn more.

Here is my co-host strategy. Think of it as good cop/bad cop. When a problem arises, you start new communication from the co-host account, taking responsibility, and addressing the guest’s issues. The guest wants to feel heard.

Negative reviews are the result of mismanaged expectations. I discuss this concept in both my books, but it’s exactly as it sounds. Guests have a certain expectation about checking in, about amenities, about cleanliness, and if anything changes, you must communicate to the guest, in advance, that they should change their expectations. Often this avoids further problems. Effective communication can resolve many guest complaints early.

The third step in my 3-step Airbnb troubleshooting protocol is pricing.

However, I remind you that you must have both your online listing and offline hosting in place before you proceed to pricing for maximum occupancy and nightly rates.

The Optimal Airbnb Pricing Strategy

Let’s review, because this is important:

• First, optimize your online listing with my strategies designed to increase your listing’s conversion rate and search rank on any short-term rental platform, including VRBO and Booking.com.
• Second, optimize your offline hosting as represented in your reviews. If you do not have a 4.95+, you have room for improvement. The reason we want a 4.95+ rating is to maximize our hospitality. We are not comparing ourselves with a listing at 4.75. They are not our competition.
• Third, we can maximally optimize our pricing strategy only when one and two are completed.

A quick disclaimer: my pricing strategy is optimal for Airbnb hosts with fewer than 15 listings. That’s the type of Airbnb host that I am, and that’s where I feel confident saying that my Airbnb pricing strategy is the best in the world.

I will teach it to you now. There is my overall rubric that you will learn, then you will apply it locally to your listing and to your market.

My pricing strategy is broken down into two steps. Step one is learning the basics, such as booking lead time, occupancy targets, minimum, and maximum prices. Step two is all about customizations.

Pricing is your ultimate edge. Your competition cannot copy it.

Booking Lead Time

The booking lead time, or BLT, indicates how many days in advance the average guest typically makes a reservation for your listing. The BLT is listing specific. And no dynamic pricing tools, including Airbnb’s Smart Pricing, consider this very important metric when suggesting your listing pricing.

The BLT is our hidden edge.

Let me show you one of my calendars, which has a one-night minimum.

My Airbnb pricing strategy is very powerful. It enables you to achieve market-high occupancy levels all year round. I’ve repeated my strategy in dozens of markets worldwide. I even offered revenue management services to select hosts at one point. They paid me for years to manage their calendar occupancy and nightly rates.

You can check your listing’s BLT in your Airbnb Insights Dashboard. Ensure you click on your specific listing and adjust the dates to display 4 months of data.

BLT is so important because it tells us when 50% of our reservations come in. BLT is unique in that it’s both a historical and a future data point. Let’s assume our BLT is 30 days. It was 30 days last month, and with a very high likelihood, it will be 30 days next month.

You should re-examine BLT once per year.

The BLT provides us with our first and most important occupancy target, another key concept in my Airbnb pricing strategy.

Occupancy Targets

Sticking with our example of a 30-day BLT, which tells us when half or 50% of our bookings come in, then we’d want to be booked at exactly 50% at 30 days into the future at all times.

Does that make sense? Let’s make sure. Pop quiz.

1. How much would we want to be booked at 7 days in the future?
2. How much would we want to be booked at 60 days in the future?

Answers

1. More than 50%
2. Less than 50%

If we want to be booked at 50% at 30 days out, then we want that occupancy to rise as days get closer. We want to book at 100% one day in the future at all times, right?

Your true occupancy with a BLT of 30 should be something like this:

• 100% at 1 day into the future
• ~75% at 15 days into the future
• 50% at 30 days into the future
• ~25% at 60 days into the future

The main booking target, the one we’ll be using to adjust our base price (explained soon), is at our BLT.

Another pop quiz, because I want to ensure you grasp this concept.

How would our booking target change if our BLT were:

• 11 days
• 33 days
• 187 days

Really, take a moment to come up with an answer.

Answer: Our new occupancy target at any BLT is always going to be 50% because our BLT tells us when 50% of the reservations are completed.

