October 2, 2014
It’s all about supply and demand: when there is an event in a city, prices for hotel accommodations increase drastically. And if it’s up to San Francisco-based startup Beyond Pricing, that should also be true for Airbnb hosts. Beyond Price helps Airbnb hosts & owners maximize the performance of their rental properties by using a pricing model similar to the one used by hotels and airlines. Of course, many hosts do this independently, but many times they end up losing a better deal because they don’t understand how the market around them is fluctuating at any given moment.
“We’re trying to help individual hosts take advantage of real data to guide them in setting prices. There are no other resources for them, so lots of hosts are really shooting in the dark. Demand-based pricing isn’t about squeezing extra money out of customers, but about finding the actual price that is supported by demand,” explains Morgan Solem, Customer Development at Beyond Pricing.
The idea of dynamic pricing is becoming a part of mainstream retail, thanks to Uber. The price you pay for a ride depends on the market at that time (weather or time dependent).
“Dynamic pricing isn’t just about raising prices – our pricing model will also lower nightly rates when demand is low, often lower than hosts would set rates on their own,” says Solem. “For Austin’s low season in July, we actually suggest that hosts bring down their prices by about 10%. Customers are used to hotels and airlines pricing dynamically and know to shop early to find the best rates, so there are still deals to be had.”
Solem adds that the company has seen revenues increase as much as 40% for their listings once their model price is implemented. Think of the possibilities in cities like Austin during SXSW or Miami during Art Basel, cities that host events that attract thousands of visitors.
For Beyond Pricing, they idea is to help hosts make the most out of the market demand easily. Renters just need to connect their Airbnb account to find out the optimal price for their home during that time based on real occupancy data.
The company has over 1,400 listings on their site from cities all over the world, and 7% of hosts in San Francisco have been using the service. They are launching this week in Austin, right before Austin City Limits (ACL) and the pricing tool is free for now.
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