Many property owners who rent out their property via short‑term leasing wonder whether they should set a low price to win guests, or whether that ultimately undervalues it.
The basic principle for setting the right price is that the host must remain flexible in pricing.
Positive and negative trends
All markets display, from time to time, upward and downward trends. Short‑term rentals are no exception.
In our country, it is commonly believed that in the summer—especially on the islands—Airbnb has 100% occupancy. Or, at least, that is what we assume.
Similarly, the same is thought to apply to winter destinations such as Arachova, Pelion, etc. Thus, we often assume that in the high seasons of each area, prices must be sky‑high. However, things are not exactly like that.
Why overpricing no longer works
The time when high prices guaranteed bookings has passed. The data shows that this logic does not deliver what it “should” deliver. We must not forget the unpredictable factors in each case.
In several destinations in Greece in recent months, a decline in revenue from properties listed on Airbnb, Booking, etc. has appeared. Most of those—if not all—were overpriced, with rates set according to what the host considered the ideal price, based on last year’s prices plus an additional percentage for taxes, fees, etc.
The market is unpredictable; demand changes constantly as developments unfold. Excessive prices led to lost bookings and, consequently, lost income. Travellers can compare prices across platforms and turn towards more affordable options.
Dynamic pricing and factors that shape the rate
As we understand, the short‑term rental market is particularly volatile. This means that the price of a property cannot remain static, nor can it rely solely on a logic of excessive demand. This is where the concept of dynamic pricing comes in.
It is a pricing strategy in which the prices of products and services are analysed and adjusted in real time, based on factors such as demand and supply, seasonality, competitor prices, as well as other market factors.
Dynamic pricing is widespread in pricing for airlines, hotels, supermarkets and e‑commerce.
Dynamic pricing allows hosts to adjust their prices according to:
- The general market trend and fluctuations in demand
- The competition and the prices offered by comparable listings
- The specific conditions of the period (day of the week, seasonality, special events)
In this way, both overpricing (which leads to low occupancy or even cancellations) and underpricing (which reduces income) are avoided. The goal is balance—to keep the property both competitive and profitable.
Practical advice for hosts
To be sure you have set the appropriate prices for your property, there are tools you can use to help you (such as Beyond, PriceLabs, etc.). There are also free options within the platforms themselves (Airbnb Smart Pricing), although they are more limited.
You should carry out regular price checks of competing properties, remain flexible and maintain a balance among your own rates. It may be good to maintain a price range per season instead of one fixed price. That way, you can adapt more easily.
Also, stay informed about events taking place in your property’s area (concerts, theatre performances), but do not rely solely on these for setting your prices.
Correct pricing is not a matter of luck, but of strategy. With the right tools and continuous information, you will not face loss of bookings.
By choosing Sparrow to manage your property, you do not need to worry about the correct pricing strategy. Your property will always remain competitive and profitable, regardless of market fluctuations.