Two Airbnb Pricing Nuances

I have never publicly talked about this before because it’s an advanced topic better suited for live discussion, but I think you’re ready.

What I’ve said about the occupancy target is only true:

1. During high season, and
2. If you expect 90%+ occupancy

To understand why, let’s assume we’re in slow season or high season in your market only gets to 60% occupancy for the month. Take a look at this market with extreme seasonality:

If this is the case, then we need to adjust our occupancy target to half of our expected occupancy.

A few examples.

If our expected occupancy for the month is 60% (like July – September above) and our BLT is 30 days, then we want to be booked at one-half of that expected occupancy, or 30% at our BLT, or 30 days.

If you understand these concepts, you are now three layers deep into the Airbnb pricing game and well on your way to achieving market-best occupancies and nightly rates for every listing you own or manage.

No one takes pricing as seriously as me. No one has a better understanding of how the Airbnb platform works. And, I hope, no one explains pricing strategy better than me. However, if you have any doubts, please post your comment below.

If you feel like you want to join my community of Airbnb hosts perfecting our pricing every month together, I want you to consider joining my Airbnb Pricing Power Hour Club, where I price all my listings live on a Wednesday per month, answer questions live on the video call, and answer even more questions on my private forum available only to members.

👉 Stop guessing. Join my Airbnb Pricing Power Hour Club.

Back to the nuance.

How do you get market data? I love AllTheRooms Analytics for this reason because they have the most accurate data and because they allow you to see the differences by percentile.

Below, the solid line represents the market average occupancy for one year (35%). The dotted line above represents the 90th percentile (~90%).

From this data, we understand that our expected occupancy for January to March is only 70%, while for the rest of the months, it’s 95%.

Key point: My Airbnb pricing strategy enables us to average variable metrics, creating a simplified and optimized system that outperforms the market by 30% or more.

What this means is that I’m not looking at December and calculating a month occupancy of 82% and August at 97%. No, I’m smoothing out the variance. January to March = 70% and the rest is 100%.

That means my occupancy target for January to March at my BLT is..? For the rest of the year is..?

If you cannot answer this question, I want you to post a comment, reread the article, book a private call with me to get you up to speed, or join my pricing course.

Answer: The occupancy target at my BLT for January to March is 35% and 50% for the other months.

Minimum Price

The minimum price often trips up many hosts. It is not what you would like to charge, nor is it the base price. Instead, it is the price you would begrudgingly take if the alternative is no reservation.

More specifically, it will equal your fixed costs plus variable costs plus profit margin.

Your fixed costs are things you’ll pay regardless of the reservation, like mortgage, taxes, building or community dues, cable TV, and pool maintenance.

Your variable costs you only pay when you have a reservation, like utilities, consumables, and if you provide things like a welcome gift, breakfast, or airport transit.

Most listings have a fixed minimum price, which only comes into play during the L-times:

• low demand days
• low season
• last minute

Generally, your minimum price should be no more than half of your base price. That means if your base price is $225, then your minimum should be lower than $115.

I recently had a consultation with a host whose true minimum was $155, but she wanted to set it at $280 with a base price of $295. Ultimately, this is a personal decision, but this would not maximize the listing revenue.

Maximum Price

You can usually ignore this except for under one specific set of circumstances. If you have a tremendously popular listing, you can charge higher rates.

Depending on what you’re offering, there is some rate that is objectively unreasonable and will result in lower ratings.

You’d only be able to charge this super-premium rate in the short term until your rating started to decline.

In the real world, here’s how that happens: You’re offering a basic listing, and you’re in a micro-neighborhood with a lot of demand for your specific listing and not a lot of supply.

I have personal experience with this. Do you know my first listing as an Airbnb host was when I was working at Airbnb, and it was the couch in my living room?

It was in the heart of San Francisco. My FPG was a budget traveler. Nearby hostels were often sold out or expensive. So, the budget traveler had an option to book my $100 couch or a $300 hotel room. I could get away with $100.

