Pricing Strategy for a Brand New Unit on Airbnb

Reviews and stars are critical to getting bookings. But you don’t have any. What should you do? One strategy is to just set your target prices and wait. You will get some bookings, and you will eventually get reviews and stars. But you are going to have a lot of vacancy for the first few months, and revenue is going to suffer.

But remember: a 5-star review is worth the same whether it is for a single night at $10 or two months at $10,000. My strategy is this:

  1. I don’t want long bookings. For the first sixty days I set a minimum stay of one night and a maximum of three nights. That’s right: 1-3 nights only. It’s all about getting the stars.
  2. I set prices low. Really low. If it’s during the high season, I don’t have to be as aggressive, so just 30% off my target rate. If it’s during the low season, I’ll go even lower. Of course the target rate is already low for the low season, so my price can go as low as $25/night.
  3. I don’t drop the cleaning fee. I pay my cleaner a flat $50, and that’s what I charge as the cleaning fee. I’m willing to take a low price, but I’m not willing to take a loss.
  4. I explain in the listing that the price is very low because this is a new apartment. I explain that we might not have all of the glitches worked out, but that we’ll fix any problems quickly. Going further, I say that I’m looking for guests who will give a good review in return for a low price.
  5. I pay to have it cleaned before the first guest arrives. My decorator always tells me very proudly, “It’s perfect! It’s my favorite apartment so far! You can put it on the apartment for booking tonight, it doesn’t even need to be cleaned!” Not so fast! I want to make sure my cleaning lady is totally familiar with the apartment before the first guest arrives. I can’t have her seeing the apartment for the first time on a same-day turnover when she also has three other apartments to clean.

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