How Automatic Pricing Can Boost Your Revenue: A Chat with Ian at Beyond Pricing

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I have a special treat for you today! I spoke with Ian McHenry, the co-founder and president of Beyond Pricing, a neat tool that lets you use the kind of sophisticated technology that hotels and airlines use to automatically adjust your prices on Airbnb.

Ian’s data tells him that hosts who use Beyond Pricing have seen their revenues increase by at least 10%, and usually by over 40%, by filling more nights when demand is low and increasing prices when demand is high.

This industry is still so nascent and growing so fast, and new tools like this are springing up left and right—I want to make sure that at The Abundant Host, we cover things like this to add more meaning and context to these tools so you can make the decision that’s right for you, your listing and your guests.

I spoke with Ian to get a little more information about Beyond Pricing, and to hear his story of hosting and what it means to him. Read on for more!

The Abundant Host: You guys help hosts add automatic pricing to their Airbnb and other vacation rentals. Sweet! Tell me quickly how it works, and how it can help people who want to become Abundant Hosts.

Ian: Beyond Pricing is an incredibly simple solution with a lot of really complex math behind it.

Simply by connecting your Airbnb account to Beyond Pricing, we are able to adjust your nightly prices up and down based on changes in demand. We have adapted the sophisticated technology hotels and airlines use (in fact, we used to work for those big airlines and hotels!) to help give individual hosts the same power to dynamically price their place. We look at a lot of factors that influence demand in your neighborhood including how quickly other Airbnbs are booking nearby, hotel prices, seasonality, day of week, major events, and much much more.

By crunching all these numbers, we help you be smart about how much to raise prices for a big event or how much to lower them for the slow season or when to start discounting to score last-minute bookings.

Hosts that use us have seen their revenues increase by at least 10% and usually by over 40% by filling more nights when demand is low and increasing prices when demand is high.

Beyond Pricing - Homepage

How old is your business? What was it like starting your business?

We launched in November of 2013. We actually started our business helping hosts with turnkey management of the entire guest experience. We managed listings, optimized prices, took reservations, checked guests in, provided linen services, cleaned apartments—the whole shebang.

In doing all of this, we learned a lot about the pain points for hosts. While many things were a pain, the thing that was the hardest for hosts was figuring out how to price their place. I had spent the majority of my career at Oliver Wyman, a huge global management consultancy, helping gigantic airlines and hotel chains with dynamic pricing and revenue management. So I had a unique perspective on the importance and the difficulty of getting pricing right. If it was something that huge Fortune 500 companies needed outside help with, it wasn’t something the average host should have master on their own.

So we focused on what we were best at (pricing) so hosts could focus on what they are best at: creating a fantastic experience for guests.

We launched our Beyond Pricing tool in June of 2014 and have since grown rapidly to cover all the major US markets and the biggest cities in Europe. We’ve now priced over $5M in bookings for hosts and helped them increase their revenue often by over 40%.

Ian, are you yourself a host on Airbnb?

I am and my co-founder, David, is, too. David and his wife are much more active than I am and they have rented out their spare bedroom in San Francisco to help pay their mortgage for years. We’ve found that having fully immersed ourselves in hosting is what, in addition to talking to all of the hosts on our platform, helps us really cater our product to hosts.

What’s one of the most serendipitous experiences you’ve had hosting on Airbnb?

I think the most touching thing is when you receive a personal, hand-written note or a small gift from your guests after they leave. This is really incredible. You can’t imagine that happening with guests at a hotel. These are people that have paid you money to stay at your place, and when you really create a fantastic experience from them, they feel grateful, even if it is, at the end of the day, an experience they paid for. That’s really what amazes me.

How does Beyond Pricing encourage sticking to the community culture of Airbnb of “being at home wherever you are”?

Definitely. While we try to be the silent partner that helps a host be financially successful, we know that the success of Airbnb and homesharing in general is based around creating a more personal, more homey experience for guests. We can only do so much, and it really is that experience and that sense of community that a host creates that makes guests come back time and time again.

What’s your biggest piece of advice for potential Airbnb hosts?

My biggest piece of advice is to remember that creating an amazing experience for guests is the best thing you can do to be a successful host. That is at the very core. Beyond that, read up on blogs like the Abundant Host that help you understand a lot of the qualitative things you can do to navigate the complexities of running your own micro-business because simple things matter a lot. Things like having fantastic, high resolution photos, responding quickly, making sure you have lots of reviews, and all of these nuts and bolts matters that most experienced hosts have ingrained can be a bit tough to figure out for new hosts. And of course pricing. But we can help with that and take it off the huge list of things hosts need to worry about.

