Not that long ago, Atlanta was in the throes of Super Bowl madness. They hosted the Superbowl, and no one could have predicted what that would do to the short-term rental market.
All the experts said that the influx of people coming into the city was supposed to be enormous, on a scale rarely if ever seen in recent memory. In anticipation of this, thousands of new hosts put their space up on Airbnb, hoping to get a piece of the pie. Existing hosts jacked their prices up to exorbitant levels. They created all sorts of special packages and deals to entice fans to pay thousands of dollars to stay with them. It was going to be the biggest moneymaking weekend of the year for every host in the city.
But then the wrong teams made it to the Super Bowl.
Rather than the teams with the rabid fan base and relatively close home town, the actual teams that made it to the Superbowl were either coming from very far away, or they had made it to the Superbowl so many times that it wasn’t that exciting for the fans anymore.
As a result, the number of people who converged on the city was wayyyyy less than expected.
Between the glut of new listings and the huge hike in many people’s rates, many, many homes were vacant that weekend. Hosts lost out on thousands of dollars of potential revenue that weekend. And in fact, the damage continued well past that weekend, as the market took many months to recover from the onslaught of new listings in such a short amount of time.
So what’s my point?
This is my point: don’t get greedy when it comes to making extra money on popular weekends.
Yes, you should increase your prices according to demand. That’s one of the reasons I recommend using a dynamic pricing tool like Wheelhouse – it adjusts everything for you so that you don’t have to.
But if you’re greedy, there’s a high probability that you’re going to miss out.
These days there is too much supply, too many other alternatives. People simply aren’t going to book with you if you increase your rates 10x what they normally are, no matter how many people are expected to come into the city that weekend.
Plus it’s just plain unethical.
Would you rather make a lot more money than you normally would, or try to scalp some poor guest by charging exorbitant rates that no one should ever have to pay? Even if someone does book, there’s just something unethical about that to me.
Plus I’m very risk-averse, and I’d much rather a guaranteed payout that’s larger than normal, than the possibility of an even bigger one that also has a chance of no payout at all.
For most people hosting on Airbnb these days, it is a business for them (or at the very least a lucrative side hustle).
I’m not suggesting that you ignore that and just give your space away for pennies on the dollar of what it’s worth.
But I am asking you to be reasonable. Charge what you would reasonably expect to pay if the tables were turned. Don’t charge an arm and a leg for someone to have the privilege of not sleeping in their car for the weekend. In the end, it’s better for both of you – they’re charged reasonable fees, and you actually get booked!