It’s an exciting year for Chicago short term rentals! With demand for homestyle accommodation increasing and tourism in the city growing at an unprecedented rate, the opportunity to benefit from short term rentals is more present than ever before. While there are a lot of factors that are going to impact your earning potential, one of the most important ones is calendar and price optimization. How you go about capturing the wave of demand during the peak season and keeping your calendar strong during the low season should be very strategically thought out. The advice below is just meant to give you some basic strategies to keep in mind when managing your prices and calendar availability for each season. For more advanced knowledge feel free to reach out to us. Here is our guide to your Chicago Airbnb price optimization strategy!
Winter
As we all know, the winter in Chicago can get unbearably cold and the demand for accommodation really drops between early December to mid-March. Unlike the summer when there is so much last minute traffic, in the winter we really want to use our advanced booking window (i.e. several months before the winter starts) and secure longer bookings (five nights or more). What we want to avoid in the winter is short, low margin bookings with unbooked gap days and high turnover expenses.
For properties that are two bedrooms or less, set a minimum of five to seven nights for the winter and sell these dates at modest, but respectable rates in advance. The goal is to keep your occupancy strong and reduce your turnover (cleaning) costs. You can always bring down the minimum night stay as you get closer to vacancy or make adjustments to fill gap periods. For the holidays, we recommend a three night minimum at higher rates and slight multi day discounts beginning from the fourth night. If you are on Airbnb, their new rule sets feature (requires plug in) is great for strategic discounting.
Spring / Fall
Spring and Fall are arguably the hardest time to optimize because on a weekly basis you are transitioning from low demand on the weekdays to high demand for the weekends. The goal for spring and fall is to leverage the weekend demand to get your weekdays booked through a ‘bundling strategy’. In the spring and fall, what we want to avoid is getting four weekend bookings early and then being forced to discount weekdays heavily.
As we approach spring and fall, many listings are going to get their weekends booked quickly. At this point, any guest that is looking for a combination of weekday and weekends is going to have limited options. Ideally you want to initially set up a three night minimum with your Friday through Sunday rates being the highest. After that, set up multi day discounting rules to make your listing more attractive to people who want to stay for more than four nights. On Airbnb, using rule sets you can now make it so that discounting can be applied to specific dates of the year. That means you can position your listing so that the guests who book your place are the ones willing to book Friday through Sunday at the high weekend rate if they can get at least a couple weekdays at a slight discount. As you approach vacancy or if small gaps (e.g. two nights) get created in your calendar, then adjust your minimum night settings as necessary.
Summer
The summer is when dreams really do come true for Chicago’s top short term rental host. Most people sell their summer in advance at good but not great rates. This is where having an amazing Chicago Airbnb price optimization strategy will really pay off. In the summer, we want to take the exact opposite approach as in the winter. Instead of keeping the prices modest, overprice all dates by 25% – 35% during your advanced booking window (i.e. several months before the summer starts) and wait until either some dates get sold and / or most of your competition starts to disappear (i.e. their places get booked).
Up until about early April, keep your summer (June – August) at a five night minimum at the overpriced rates. We should note this strategy only works if everything (i.e. listing content, reviews, location, property quality) is relatively strong. Once early April arrives, change the summer to a three night minimum and keep your rates overpriced. You may get concerned at this point that your occupancy will be weak, but its too early to worry.
As the dates get closer start by slowly adjusting your rates to market. You will notice that by mid-May a surge in demand comes through for the summer and the power really is in your hands at this time of year. Keep a close eye on your competition and don’t be afraid to keep the rate aggressive until a week or two before. There are so many high quality guest profiles booking for the summer that eventually they will be left with little options and will book your place at high rates for three or more nights. Similar to the other seasons, adjust your minimum stay periods as required to fill gaps and vacancies.
So there you have it! Our guide to your Chicago Airbnb price optimization strategy. The short term rental market is booming in Chicago and there is so much opportunity with the number of travellers increasing quickly every year. We understand that some of what we’ve written may sound complicated or confusing, so feel free to reach out and we can answer any questions you have.