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[00:00:00] Sarah: ​Hello. Welcome back for another great episode. My name is Sarah Karakaian.

[00:00:09] Annette: I am Annette Grant. And together we are–

[00:00:10] Both Annette & Sarah: Thanks for Visiting.

[00:00:12] Sarah: And this is the–

[00:00:13] Both Annette & Sarah: Hosting Hotline.

[00:00:14] Sarah: Today we’ve got a question about dynamic pricing.

[00:00:18] Questions: Hey, Sarah and Annette. So I’m calling with a question about dynamic pricing. I already used dynamic pricing strategies in my business right now, and I see that Airbnb is making some changes to their fees. So the host fee for me is going up from 3% to 15%, and the guest is paying nothing. So with that in mind, does it still make sense for me to use dynamic pricing tools in my business with these changes? Thanks so much. Bye.

[00:00:45] Sarah: First of all, some of you hosts out there might be like, what are you talking about, girl? I’ve been being charged 15% for years now.

[00:00:51] Annette: Or you have other hosts going, oh my gosh, that can’t happen. I’m not going to make any money.

[00:00:56] Sarah: Right. This is Money Making May, and it is sponsored by our friends at PriceLabs. It is sponsored by PriceLabs because we’ve been using PriceLabs for the past five years. We use them. We love them, and it’s going to help all of you stay on top of your pricing, which all this talk right now of the short-term rental market being a little softer, occupancies being down, ADR is being down.

[00:01:19] You have to make sure that you are optimizing your pricing to its fullest potential because you don’t have the luxury to miss anymore. We really don’t.

[00:01:29] So to answer her question here, first of all, because this happened to me, anytime you get a booking on any OTA, quickly review it and make sure everything makes sense from is this guest in compliance with your house rules for that property? And what does that invoice look like? Especially if it’s Airbnb and they are the merchant of record, what does that look like? Where are the fees going? What are they charging? Does it look correct? And of course, you want to reconcile. Make sure you receive what that booking was supposed to send your way. So that’s tip number one. Stay on top of everything.

[00:01:59] Annette: And you would be surprised as wonderful and automated as payments are, I don’t know one host that hasn’t had some sort of hiccup. I’ll call it a hiccup.

[00:02:09] Sarah: We call it a hiccup. So that’s tip number one is just–

[00:02:12] Annette: Mind your P’s and Q’s. Dot your i’s

[00:02:14] Sarah: if you’re a co-host and you are managing multiple properties, then you need to get yourself a bookkeeper to help you stay on top of this because they will pay themselves in spades helping you catch anything that changes, especially if and when Airbnb changes the host fee. If you are at the 3% right now, I would advise or I would guess that you are soon going to be in the chopping block. You’re going to be wearing all the entire fee yourself sometime soon.

[00:02:38] Annette: And also there are a lot of different answers out there. Some hosts choose to take on the fee. Some, it’s just happening. Some are integrations. There’s a multitude of different reasons why other people in other countries have different percentages. We can just share that we’ve gotten a lot of different answers from a lot of different reps, that we don’t have one solid.

[00:02:57] Sarah: The only thing you can control is just staying on top of all your bookings.

[00:03:02] Annette: But it has happened, it is happening, especially for some people that are integrated with some software. So let’s dig into what you can do. So I guess our first answer is we would absolutely still use a dynamic pricing software.

[00:03:14] Sarah: I think you have to even more so because if your revenue is being cut in by a fee of 15% or whatever, 12%, 10%, whatever it is, you need to understand what that means to your bottom line. And any co-host out there or rental by owner who is using a property management software, you can increase the percentage. Let’s say, okay, you connect yourself to Airbnb from your property management software and you know that you’re getting charged 15% host fee. So then you upcharge any booking that comes through Airbnb an additional 15% to whatever you send your pricing, that is just going to continue to make you flat in terms of money that you bring into your bank account.

[00:03:55] Annette: And flat is a term used in the revenue management world, so it’s just keeping it even.

