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Analysis

Why it may be a good idea to avoid rounding off prices on Airbnb

For the sake of simplicity and clarity, Airbnb hosts (private and professionals alike) got into the habit of rounding prices up or down when listing their accommodation. Yet it is in their interest to show some restraint in terms of sobriety in order to maximize their exposure on the American company’s website – especially in cities and regions where Airbnb’s supply is dense.

This assessment is based on a fairly simple observation: when using its search engine, a maximum of 300 results can be displayed on Airbnb’s website. Hard to find your niche with such competition, as most hosts instinctively list their room or lodging following similar price patterns. A potential guest looking for accommodations as per destination - "Paris", "Nice", "London", etc. – and for a certain price or specific price range would not be able to see every single listing if the number of available lodgings exceeds 300. Now many of Airbnb’s rooms and apartments are listed with prices rounded off to a "0" or a "5".



Distribution of prices on Airbnb listings in Paris (percentage of available listings)



When the specified price ends with "0" or "5", the listing is less inclined to rank high in the search engine – or even to be visible at all – because of Airbnb’s competitive price range. To address this issue, Airbnb keeps refining geographic areas likely to be searched: in Paris, the marketplace platform’s capital, searching can now be done below the scale of the district. Yet, there is a lower chance for a visitor using its search engine and only specifying the name of the city or a wide perimeter to see a listing for rounded-off prices, as a result of the sizable supply based on similar criteria. A well-advised Airbnb host should avoid rounded-off prices in order to maintain good exposure on a large geographic perimeter, especially if this perimeter is comparatively attractive (for example"18th arrondissement" rather than "La Chapelle", or "Côte d’Azur" rather than "Saint-Laurent-du-Var").

This inclination of Airbnb hosts towards "rounded-off" prices contrasts with the practices of professionals, where price fluctuations can be worked out to the last penny, and rounded off figures are about as common as at your favorite supermarket… Hoteliers and Airbnb hosts have at least one thing in common: they adapt prices depending on the local events calendar or tourist seasons.

Also read:

  • TourInvest Forum 2015: the real value of the sharing economy
  • Airbnb to collect tourist tax for its Parisian hosts
  • Record valuation for AirBnB

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