Once I increased to $125, I started to get poorer ratings because the value simply was not there. Nothing changed about my offer, and I was able to raise it really high, even for a couch, but eventually, it was just unreasonable. In this case, my max price was $110 for the long-term health of my Airbnb listing.

Optimizing Occupancy At 3 Key Intervals

Optimizing Occupancy Near BLT

Besides the BLT, which generates your main occupancy target, you must optimize for both near-term and far-term occupancy.

To manipulate your occupancy around your BLT, you raise or lower your base price in increments of 5% per week.

But what about if your occupancy is good around your BLT, but then no one books near-term or last-minute?

Optimizing Last-minute Occupancy

I’m going to skip ahead and cover an important customization that most listings need. It’s called a last-minute discount. But we use it slightly differently.

However, let me explain how you might be utilizing this pricing customization. It’s the same way that most Airbnb hosts approach last-minute discounting.

Most hosts have no idea what their BLT is. It could be 15 days, it could be 75 days. Regardless, they add a large last-minute discount at 10 or maybe 20 days into the future. Let’s say 15% discount at 20 days and another 10% at 10 days.

That is common and wrong.

It’s not how demand works. Demand for any particular date doesn’t drop by 15% magically at 20 days in the future. It gradually dips starting around your BLT.

The best way to add last-minute discounts is via a gradual increase in the discount over a specified number of days. You should start your gradual last-minute discount based on your average booking lead time.

At The Belmonte Penthouse, I initially set a gradual discount starting at 25 days into the future because that’s what my average booking lead time is. The amount of your discount should get you down to your minimum or near it within the next week to ten days.

Example: Your average booking lead time is 25 days, and your minimum price is $175. You’d want to add a last-minute gradual discount of up to 50% percent within the next 25 days.

Why 25 days? Because at this point we know the majority of reservations (50%+) have already been booked based on our average booking lead time (remember, we expect about half of bookings to have been completed at 25 days in this example).

There will always be unbooked listings (i.e., supply is higher than demand) as dates pass. We don’t want to be one of them, so we’re outsmarting the competition by lowering just a little bit more than them, a little bit sooner.

Again, most listings apply a discount only within the next 5-10 days. We’re already in big trouble if we’re waiting until then. We’ll talk more about that in the very last-minute pricing section below.

We chose a 50% discount because our dynamic pricing tool showed our daily rates within the next seven days around our minimum price of $175. The discount will depend on your Base Price, but will generally be in the 30-50% range. Assuming we selected a 50% gradual discount starting at 25 days out from the target booking date, the discount customization would look like this.

Let’s assume it’s September 1st today.

26 days from today (September 26th)…0% discount

25 days from today (September 25th)…1.6% discount

24 days from today (September 24th)…3.2% discount

1 day from today (September 2nd)…50% discount, but never lower than our minimum price.

Are you ready for another wrinkle in the pricing game? I call it the “Weekday Wrinkle”. This wrinkle, this booking pattern, may have less to do with last-minute pricing and more to do with weekend versus weekday pricing.

If your weekends are getting booked much faster than your weekdays, this is common and something to pay attention to. It would have the effect of showing you a low near-term occupancy rate, but the real issue would be weekday versus weekend demand and not last-minute demand. Once we notice a booking pattern, we need to think about customizations to counteract it.

We will talk more about customizations soon.

Optimizing Far-out Occupancy

As we move further into the future, our occupancy should decrease uniformly.

That normal occupancy distribution with a 30-day BLT would be:

• 90% at 7 days
• 77% at 15 days
• 54% at 30 days
• 23% at 60 days
• 14% at 90 days

But what if your occupancy increases at the 60 and/or 90-day interval? Say it’s 59% at 60 days and 61% at 90 days?

Really, think about it.

Why would an FPG book your listing so far out?

Because your offer is the best. Offer equals value divided by price. In other words, it’s not only about price. The cheapest listings are not getting booked far out, but the ones with the best offer.

Amenities, reviews, etc., compared to the price equals the offer.

How many units of value are you giving the guest per unit of cost? That is your offer.