[00:03:59] Sarah: Mm-hmm. Even Steven. So it’s not enough, is what I’m saying. So when you adjust your pricing to accommodate that extra host fee, that’s when you start your strategy of, okay, now here, now I’m flat. How do I optimize what I bring in while still staying competitive with the market and having that guest alignment of value perception after they check in? And so here we go back to using a dynamic pricing software because my friends, you cannot stay on top of all the events in your town, all the hotel pricing, all the other short-term rentals in your area, all the little events that aren’t getting a large media attention, but they are still driving in a lot of people to your area. Let AI do that. Let software do that for you. And that is why we use price Labs for that.

[00:04:43] And then, of course, your own market research as well and staying on top of your community in general and even your micro area of your community. Like if you know in your tiny little area, there’s, I don’t know, actually this happened to us. We live right off this, one of our main drags on High Street or we don’t live, we manage. and A big DJ was coming to town for this random Thursday night.

[00:05:02] Annette: DJ on the main drag. Sarah. The main drag. You’re dating yourself on that one.

[00:05:07] Sarah: You better believe experience Columbus didn’t have this DJ on their calendar. You know what I mean? But I went into our own price labs for these properties, and I remember being like, I know that we can be more competitive here and drive our prices up even though the software hadn’t caught up yet, and my community calendar. So it’s a mixture. We’ll continue to say it’s a mixture of art and science when you’re dealing with revenue management strategy.

[00:05:28] Annette: You mentioned something in here too, Sarah, of AI. I know AI is all the buzz. Some people love it. Some people hate it. Some people are scared out of their minds about it. But this is one of those things like using a dynamic pricing tool where you can, from a arms length, use AI. They’re using a lot of machine learning, the AI. You can participate in it and not have to have that firsthand interaction. And when we’re digging into all this stuff. Please, this is not a set it and forget it. This is not, you’re going to learn everything that PriceLabs or any dynamic pricing software has in one afternoon. It’s going to be learning over time and just sharpening your pencil over time.

[00:06:06] But I want to that they do have workshops every day, like webinars you can get on and learn and ask specific questions. So please take advantage of those. Take advantage of any sort of customer support with any software that you use. But it goes into, you’re going to get out what you put in. And so we do have to offer that to you. This isn’t something you’re just going to plug in and it’s going to like do all the work for you. No, you need to do the work. Like Sarah said, it’s an art and a science. You need to know your property, you need to put the work in, but the rewards and the investment, the return on in that investment of your time is going to be worth it.

[00:06:38] Sarah: Is it really worth it? And I can tell you too, PriceLabs has these workshops, and Annette just mentioned they’re live like with an actual PriceLabs staff member. And you’ll be surprised. PriceLabs has a ton of users, but not many people show up to these live workshops. Let’s just call them office hours, for lack of a better term. So you are going to get a lot of one-on-one time if you just show up. if you are like me and you get frustrated when you go to their wikis, their education portals, and I’m watching videos, I’m like, I still don’t get it. It’s not like my exact issue, hop onto these live office hours because you’re going to get one-on-one time with a PriceLabs’ staff member in most cases. I mean, I can’t guarantee it, but every time I’ve hopped on, I have, and it’s really helpful.

[00:07:20] Annette: So to wrap this up, use dynamic pricing. You need it. You’re going to need it more than ever when the rates start changing

[00:07:28] Sarah: Yes. And here in Moneymaking May with PriceLabs, we are going to give in partnership with PriceLabs anyone who is not yet a PriceLabs user, a free 30 day trial.

[00:07:38] Annette: So you have nothing to lose.

[00:07:39] Sarah: Nothing to lose. And I can tell everyone when you subscribe to PriceLabs, because you’re going to love it, it is one of the most competitively priced dynamic pricing softwares out there because they don’t do it. It’s like a flat rate, which is really lovely.

[00:07:53] Annette: Some them do a percentage of the stay.

[00:07:55] Sarah: Yes. And PriceLabs right now is I mean, I don’t know, but for the foreseeable future, their pricing has been like this since I’ve been a user. It’s like a no brainer. Why not use this for property? So with that, I am Sarah Karakaian.

[00:08:07] Annette: I’m Annette Grant, and together we are–

[00:08:09] Both Annette & Sarah: Thanks for Visiting.

[00:08:10] Sarah: Talk to you next time.