This the second part in my review of dynamic pricing software for Airbnb. I’m looking in detail at BeyondPricing, Wheelhouse, and PriceLabs. See the first installment here:
The Quick Summary
The starting point for using each of these packages is to set your “base price”. This is a nightly rate that is supposed to be the average of your nightly rates across an entire year. If you charge $150/night six months of the year and $50/night the other six, then your base rate is $100/night.
Wheelhouse will actually calculate and recommend a base rate for you. The initial calculation is based on location, the characteristics of the property (how many people it sleeps, etc), and past booking history (if any). As time goes by, it watches how the listing performs, and it will refine the base rate up or down.
I use Wheelhouse and for the last four months have periodically recorded all of the recommended base prices in a spreadsheet. For my five listings that have more than two years of history, the recommendations fluctuated just 1-2% from Oct 15 to Dec 11.
But for my new listings, where there was no history, Wheelhouse started high and then gradually lowered prices, some more than others. Again, Oct 15 to Dec 11:
- Dixie #2: $81 🠆 $77
- Dixie #5: $73 🠆 $57
- Poolhouse #1: $149 🠆 $126
- Poolhouse #3: $101 🠆 $99
And then at the end of December I got an email from Wheelhouse saying that they had rejiggered their algorithm.
We’ve been listening to your feedback and working on — among many things — some exciting updates to the foundation of Wheelhouse Pricing: the base price model.
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For more information about how and why we made improvements to the Wheelhouse base price model, check out our blog posthere.
All of my prices dropped. The listings with 2+ years of history all dropped 2-3%, but the new listings dropped drastically:
- Dixie #2: $77 🠆 $58
- Dixie #5: $57 🠆 $47
- Poolhouse #1: $126 🠆 $87
- Poolhouse #3: $99 🠆 $73
How Wheelhouse Sets the Base Price
In addition to offering a specific recommendation for the base price, Wheelhouse makes an effort to explain where it comes from. Big thumbs up to Wheelhouse on both points. And yet, I find their explanation very frustrating.
A minor frustration is the chat button that covers the most important number. By repeatedly resizing the window I was able to figure out that it is $137. But that’s minor.
The real frustration is that there are three variables that I can immediately and easily tweak to change the apparent value of my listing: “sleeps”, photos and fees. And yet, of photos and fees, I don’t know which one to attack. And what’s this about “etc”?
I typically have 20-25 photos on my listings. I had real elsewhere that having lots of photos was important, but seeing it here spurred me into action. I called my photographer and told him to give me a lot more photos.
Then I thought to ask Wheelhouse support how many photos were needed. “About 10” was the answer. Hmmmm…. How about some help on “fees”? For very little effort Wheelhouse could break these apartment and offer another very valuable piece of information to owners.
How much will I get if I replace the sofa with a sofa sleeper (ie, couch that turn opens up into a queen-size bed) and increase “sleeps” from three to four? It’d be nice to know, and I’m sure Wheelhouse has the data. Maybe the topic of a blog post?