You probably already guessed that you’d raise your far-out pricing in that example. But what about in the more common example:

• 90% at 7 days
• 77% at 15 days
• 54% at 30 days
• 7% at 60 days
• 3% at 90 days

Near-term is a losing strategy, and far-out is a winning strategy because you can charge slightly more for far-out dates. The thing is, there is a fine balance, and most dynamic pricing tools try to get too much far-out premium.

You’re about to dive into the fourth layer of pricing. You are going to make so much money with my Airbnb pricing strategy.

Most dynamic pricing tools try to get around a 20% premium far out. I find this often too high. Better is to start at a 10% premium.

However, if you didn’t know that the automatic far-out premium applies to your listing at ~20%, then you wouldn’t know to change it.

Now you do. (See below.)

Would you rather get a few bookings far out at a 10% premium or none at a 20% premium? The answer is obvious.

You should be getting some far-out bookings. Let me show you a booking I got last night while I was sleeping.

That’s a BLT of 57 days. Twenty-seven days longer than my average BLT. My average nightly rate is $500. This guest paid $580. That’s a 16% premium over my average price, and for 5 nights at that. My average booking length is 3.5 days. That’s a score! I’m happy.

Did you notice my ‘Limited’ cancellation policy? That’s a new 14-day policy Airbnb recently made available. In the past, you had to choose between 5 days or 30 days. I announced it on my forum when it was released.

Here’s how my far-out pricing customization looks in PriceLabs:

And if I turn off that customization, take a look:

A default customization is applied at 19%, but it would start 60 days in the future. In other words, the default customization would have had me miss out on this reservation at 57 days in the future. I would have gotten a normal rate AND, I argue, this default far-out premium starts too late anyway. Very few guests in my market are looking to make a reservation 140 days in advance.

How to use Airbnb Price Customizations

I need you to connect the words ‘booking pattern’ to ‘price customization’.

Booking pattern = customization

When you notice a booking pattern, you will apply a customization to manipulate it the way you want.

I noticed I was not getting many far-out bookings. That was a booking pattern I wanted to manipulate. So I changed my far-out price customization, resulting in more far-out bookings.

The most common booking pattern is not getting last-minute bookings. So we apply a last-minute gradual discount.

We’ve already discussed these above. Let’s go to another less noticeable, but highly effect pricing customization.

Adjacent Factor Customization

This customization is underappreciated and traces directly back to our understanding of demand.

Let’s say that 100% of your calendar is open and you have a one-night minimum. Any guest can book any day of any week.

However, that changes as soon as the first reservation is made. Let’s say you get a 4-night reservation from Thursday to Monday.

While in the past, an FPG could have made the following reservations:

• Friday to Tuesday
• Saturday to Thursday
• Sunday to Wednesday

All of these include Monday. But as soon as you have a check-out on Monday, to get 100% occupancy, we have to get a reservation to check in on that Monday.

That affects demand. All those FPGs above could no longer book our place. Only FPGs who want to check in on Monday are now suitable. The demand for Monday dips (ie there are fewer guests looking to check in on Monday).

We must lower the price because the demand has lowered.

This is called an adjacent factor discount, and it applies a discount one or two days before and/or after an existing reservation.

Here’s how mine looks in PriceLabs.

If 50% looks like a large discount, remember two things:

• First, the nightly rate would never go below my minimum
• Second, demand is heavily affected, warranting a large discount

This is an undercover pricing customization that almost no hosts are using and is part of the reason why I’m getting 95% occupancy to my market’s similar listings average of 65%.

I have a video on my YouTube discussing four other must-have pricing customizations.

How Do I Price My Monthly Airbnb?

Monthly Airbnbs do NOT need to use a dynamic pricing tool. If you have a 30-day minimum, then you need to set a fair monthly rate. That’s it. Simple.

You should address changes in demand by month, but this is much simpler. In our example above, January to March might be $1,750 for low season, and the rest may be $2,200.

However, monthly rentals are called mid-term rentals and have subtle but important differences compared to short-term rentals or daily rentals.

