The Best Pricing Strategy When You First List Your Airbnb

Launching a short-term rental is exciting, but figuring out the right pricing strategy can feel overwhelming. Should you start with low rates to attract bookings and build reviews? Or is that a fast track to undervaluing your property and losing money?

Many new hosts believe that dropping their prices is the best way to fill their calendar quickly, but is that really the smartest move? In this blog post, we break down how to price your Airbnb when you first list, what strategies actually work, and the common mistakes that can cost you more than you think.

Does Lowering Your Rates Lead to More Bookings?

A common piece of advice for new hosts is to set artificially low rates in order to attract early bookings and build up reviews. While this sounds logical, it’s not always necessary—and in many cases, it can backfire.

Here’s why:

1. Airbnb already boosts new listings – The platform favors fresh properties, giving them extra visibility in search results for the first few weeks. You don’t need rock-bottom pricing to get noticed.
2. Cheap rates can attract the wrong guests – Lowering your prices too much can bring in budget-conscious guests who may not be the best fit for your property. These guests sometimes have higher expectations despite paying less, which can lead to tougher reviews.
3. You risk devaluing your property – Once guests associate your property with bargain rates, it can be challenging to increase prices later without pushback or fewer bookings.

Instead of automatically lowering your rates, focus on pricing your rental competitively based on market demand and value.

How to Set the Right Price for a New Airbnb Listing

Rather than relying on guesswork, follow these steps to determine the best pricing for your listing:

1. Research Your Market

Look at similar properties in your area to see what they charge per night. Consider factors like location, amenities, and guest capacity. Use tools like:

• Airbnb’s Market Comparison feature
• Dynamic pricing tools like PriceLabs or Wheelhouse
• Competitor analysis by checking listings with similar features

2. Adjust for Seasonality

Pricing should be fluid, not static. If you’re launching in peak season, you might not need to discount at all. If it’s a slower time of year, strategic adjustments can help drive demand.

3. Leverage Airbnb’s New Listing Boost

Since Airbnb naturally promotes new listings, take full advantage by optimizing your title, photos, and description. A well-presented listing at a fair price will perform better than an underpriced one with mediocre photos.

4. Offer a Competitive but Profitable Rate

Rather than drastically lowering prices, consider offering an introductory discount (e.g., 10-15% off for your first few bookings) to incentivize guests while still keeping rates reasonable.

5. Focus on Guest Experience and Reviews

Early reviews can make or break your listing. Instead of slashing prices, prioritize:

• A seamless check-in process
• Thoughtful amenities (snacks, quality linens, local recommendations)
• Prompt and friendly communication

Happy guests leave great reviews, which will boost your visibility and long-term profitability.

Midterm Rentals vs. Short-Term Rentals: Should You Consider It?

Some hosts explore midterm rentals (MTRs) (30+ day stays) as an alternative to short-term renting. But is it the right move when you’re just starting out?

Pros of Midterm Rentals:

✅ Fewer turnovers – Less cleaning and guest management
✅ More predictable income – Monthly leases create stability
✅ Ideal for certain markets – Great for cities with traveling nurses, corporate stays, or seasonal workers

Cons of Midterm Rentals:

❌ Fewer leads than STRs – Midterm guests are harder to find
❌ Longer vacancy periods – Listings may sit empty between bookings
❌ Legal considerations – Some cities classify MTR guests as tenants, which can lead to landlord-tenant laws applying

If you’re in a market where midterm rentals are in demand, it could be worth exploring. However, if you can legally and profitably operate as a short-term rental, STRs tend to yield higher revenue potential.

Final Thoughts: The Smartest Pricing Strategy for New Hosts

When you first list your Airbnb, pricing too low is not always the best move. Instead, focus on:
✔ Competitive pricing based on market research
✔ Optimizing your listing for Airbnb’s new host boost
✔ Delivering a high-quality guest experience for strong reviews
✔ Using introductory discounts strategically—not permanently

Every market is different, and the key to long-term profitability is balancing competitive rates with value. Instead of relying on discounts alone, take a data-driven approach to pricing and let your reviews and reputation drive demand.

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Thanks to everyone who submitted questions. To hear your voice on the show and send a question to Sarah and Annette, submit your burning hosting questions at: hostinghotline.com.

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