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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.
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!