Weekly Occupancy Management

A few years ago, you didn’t have to do this. But today, you have to dive a layer deeper into the pricing funnel.

After reading this blog post, and after implementing a weekly occupancy management routine, you’ll be at least a few layers deeper in pricing strategy than your competition. That translates into dollars.

Slow season looks a lot different for the best hosts. So do times of increased supply. Airbnb has a 1-3 year cycle, meaning that every 1-3 years, there is an oversupply, which affects all listings’ occupancy and nightly rates. But, as a host studied in pricing strategy, while these overall market trends affect you, too, they don’t to the level that they’re affecting the regular host.

The regular host can hold out about one year before they give up and stop Airbnbing. You will outlast them into the days of seemingly endless profits.

We track a few metrics on a weekly basis:

• Base price
• General occupancy associated with that base price
• Re-optimizations
• Customization notes

Let me give you an example of why it’s so important.

I am going to give you one hypothetical example and two hosts, one who tracks their pricing and the other who does not.

Over the course of 6 weeks, our real occupancy is dropping compared to our main occupancy target.

Keeping with the same numbers, our BLT is 30 days.

Six weeks ago, we were at 66% occupied.

Five weeks: 60%

Four weeks: 55%

Three weeks: 50%

Two weeks: 45%

Last week: 40%

The host who is not tracking sees that his actual occupancy (from 66% to 40%) is within his occupancy target (40-60% at BLT). According to my rules, he would not lower the base price.

Here’s what the tracking host would see.

This is how I actually track, and here’s what the colors mean:

No color: overoccupied (60%+)

Green: within range (40-60%)

Light red: underoccupied (20-40%)

Dark red: danger zone (0-20%)

Remember, today is Wednesday in our hypothetical, and the occupancy is 40% over the next 30 days (our BLT).

40% is on the edge of within range and underoccupied.

This indicates a downward trend in occupancy over the past six weeks. So if I’m tracking, one of two things likely happens:

1. I would catch this trend sooner, and lower the base price slightly earlier than my system would dictate (last week or the week before).
2. I would lower my base price more than I usually would, given the downward trend.

We typically update the base price in increments of ~5%. For our hypothetical listing, that would be $10. So, in the first of two situations identified above, I may have lowered $5 each week for a couple weeks. Or in the second situation, I would make one larger decrease by $15 or $20 this week.

The point of my Pricing Power Hour is to go over these little nuances to the overall Airbnb pricing strategy each month on the live call. After a few months, you should be well versed in the majority of nuanced situations.

The other two things I record are notes for any changes to customizations. This happens once every month or two. And I also would indicate with a bolding of the number on a particular week when I did a re-optimization (1-3 times per year).

A re-optimization is an alternative to lowering the price. In addition to adding wishlist saves, there is another strategy we can implement before lowering the price. Tracking enables us to identify trends more quickly.

What if my market has extreme seasonality?

Extreme seasonality makes pricing harder. Here’s what that looks like:

In this Floridian market, monthly occupancy fluctuates from a high of 90% or more to around 50% for 5-6 months.

Compare that to Medellin, where all year-round, for the average 4-bedroom apartment, it is 60-70%.

What do we do when our market has high seasonality?

We want to use a custom seasonal profile within PriceLabs, which defines our base and minimum prices given the season. Learn more about the custom seasonal profile in PriceLabs.

We want to understand if our booking lead time changes between seasons. It usually does. If it changes by more than 20%, then we should create up to two booking lead times per year. This affects our occupancy targets.

We want to understand the market occupancy per month, as that will change our occupancy targets. For example, in the Floridian market above, the BLT doubles in the slow season to 60 nights. That means from May to September, I want to be 25% occupied at 60 nights. The rest of the months, I want to be 40% occupied at 30 days (The high season market occupancy for the best listings is 80%).

This is crucial because if I’m aiming for 80% occupancy in the low season or 100% occupancy in the high season, I will artificially lower my prices to achieve this unrealistic occupancy rate.

Occupancy high.

