Why Do AirBnB Prices Fluctuate So Much?

According to a study published on Priceonomics, it’s 21% cheaper to rent a whole apartment on Airbnb than to stay in a hotel. It’s also 49% cheaper to rent a private room on Airbnb than pay for a suite in a hotel. Despite the price advantages, many visitors are bothered that the rates on AirBnB fluctuate too often.

Airbnb prices fluctuate depending on customer demand, how near the stay dates are at the time of booking, and whether the host has set custom prices for the property. The prices also deviate from what’s listed if the host charges extra for guests.

In this article, I’ll explain how AirBnB prices are determined and what factors make them fluctuate. I’ll also give you some tips on how you can save money on your Airbnb reservations by bagging discounts from hosts.

Why Actual AirBnB Prices Deviate From What Is Listed

It’s a shock when you discover that what you have to pay for your Airbnb reservation is different from what was listed. Sometimes the difference can be a few hundred dollars, which is enough to make you start your search for affordable accommodation all over again.

The following are the reasons why Airbnb prices fluctuate so much:

The Host Sets Custom Prices for Specific Stay Dates

Airbnb displays the nightly rates of rental properties. It’s the minimum price that the host has determined for the property. You see these rates before you select the dates for reservation.

According to Airbnb, some hosts set custom prices for specific days or time periods. For instance, they can choose to charge more than the default price for weekends, holidays, or long-term reservations. These custom prices aren’t displayed upfront.

When you add your reservation dates, the custom prices override the default or minimum rates. So, you see a price that’s different from the nightly rate that was initially displayed. If this happens, ensure that you choose the reservation dates when you search for accommodation. If the host updates the prices before you select the dates of your stay, you’ll have to pay according to the new rates.

Available Inventory Is Low

Sometimes Airbnb hosts can raise the nightly rates for their properties when you are near the stay date. This tactic is profitable in locations or during times when the demand for vacation rentals is high.

The closer the stay date, the less is the available inventory. Sometimes visitors are compelled to pay the inflated price because they don’t want to change their travel destination. At other times, visitors can’t change the travel dates because they may have already made their flight reservations. So, they have to pay higher prices.

Customer Demand Fluctuates

The prices on AirBnB mirror customer demand. The demand for rental properties in certain locations tends to increase at specific times of the year. For instance, the annual Coachella Valley Music and Arts Festival in April draws crowds from far and wide. The prices for vacation rentals in the region during the festival can go up to $1,800 per night, compared to around $300 per night at other times of the year.

According to Business Insider, the average daily rates on AirBnB are up by 35% in the post-pandemic times. In the US, the demand for large vacation homes outside city limits has increased in recent years. The increased demand has spiked the prices of these properties on Airbnb.

Sometimes hosts reduce prices if their properties have been unoccupied for a long time or during lean seasons when visitor inflow is low.

The Host Levies Extra Charges for Guests

The nightly rate displayed on an Airbnb listing is usually for 1-2 guests. Hosts typically charge extra for each additional guest for each night they stay with you. It’s not always easy to spot this fee in a listing; you might get a nasty surprise when the payment confirmation screen comes up.

If you’re traveling with your family or in a large group, be aware of the extra charges for guests.

Guests Have To Pay Miscellaneous Taxes and Deposits

Some Airbnb hosts or Airbnb may require guests to pay a security deposit. Visitors from certain countries may have to pay Value Added Tax (VAT, JCT, and GST). Depending on the location of the host’s listing, guests may also have to pay local taxes.

Do Airbnb Prices Go Up the More You Search?

There have been allegations that Airbnb has adopted Ryanair’s approach for its pricing system.

Travelers usually have to visit flight- and rental-booking websites multiple times before finding the most convenient combination.

Airbnb prices go up the more you search. Airbnb has adopted a tactic that increases reservation prices for an IP that regularly visits and searches on its site.

This tactic is similar to the one implemented by flight-booking websites and explains why you may see an instant increase in prices as you’re searching.

How Do You Get an AirBnB Discount?

Although Airbnb prices fluctuate wildly and have been increasing recently, you can save money by booking vacation rentals on their site.

You can get an Airbnb discount by negotiating with the host. After you’ve selected a rental, click on the “Contact Host” link on the listing to get in touch with the host. You can then request a discount.

Here are some tips on how to contact an AirBnB host and request a discount on your booking:

  • Before requesting a discount, send a message to introduce yourself. Include the dates of your stay and the number of guests who’ll stay with you.
  • Tell the host why you want to stay with them. Don’t request a discount at this stage.
  • Wait until the host responds to your message and “pre-approves” your stay.
  • When you have a positive response from the host, ask them if they have any special offer or discount.

You’re more likely to receive a discount from the host if you plan to stay long-term or intend to stay during a lean tourist season.

Final Thoughts

Knowing why AirBnB prices fluctuate so much helps you plan and budget your trips. Prices can fluctuate when the host has set certain prices for specific dates, or inventory is low and customer demand is high.

However, it may be possible to get a discount on your reservation if you communicate with your host beforehand.

Sources

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