What does it mean to you to be an Abundant Host?

It’s really about creating that amazing experience for a guest with those little, personal touches. As an Abundant Host, making sure your place is priced just right will give you the piece of mind to be able to concentrate on creating great guest experiences. It sounds simple but it requires a whole attitude towards pleasing your guests and putting them first.

What’s the #1 first thing people can do on your site to enhance their hosting experience?

Our site is designed to be simple. It takes 60 seconds to sign-up, connect your Airbnb, review your price recommendations, and start syncing your optimized prices automatically to your Airbnb calendar. On a weekly basis, come back and check-in to make sure your health score is looking good and you’re set.

Just getting started is hugely valuable and will help you make sure you’re priced perfectly, especially for big events in your city. It’s amazing how just a few tweaks can make you hundreds of dollars more a month.

Thanks for reading! Have a question that wasn't answered here? If you'd like more specific help, I'd love to work one-on-one with you. Or, if you want to work collaboratively in a group with fellow motivated hosts, find out if the next Abundant Hosting Mastermind group is open. I also wrote a book, Cleaning Up, where I give you the nuts and bolts (and so much more) of finding your perfect turnover assistant, thereby upleveling your profit and success on Airbnb. Have a beautiful day!

Don’t Block Off Your Calendar Even When You Think You Should: Here’s Why

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If you’re an Airbnb host and you rent out your entire place, you might think that if you know you’re not going to be flying out of town during a certain weekend, you should block that weekend as unavailable on your calendar.

I’m here to tell you that in most cases, you shouldn’t block it out.

What should you do instead?

Charge the amount it would take to get you to stay elsewhere.

Firstly—don’t worry, this isn’t about becoming this guy. :)

Secondly, don’t worry again—if you list your $95/night one-bedroom for $335, you’re probably not going to even get many inquiries (except in this amazing personal instance… but this is rare!) This will likely stop 95% of people from even requesting due to the price, which is what you mostly want anyway—you do want to be home, after all.

But, what if the perfect couple falls in love with your place and wants to stay there that weekend for their anniversary?

And, what if you’ve got a gorgeous weekend getaway in mind that you’ve been meaning to take, that’s just an hour or two away (and who doesn’t?)?

Instead of blocking off your calendar, price your place accordingly so you can take that beautiful trip at a moment’s notice.

Of course, do your research first:

1) In your ideal weekend getaway destination, find a few hotels or Airbnbs that are less expansive than what you would reasonably charge for your own place. Let’s say you find Airbnbs that are $140/night. Great! Add them to your Wish List.

2) In your own listing’s calendar, choose some weekends that you know you’ll be in town and price them at say, $170/night.

3) When your ideal guests make a request to stay because they love your place, terrific! First: double-check your well-researched destinations. Once you make sure they’re available, hit accept! When your guests have booked—pack your bags and celebrate.

You’ve just earned yourself a weekend trip you’ve been meaning to take, at a fair trade (or even at a slight profit)!

The lesson here is this: you have to leave room for magic. As Rayne says, one of his biggest takeaways from the Airbnb Open was this: “Don’t be afraid to think in magical terms. The structure, the back-up, the security is all provided by Airbnb, so what can I do to make my guest experience magical?”

Make your experience magical, too. This is what Airbnb culture is all about.

Thanks for reading! Have a question that wasn't answered here? If you'd like more specific help, I'd love to work one-on-one with you. Or, if you want to work collaboratively in a group with fellow motivated hosts, find out if the next Abundant Hosting Mastermind group is open. I also wrote a book, Cleaning Up, where I give you the nuts and bolts (and so much more) of finding your perfect turnover assistant, thereby upleveling your profit and success on Airbnb. Have a beautiful day!

The Other Review: The #1 Simple Fix to Heighten Airbnb Ranking and Guest Interest

One of the most common errors I see people making when it comes to Airbnb hosting happens in a place that most hosts think doesn’t matter—the guest review.

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If you’re like most hosts, most of the time you do leave a guest a review.

But—are you leaving guest reviews the right way?

By adding 2-3 consistent words to each guest review, you can generate more traffic back to your listing, thereby increasing your search result standing within Airbnb and the likelihood that people will serendipitously find and book your place.

Here is one of the simplest and best Airbnb hosting tips I’ve discovered:

When it’s time to rate your guest, include a couple of sentences like: “Gary and his son left my place in superb condition! They are welcome back to my downtown Portland sanctuary anytime.”

Why?

You’re not only increasing the likelihood that another traveler will click on your listing, you’re creating channels of serendipity.

