How short-let prices should move through the year

Why one price all year leaves money behind

Demand for a short let rises and falls all year, and a fixed price only suits the nights where it happens to match. On the busiest nights it is too cheap: the home books months ahead, to the first guest who looks, at a price the market would have beaten. On quiet nights it is too dear, so the night sits empty. An empty night cannot be sold later.

Good pricing moves both ways. Each night is priced against what is happening locally on that date, and the price is reviewed as the date gets closer. That is how we work: we price every night against local demand, rather than setting a seasonal rate and leaving it. These are the things that should move the price of a night.

• Season and school holidays
• Day of the week
• Local events
• How far ahead it is
• Length of the stay
• Gaps between bookings

Seasons and school holidays

School holidays drive most leisure demand, because families travel when schools close. There is no single national calendar: councils and academy trusts set their own dates. The pattern is steady, though, and Scotland’s summer holidays start about a month before England’s.

Typical patterns from council calendars. Dates vary by council and sometimes by school, so check the ones your guests come from.

The earlier Scottish calendar matters if your home is in Scotland or draws Scottish families. Their summer peak starts in late June, while most English schools are still open until the second half of July, and it is over by mid-August. Scottish October breaks also tend to come one to two weeks before English half term. Bank holiday weekends lift demand everywhere.

The shape of the year also depends on who your guests are. A seaside home lives on holidaymakers, so it peaks hard in summer and falls away in winter.

A city home near a big hospital is a different business. It serves staff on placements, contractors and visiting families, so its demand is much flatter and follows the working week rather than the school year. It still dips over Christmas, when work stops, but there is no summer spike to price around.

Weekends, weekdays and local events

For leisure homes, Friday and Saturday nights are worth more than Sunday to Thursday, and the gap is widest outside the school holidays. A work-led home can be the reverse: busy Monday to Thursday with contractors and staff, quieter at weekends. Look at which nights in your calendar book first, and price those up.

Local events can make one night worth far more than the same night a week earlier. These move prices the most.

• Concerts and big gigs
• Football, cricket and race days
• Festivals and shows
• Conferences and trade fairs
• University graduations
• Weddings at nearby venues

Graduations are easy to miss and very reliable: universities publish the dates well ahead, and families book as soon as they know. With any event, the trick is to find it before guests do. Raise the price on event dates as soon as they are announced, and consider a longer minimum stay over the event so one-night bookings do not take the best dates.

Lead time: early bookings and the last few days

Lead time is how far ahead of the stay a booking is made. Summer holidays and big events book early; work stays and city breaks often book within a couple of weeks. The right move changes as the date approaches.

1. Months ahead
   Hold your nerveKeep the calendar open, but price peak and event nights in full. A summer night sold cheaply in January cannot be resold.
2. A few weeks out
   Check the paceCompare what is booked with what is usually booked by now. A fast pace leaves room to raise prices; a slow one calls for a small cut.
3. The final week
   Price to fill, above a floorAn unsold night earns nothing, so step the price down, but not below what a stay costs you to host.

Airbnb lets hosts add early-bird and last-minute discounts, and choose how much notice they need before a guest arrives, from same day to seven days. Used sparingly, last-minute cuts fill nights that would otherwise go empty. Used every week, they teach guests to wait for the discount. A floor price also stops a quiet night selling for less than the supplies, energy and wear it costs you.

Minimum stays, gap nights and longer-stay discounts

Every stay brings a changeover: a clean, fresh linen and new supplies. Guests pay a cleaning fee for the clean itself, but short stays still cost more to host per night. A minimum stay keeps that in balance. Common settings look like this.

• Two nights at weekends for leisure homes, so one night does not block a Friday or Saturday.
• Longer minimums in peak weeks and over events, when demand is strong enough to ask for them.
• One night midweek in quiet months, especially for homes that serve work guests.

Gap nights are the trap. If a two-night minimum leaves a single Wednesday between two bookings, nobody can book it at any price. Airbnb lets hosts set a shorter trip length for specific dates, so the minimum can drop to one night for that gap alone. Gaps appear as bookings land, so check for them every few days.

Weekly and monthly discounts make longer stays more attractive, and on Airbnb they override Smart Pricing for the stays they apply to. Set them with the season in mind: a deep monthly discount in July gives away peak nights, while the same discount in February may fill weeks that would have sat empty. On stays of 28 nights or more, Airbnb may also add its own Monthly Stay Savings, which it says it pays for and does not take from the host’s payout.

How the platforms treat your price

Airbnb’s help centre names quality, popularity and price among the main factors in where a listing appears. On price, it compares a listing’s total price with similar listings nearby, and says listings priced below comparable ones tend to rank higher.

Factors from Airbnb’s help centre article on how search results work.

These factors feed each other. A home priced well for what it offers books more, collects more good reviews and climbs the results, which supports a firmer price later. A home priced above what it delivers loses on all three at once. The comparison is on total price, so a high cleaning fee makes short stays look dearer next to similar homes.

Airbnb’s Smart Pricing raises and lowers prices automatically, using what Airbnb calls hundreds of factors about the listing and the area, within a minimum and maximum the host sets. It is a sensible start, but it does not know your costs, and any tool is only as good as the floor, ceiling and event dates someone checks behind it.

Why a full calendar is the wrong target

Occupancy, the share of nights booked, is the number most owners watch. On its own it misleads, because a home can be full simply because it is too cheap. The better measure combines price and occupancy. Hotels call it RevPAR, revenue per available room. For a short let, think of it as income per available night: the average nightly price multiplied by the share of nights booked.

In this example the calendar that is three-quarters full earns more than the one that is almost always full, with fewer nights of wear and fewer supplies used. The calendar priced too high loses too, because empty nights earn nothing. The aim is the middle: busy nights that earn their worth, and quiet nights that still sell. Our free earnings report shows average nightly rate and occupancy side by side for this reason, and our guide to short let or long let compares the whole year against a fixed rent.

Filling the quieter months

Even good pricing cannot make a seaside town busy in February, and cutting the price further only goes so far. The better answer is a different kind of guest, one who travels for reasons that have nothing to do with the school calendar.

We fill quieter gaps with both. Longer work stays and insurance stays turn a slow month into a steady one, and because they run for weeks they cut changeovers too. They are usually priced below peak nightly rates, which is fine: a steady booking at a fair price in November beats an empty home at a high one. The skill is not letting them take your best dates. A three-month stay that starts in June can swallow a seaside summer, so longer stays are fitted around the peaks rather than over them.

Questions owners ask