Pricing strategy for a new listing

Rutland, Vermont
Short-Term & Vacation Rental Discussions
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Pricing strategy for a new listing

David N.
Member since 2021 · 59 posts · 16 votes

Ok community - coming to you with the big question and need some pro advice. In about 2.5 weeks, if all goes to plan, I'll launch my first STR. It is for a ski condo which we closed on in October and have been renovating. The peak ski season will be from December 26 through the end of March more or less. So that means when I launch, I will be 30 days out from one of the biggest weeks of the season. The place sleeps 8 so suitable for 1-2 families. I'm not looking for advice on the price to charge. I can figure that out. I'm interested in advice about my relative price and about the pace at which to drop it. It's brand new inside. Should I still try to undercut competition? If it doesn't book in the first week of listing, should I drop prices? After two weeks? Happy to answer other questions, but don't want to give out more info than you need.

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John UnderwoodPro Member
Investor · Greer, SC · Member since 2014 · 13k+ posts · 17k+ votes
1y

I would slightly undercut your competition to get bookings rolling in and start getting 5 star  reviews.

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  • Michael BaumPro Member
    Olympia, WA · Member since 2016 · 8k+ posts · 7k+ votes
    1y

    Hey @David N., I would post it up competitive with the others in the resort.

    How many are working STRs there? How many in the area?

    The more you drop the price, the bigger the issue with guests will be. Really low prices bring dregs and all the work you did could get damaged.

    2Reply
  • Mike GrudzienPro Member
    Lender · Eugene, OR · Member since 2019 · 2k+ posts · 1k+ votes
    1y
    Quote from @David N.:

    Ok community - coming to you with the big question and need some pro advice. In about 2.5 weeks, if all goes to plan, I'll launch my first STR. It is for a ski condo which we closed on in October and have been renovating. The peak ski season will be from December 26 through the end of March more or less. So that means when I launch, I will be 30 days out from one of the biggest weeks of the season. The place sleeps 8 so suitable for 1-2 families. I'm not looking for advice on the price to charge. I can figure that out. I'm interested in advice about my relative price and about the pace at which to drop it. It's brand new inside. Should I still try to undercut competition? If it doesn't book in the first week of listing, should I drop prices? After two weeks? Happy to answer other questions, but don't want to give out more info than you need.


     Do your research and price appropriately to your market and your competitors.
    I agree with Michael Baum.
    My 2 cents,
    Mike

    1Reply
  • John UnderwoodPro Member
    Investor · Greer, SC · Member since 2014 · 13k+ posts · 17k+ votes
    1y

    I would slightly undercut your competition to get bookings rolling in and start getting 5 star  reviews.

    2Reply
  • David N.
    OP
    Member since 2021 · 59 posts · 16 votes
    1y
    Quote from @Michael Baum:

    Hey @David N., I would post it up competitive with the others in the resort.

    How many are working STRs there? How many in the area?

    The more you drop the price, the bigger the issue with guests will be. Really low prices bring dregs and all the work you did could get damaged.

     @Michael Baum there are a manageable number of STRs. I here you about dropping the price and I'm in no danger of that. Thank you.

    0Reply
  • David N.
    OP
    Member since 2021 · 59 posts · 16 votes
    1y

    What if by the time I post there is almost nothing on the market in a comparable location of a comparable quality? In that case, should I go for the max I think I can get and then start dropping my price after two weeks?

    0Reply
  • Trent Reeve
    Atlanta · Member since 2022 · 716 posts · 645 votes
    1y
    Quote from @David N.:

    What if by the time I post there is almost nothing on the market in a comparable location of a comparable quality? In that case, should I go for the max I think I can get and then start dropping my price after two weeks?

     @John Underwood has it right. you dont have any reviews yet, so there will be some hesitation from guest to book if you are at the highest prices with no reviews.

    1Reply
  • Shannon Strickland
    Rental Property Investor · Northern Virginia · Member since 2022 · 127 posts · 123 votes
    1y

    @David N.

    Congratulations on nearing the finish line for renovating and launching your first STR.

    I’m guessing the ski community is highly seasonal and has deep-rooted family traditions of return vacationers. If that is true, many will have already booked their annual trip, and I don’t know that booking window. But many booking windows across the country have compressed, and you will get bookings if you are seriously competitive. This first season is for you to gain hospitality and property management experience and reviews. Next year people will have reviews to read to help them decide if they trust you with their hard-earned money. So, reviews now will translate to revenue potential later. There’s no shortcut.

    Hire the highest quality photographer you can, and make sure they capture the “money” shots showing what is most appealing to your target guest demographic.

    You mentioned that you are not looking for advice on pricing, but the questions were about pricing. Revenue management is a skill. As a new STR investor, hire dynamic pricing to help you manage revenue. They will help you ensure you don't accidentally leave money on the table by helping you study your competition and by raising or lowering your rates so you can compete better. Additionally, offer 20% off to the first few guests.

    2Reply
  • Mark Driskell
    Property Manager · Fort Collins, CO · Member since 2024 · 28 posts · 13 votes
    1y

    Leverage the Airbnb new listing promotional feature.  Start low on price...your goal is 3 quick bookings... On Airbnb, a listing's average star rating becomes visible to potential guests after it has received at least three reviews.  This ensures that the displayed rating accurately reflects guest experiences. To expedite the accumulation of reviews, focus on competitive market pricing, provide exceptional hospitality (aka.. go above and beyond to start... think welcome gift, etc), and encourage guests to leave feedback after their stay.

    1Reply
  • Andrew SteffensBusiness Member
    Tampa, FL · Member since 2022 · 3k+ posts · 3k+ votes
    1y

    Echoing much of above but you will need to undercut the competition as you do not have any reviews.  People will gladly pay the same or even a little more for place already reviewed.  As you get reviewed you can inch up to market pricing.  Mind weekly and monthly discount rates as well.

    [email protected]813-563-0877
    Vacation Rentals of Florida53 Reviews
    WebsiteView Page
    2Reply
  • David N.
    OP
    Member since 2021 · 59 posts · 16 votes
    1y

    Thanks everyone. Great advice

    0Reply
  • Patricia Andriolo-Bull
    Member since 2022 · 529 posts · 413 votes
    1y

    I'm going to go in a bit of a different direction. You are launching at a perfect time. While you might want to undercut, I wouldn't do so for dates starting Dec 26. That is when my high season starts also. When I launched my first STR I priced too low and was booked before I knew it. Check capacity in your market before you start undercutting, you may not need to. I would undercut if you were hitting the market in a slower season but when you are timing it close to your high season, not sure I would do that.

    1Reply
  • Brooke Dyer
    Member since 2024 · 60 posts · 25 votes
    1y

    Hi David! Congratulations on the launch of your first STR!

    I agree with Michael—staying competitive is key! Make sure to do thorough market research and leverage dynamic pricing tools, especially when launching during peak season. You don’t want to miss out on potential income. Take the time to craft a listing that stands out and is ready to book quickly once it’s live. I recommend pricing your property within 10%-15% of similar listings in your area to stay competitive, ensuring you attract the right guests without undervaluing your space.

    0Reply
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