Airbnb Investment Strategy: When You’re Priced Too Cheap

It all comes down really to how many people are seeing our property and how many of those people that see it are booking it. And so we know if you have more reviews and you have better reviews, more people will see it. But that's not all that goes into the conversion process. And Airbnb has some metrics on their website I want to talk about this week and just break down in regards to conversions. So let's just go ahead and jump into it. So the first one is just overall search impressions. And so, yes, reviews range really help drive your search impressions, in other words, your visibility, how many people can find you. But so do things like, do you allow pets? What are your prices? Are you charging too much or are you charging a competitive price? That's a big one on the booking sites. Cause they want the properties to get booked, right? Otherwise they're not gonna make any money. What are your amenities? Does your property have three night minimums or four night minimums? Well, then you're not gonna show up as much in the search results. That's just the name of the game. You have less flexibility, less options for people to book you. And so, of course, all these things go into search impressions. But how do we know what to do with these impression metrics? So if you haven't signed up for Airbnb's performance tools, most of you probably have it on your listings, but if not, you can just go to account settings and then click on the option to use professional tools. And that's gonna give you these conversion metrics. And so the next conversion metric is first page search impressions. Everyone always wants to be on the first page, right? We want to be on the first page of Google, because who's scrolling to the second page of Google? Well, fortunately for us, in the short term rental world, people do scroll to the second and third pages of listings. But obviously, if you're on the first page, that is better. Well, bad news, we can't control this, right? We can do all these things to make our property as visible as possible, but the reality is that we can't always be be on the first page. And so the more competitive your market, the more listings there are in your market, the more difficult it's going to be to be on that first page more often. Remember Airbnb and all these booking sites? They want these properties to get booked, right? And so they're going to cycle through the best, the most competitive properties, especially in markets where there's a lot more listings, to make sure that people are seeing these and to Test things out, really, with their algorithm so they make sure that more properties are getting booked. So the reality is you can't always stay on the first page, but you definitely want to be on there as much as possible. If you're out there and you're just getting started with a new listing, well, first of all, congratulations. It's an awesome journey. It's a fun industry, and I hope you do really well. Hopefully you'll tune in to the show in the future and get some quick actional tips from all the things we've learned after years and years and lots and lots of guests. If you are a new listing, you're probably going to see that your metrics are putting you pretty high up there. You're getting a lot of views. You're on the first page much more often than a typical property. And this is because you do get a boost when you go on Airbnb. It's very easy to see. So monitor your conversions after a month or a couple months of getting your first few reservations and really see what happens. So, again, under Airbnb, you can go to Insights, make sure you have the performance tools turned on, and then click on conversions, and you'll see these four metrics. So let's talk about a couple of the other metrics that are available to you, and then we're gonna talk about a really important one, which is how do we know if these metrics are good or not? So the next one is your search to listing page views. So what does this mean? Someone finds you on Airbnb? Maybe you're on the first page, maybe you're on the second, maybe you're on the fifth page, but they actually click on your proper. This is fantastic, right? This means your title is really good or your cover photo is really good, or it could mean they just don't have any options in that market. But we'll assume that you did a really good job with your listing. They clicked on it. And what does this mean? This means that you now have an opportunity to sell nights at your property. Right. If someone doesn't click on your listing, then you don't get that opportunity. And so we want to make sure that this number is as high as possible. Right? The higher the the better. Now, not all these metrics being higher is necessarily better. The next one we're going to get to, if it's too high, well, you might be leaving money on the table. So, anyways, back to search listing page views. So someone found your property. They clicked on it. Congrats, to you, they now have an opportunity to book it. If they don't book it here, well, then one of a few things might be happening. You might have a lot of fees. And once they get to the actual booking, they see, oh, wow, I've got eight people coming, but you're trying to charge me an extra, you know, $100 per guest for the extra four doubling my reservation? I don't think so. So. So fees from everything that we've seen can really hurt your conversion. If you're not set up for instant book, that can also really hurt your conversion, right? If someone has to message you and go back and forth, did someone click on your listing and uncover that you've got some really strict rules, like at the top of your listing description, which has totally deterred them? So if someone is stopping during this phase, they've opened your property and they're looking at the listing, but they're not actually converting, they're not actually reserving, then that's going to show up in the next metric, which is your listing to Booking conversion. So if you're at 75%, 75% of the people coming in that see your property are clicking on and opening it, but you're listening to booking conversion at zero, then that means something's going on there, right? You're deterring them in one way or another. Very likely your photos, something you have in your description, or your fees or your actual booking process, like maybe it's not on instant book. So play around with those things, right? That's how we can improve the listing. We have to write down what we change. Give it a couple weeks, right? Or I would recommend a month, because if you only give it a couple weeks, you don't really give yourself a lot of opportunity to book that property. Right? So a month is really probably where we want to be when we're making changes to our property to see if these metrics are improving or not. So that last metric, the listing to Booking conversion, really shows you someone's made it through the process. They booked your property. Hopefully they did. What happens if this number's too high? Well, that might mean that people got to your property because your prices were too low. They all clicked on them because your prices were too low, and they all booked them because your prices were too low. And how do we know what's too low? Right. This is the ultimate question. We have to have something to compare our properties to. Luckily, there is a metric right there in Airbnb that allows you to compare to similar listings for the same date range. So you want to just make sure that you select a date range and you can see are you 1% or 2% above the rest of the market? Well, I would argue that's too much. Right? That's quite a bit. Remember, this metric is usually around 0.5 to 4%. 4% would be really high. 0.5 is probably not high enough. But you will know this by comparing your property to similar listings. And a good tip here is that if you've had your property listed for a while, go back a whole year and see what your property is doing compared to the rest of the market. If you're 2% over the rest of the market to actual booking conversion, then you're probably a little bit higher. So hopefully I'm not losing you here. Again, you can go to Airbnb Insights and you've got these four metrics right there. They are very insightful and they let us know about that booking journey. Right, who's seeing your property? First of all, who, when is it showing up on the first page? How many people are actually clicking on it and then how many people are actually booking it based on those people that clicked? So hopefully that gave you a little bit insight. Remember, you want to check out the similar listings in that same section. There's a little drop down there. You want to check similar listings and see what your market's doing so you have something to benchmark off of. If you're getting stuck at one of these points, people aren't booking. Well, take a good look at your property and, and try changing some things, but make sure you monitor it and make sure you give yourself ample time, enough time to actually get some other bookings and some other views coming in before you decide, oh, that didn't work. And so until next time, this is becoming a bit of a science, isn't it? With our short term rentals, it's getting more and more competitive. I know that it is, but hopefully these quick tips have helped you out a little bit. Remember, our team is also managing other properties. Now, we've managed a lot of guests and everything from the small little urban apartment to some beautiful lakeside properties that sleep dozens of people. And so we would love to chat with you. If you're interested in working with our team. You can just go to Strict Comm. We've got a management services button right there and we would love to manage your properties the same way that we manage my portfolio. So until next time, I hope you have a fabulous week and we'll see you back soon.

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