Nights booked high.

Wear and tear high.

Potential guest issues higher.

Nightly rates lower than optimal.

Net revenues no difference.

Sad :/

Common Calendar Occupancies

I have identified through the thousands of Super Host Listing Optimizations I’ve done over the years, five common calendar occupancies, good and bad, and I’m going to tell you how to think about and optimize each situation, or how to avoid it in the future, if applicable.

As always, I’m assuming you’re aiming for full occupancy. If you’re in slow season and the top percentile of listings in your market are only at 75% occupancy, then adjust the numbers. You also need to know what I consider over- and under-occupied. It all depends on your BLT. It doesn’t matter if it’s 30 days or 300 days. However, let’s consider the more common 30-day period. I would expect to see a calendar occupancy like this, and let’s assume it’s September 1st again:

Within 7 days (to September 7th), 86-100% occupied (no more than one available day)

Within 15 days (to September 15th), 67-80% occupied (3-5 days of availability)

Within 30 days (to September 30th), 40-60% occupied (12-18 days of availability)

Within 60 days (to October 30th), 20-40% occupied (36-48 days of availability)

Here’s what that looks like:

Under-occupied (represents about 60% of calendars)

The most common calendar occupancy. This means one of two things, hopefully not both. Either your pricing is too high, or you’re in slow season.

You have a few options to help you in the short term, namely to make your listing more flexible, re-optimize, or lower your pricing until your occupancy comes in line with expectations.

Again, if you’re not happy with that price, it doesn’t matter, at least not in the short term, because the market has spoken and told you what you’re worth right now. In the long term, you can increase your reviews, offer more value, or sell and start over in a market with more upside.

No Bookings (represents about 10% of calendars)

Luckily, this isn’t common, and half could have been avoided with my New Listing Calendar Strategy.

If you’re an existing listing, then you have to increase your listing flexibility by lowering minimum stays or lowering your price. I would lower all prices, including high-demand dates, to your minimum price for the first half of your booking lead time (so 15 days if your BLT is 30). Airbnb seems to be momentum-based.

If you don’t have any bookings, the algorithm has communicated something to you that you need to fix urgently, and you’ll only be able to fix it with more reservations which will have to come at your minimum price in this case.

But, it should only be temporary. I do want to make note of markets with drastic seasons where there can be four or five months with extremely low occupancy for everyone in the market (I’m talking 20%). You have to be cognizant of your particular situation. If there are simply no guests booking, then there’s nothing for you to do.

Over-occupied (represents about 15% of calendars)

If this is by design and you prefer to be over-occupied by setting your occupancy targets higher, then pat yourself on the back.

You’re doing great!

Alternatively, if you’d rather not leave so much money on the table, then you should raise your base price in increments of 5%. Depending on your base price, here is how much you should be raising:

• $100 per night = $5-$10 increase

• $300 per night = $15-$25 increase

• $1000 per night = $50-$75 increase

Good Occupancy, But Low Within 2-3 Weeks (represents about 15% of calendars)

If you’ll recall from earlier in this section, this means one of two things. Either your minimum price is too high, or your midweek days are priced too high. If you don’t have a gradual last-minute discount, this would be a great place to start.

One Long Booking Then No/Low Occupancy

This is a rare situation with a very specific strategy to be applied. Let’s say you have one long booking coming up or already in progress that ends around your BLT (to stay consistent with our examples, that would be a 30-day reservation). And that you have zero bookings afterwards. Here’s what that looks like.

This could be a bad sign. You want to closely monitor this situation. Have you at least received some inquiries? If not, I want you to check two times per week as we get to within the BLT, and I want you to start lowering your base price if no inquiry or booking comes in, starting at three-quarters of the way through your BLT.

That means, if your BLT is 30 days, then you should start lowering your base price in increments of 5% starting once we get to about 21 days from the end of that one, long reservation.

Now, if the actual booking is longer than your BLT, let’s say it’s for six weeks, then I want you to increase your base price by 25% as the long booking starts. We want to reset the algorithm and/or get some bonus bookings.