For example, if Gary and his son request to stay somewhere in Texas in the next month, those hosts will look at Gary’s reviews. What if they are going to Portland soon? What if they’ve thought about going to Portland and wondered where might be a great place to stay?

Because you mentioned Portland in your review, they’ll click on you—thereby generating more clicks on your place—star your place as a favorite (ranking you higher in search results), and maybe even book with you in the future.

I’ve experienced this magic on both sides of the coin. When I host, I always check the guest’s reviews—and sometimes I see that he just stayed in a “San Diego downtown gem.” Well, I love San Diego! I then click on that host, view their listing, and down the rabbit hole I go.

At this point I’ve already contributed to more unique views on that host’s listing, but furthermore—if it’s a lovely place at a good price, I can Wish List it for later review when I head to San Diego next. And voila—that person’s place is Wish Listed (making them more desirable in the eyes of Airbnb) and potentially earned themselves a lovely (if I do say so myself ;)) future guest.

Psst: I cover this and many more rookie Airbnb mistakes and easy fixes in my guide, The Top 5 Most Common Host Mistakes—And How to Be an Abundant Host Instead. Get it (100% free)!

Thanks for reading! Have a question that wasn't answered here? If you'd like more specific help, I'd love to work one-on-one with you. Or, if you want to work collaboratively in a group with fellow motivated hosts, find out if the next Abundant Hosting Mastermind group is open. I also wrote a book, Cleaning Up, where I give you the nuts and bolts (and so much more) of finding your perfect turnover assistant, thereby upleveling your profit and success on Airbnb. Have a beautiful day!

Be Precise and Positive: Show Guests Exactly How to Use Things

Through my experience hosting on Airbnb, I’ve discovered simple ways to add to my home design to make a guest’s experience at my place go more smoothly.

Here are three Airbnb host tips to help your guest help you!

Make finding/accessing things as easy as possible.

Don’t make your Airbnb guests go out of their way. For example, if you set them up a shelf in the fridge (which I highly recommend), don’t make it a small one that they have to maneuver their way around your old condiments to get to.

For example, this is what I write to show guests which refrigerator shelf is for them:

airbnb sign fridge

It’s the biggest and most accessible shelf in my refrigerator, and the sign tells them quickly where they can:

  • eat (put on their shelf fresh things that will go bad if they’re not consumed, like milk, vegetables, etc.—your guests will see it as a treat!)
  • drink (often, guests will leave me beer. I don’t drink beer, but my other guests sure do! Pass it forward, baby.)
  • put (when guests go shopping to cook their favorite dishes in your place, they’ll know exactly where to put their personal things for easy finding)

It also gently lets them know to stick to this shelf and say, ignore the Sancerre chilling on the refrigerator door. (And yes, guests do respect this!)

Don’t assume a guest knows how to use something.

We’re not talking about undermining anyone’s intelligence. You’re way better off explaining something from a loving place than saying nothing.

For example, I tell my guests to please not use soap on my cast iron pan—cuz dang, when I was in my 20s I didn’t know the first thing about cast iron pans! You’re not talking down to them—you’re educating them in a kind, refreshing way.

Here is how I help save costs and help people determine how much soap to use when doing their laundry:

airbnb detergent

I noticed that when I didn’t write “only fill 1/2 cup” on the laundry detergent, it disappeared way faster… and it’s only because people might not be sure what kind of machine you have. Writing this made my detergent last way longer, but more importantly, it’s a hand-written message from you helping people figure out what will give them the best results when navigating your place. You might feel like these things are obvious–but you’re doing a lot of your guests a huge favor.

Always guide/instruct your guests from a place of openness.

Which language do you think reads better when writing about, say, keeping a balcony screen door shut: 1 or 2?

  1. Do NOT leave the screen door open! Bugs get in.
  2. Please keep the screen door always closed. Bugs will become your friends at night if you don’t. :)

Sure, you can express the sentiment either way. But which way is more inviting, friendly and accessible? I trust you can figure it out. :) (And no, you don’t have to use a smiley face.)

Your guest is not a stranger using your service—he/she is sleeping in your bed. Don’t be afraid to show your personality, to have a sense of humor, to make them feel at home.

Expect the best from your guests, teach them what that means to you and they will give it to you.

Thanks for reading! Have a question that wasn't answered here? If you'd like more specific help, I'd love to work one-on-one with you. Or, if you want to work collaboratively in a group with fellow motivated hosts, find out if the next Abundant Hosting Mastermind group is open. I also wrote a book, Cleaning Up, where I give you the nuts and bolts (and so much more) of finding your perfect turnover assistant, thereby upleveling your profit and success on Airbnb. Have a beautiful day!