Interestingly enough, the OTA doesn’t really know what your listing is worth. They have an idea, but there are a lot of anomalies. One listing could typically get booked at $150 per night, but also get some bookings at $450 per night. The OTA doesn’t really know why, they just know what happened.

So, let’s stick with that example and say you’ve been getting booked up around $125-$175 for the past couple of months. Fine.

Now you have a long 6-week reservation. You raise your price to $225 as that reservation starts. Ideally, you get a bonus booking at these higher rates within the next couple of weeks.

This is absolutely fantastic when it happens. Now you are communicating to the algorithm your new value because you have an increased base price, you are fully occupied, and you just got a booking at this increased price. You are resetting your pricing in the algorithm. Congrats!

Even if you don’t get a booking, in the future, when you lower your prices, the theory is that the algorithm is going to think you’re on discount, thus raising your search rank because the single most effective thing you can do to increase your search rank is to lower your rates.

I’ve used this very strategy numerous times with success.

When you get to your BLT (30 days out from the end of the long reservation), I want you to do the first lowering of your base price. If you raise it by 25%, then lower it by 15%. We’re still in bonus booking territory. If the booking runs from January 1st to February 15th, then you’d lower 30 days before the end of the long reservation, or January 15th.

To the OTA, they are only going to make money if you get bookings. So, their option now is to get you a booking at your 15% discounted rate or make no money. In one week, if you don’t get a booking, then lower your pricing by another 10%. Continue to do this in line with the weekly revenue management strategy.

You will cycle through all of these calendar occupancies throughout the life of your rental business. It’s a constant game. You have to make constant assumptions. Good luck, and, let me know what I can do to help further. I really want you to get this.

Common Airbnb Pricing Mistakes

There are a few traps that I want to make you aware of. Many of them have to do with customizations.

First, sometimes you have to switch on to turn off a pricing customization. Let me show you what that looks like with the Booking Recency Factor pricing customization within PriceLabs.

If I did not turn on that customization, PriceLabs would apply a default 5 to 15% additional discount to my prices.

By fully understanding the tool I’m using, I know that I need to turn this particular pricing customization ON to turn it OFF.

Do you feel yourself diving deeper into another layer of pricing strategy? How many other hosts know this?

The other common Airbnb pricing error that I want you to be aware of is the hierarchy within the pricing tool. For example, no matter what other customizations you set, the nightly rates will never go below your minimum price.

In other words, the minimum price is top of the hierarchy. This customization holds the most power.

You don’t have to memorize the hierarchy because I have a trick for you. Whenever you set a customization, go to your Airbnb calendar and verify that what you want to happen to your calendar is actually happening. This is a best practice, so please do it every time.

For example, if you raise your weekend prices by 20%, then look at your calendar price for a weekend night. Let’s say it’s $200. Set the customization. Sync the calendar. Calculate on that particular day what you think the new price should be ($200 * 120% = $240). Go to the live calendar and verify that the price is what you expect it to be.

That way, you know how your customizations are interacting with your live calendar prices. This becomes tremendously important once you start setting more than five customizations.

The final common Airbnb pricing mistake is having too many customizations. Start with one. Add one every now and then. You’ll also likely turn one off from time to time. Don’t be like the government and continually add rules without reviewing old ones.

Just like you wouldn’t continue to add text to your Airbnb listing without removing old text (you don’t do that, right??), you shouldn’t continually add customizations without reviewing old ones.

Another layer deep.

You shouldn’t really have more than 5 or 6 customizations at once.

Check Your Airbnb Dashboard

I want you to check your Airbnb Insights dashboard to see where you stand. And I’m going to show you with an example of an Elevate Host I just got off a video consultation with. This is a typical example.

This particular host had two listings. One was top 5%. The other was top 1%. Incredible. But many times they fall for the high-occupancy trap.

The listing has a high occupancy rate, but the nightly rate is in line with similar listings. If you have a top listing, why would you be charging a similar rate as your competition? You saw screenshots from my dashboard in the introduction.

Now, I present you with a live call where I’m showing the host this information for their own listing. I want you to check yours after, and post in the comments your nightly rate and occupancy rate compared to similar listings for the prior 3 months.

In the video, I do a calculation in the background. Here’s how I got to that calculation. Please repeat it with your own numbers.

They are rented for 90% of the year or 328 days (365 * 90%).

With my pricing strategy, they could be renting for 30% more than their current rates or $169 ($130 current rate * 130%).

That equals $12,792 more per year (328 days * $39 extra per night).

If your occupancy and/or nightly rate are not at least 30% higher than similar listings, you have a few options:

👉 If you want hands-on help with me on live calls and a private forum, consider joining my Airbnb Pricing Power Hour.

If you want to learn for free or feel you only need mild pricing optimizations, please watch my Airbnb pricing playlist on YouTube.

Pricing Power Hour for Max Occupancy and Rates

I got the idea. It hit me. Sometimes that happens, right?

It’s always been evident to me that short-term rental hosts have the biggest problem with pricing and occupancy management.

I realized in 2021 when I quadrupled the income on The Belmonte Penthouse from $42,000 to $164,000 that it was primarily due to my pricing strategy. I did that again in 2025 and repeated the same success listing after listing

Before I write the next sentence, I want you to know something about me. There are certain things I’m confident in (There are more things I am not confident in). But if I’m confident in something, I only outwardly express that confidence after many years when I’m deeply confident.

I am a very good basketball player.

I am a good cook.

I am very athletic.

There are plenty of things I would never dare express that level of confidence in, but..

I believe I have the best Airbnb pricing strategy in the world for hosts with fewer than 15 listings.

I’ve been told that by the same hosts using my pricing strategy. They notice an increase in nightly rates by default, due to applying my rules.

I want to teach that pricing strategy to any host who wants to learn.

You’ll find it in Part 5: Pricing of my book Profitable Properties.

You’ll find it on my YouTube channel for Airbnb hosts.

You’ll find it in this blog.

I implement my Airbnb pricing strategy for Elevate Host Optimization purchasers.

I have created my Airbnb Pricing Power Hour for Airbnb hosts who want hands-on teaching. Join me on Wednesday while I price my listings with your participation, explain nuances, and answer your questions.

Conclusion: Airbnb Pricing Strategy Help

Believe it or not, I had developed the basic outline of my Airbnb pricing strategy in the summer of 2015, and it has changed remarkably little since then.

Equally remarkably, I never knew how good it was until Airbnb changed its insights dashboard and showed me how I’m doing compared to similar listings.

I then embarked on a journey to verify the accuracy of the Insights Dashboard, examining other hosts’ occupancy and nightly rate data. Time and time again, my numbers were superior.

The crazy thing is that Business Insider ran a profile on me in 2022 because of how much my pricing strategy was making me and I still didn’t have the confidence to say that my pricing strategy is world-class.

You now know how much I went through before I had the confidence to say that I have the best pricing strategy in the world for Airbnb hosts operating 15 or fewer listings.

I achieved a 4x improvement with that listing using my pricing strategy, compared to what the prior property manager was able to do.

That’s an extreme example because the prior property manager was not great, and I have a very good handle on pricing.

Nevertheless, I have calculated that my strategy can earn you at a minimum an extra $10,000 per year. That’s for listings priced at only $75 per night, where I can increase the occupancy and nightly rates by 30% each.

The Belmonte Penthouse, the listing examined in the Business Insider article, has nightly rates of $500 and occupancy of 95%. And I make $122,000 more with my pricing strategy.

Wherever you are between those two extremes is how much more money you could be making with a few hours of focused study (you’ll get access to my pricing study guide in the forum upon signup) and a few months of refining your pricing strategy with me via live calls on Wednesday.

I’m keeping the price low to ensure a giant ROI on your hard-earned money, but I am raising it every 25th member so that I can continue to give individual attention to all subscribers. Your rate is locked in once subscribed.

Consider joining today to reap the rewards of a more profitable Airbnb.

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