Lately, many of you may have noticed what seems to be a controversial practice on booking platforms like Airbnb. Some properties suddenly increase their prices significantly for a short period before returning to normal rates. For example, a property that usually costs 100 euros per night might be offered at 1000 euros for 20 days before returning to the regular price. This phenomenon has sparked a lot of discussions and questions among hosts, and it has been revealed that this is a strategy to avoid blocking certain dates. Hence the question: Is it right to raise prices instead of blocking dates? Let’s explore it together.
The Origin of the Debate
The discussions began when some online host communities started to wonder if raising prices so excessively could be a better strategy than blocking dates on booking sites. The theory behind this practice argues that blocking dates can harm the visibility of properties because booking sites prefer to have as many properties available as possible. Indeed, at first glance, this argument may make sense. However, it’s important to consider some nuances.
The Airbnb Algorithm
To better understand the situation, we need to take a closer look at how algorithms on booking platforms like Airbnb work. These algorithms take into account numerous parameters to select and promote properties to potential customers. Blocking dates in advance, as some claim, may reduce a property’s visibility even when it’s available. However, Airbnb is not interested in penalizing hosts by missing out on business opportunities. Airbnb’s main goal is to facilitate bookings and ensure that customers find the best option for their needs.
The Risk of Inflated Rates
There is a fundamental aspect often overlooked in this strategy: the risk of penalties. If a host raises prices disproportionately, and a customer still decides to book (which has happened multiple times in reality), the host would be in a difficult position. They might have to choose between two options: accepting the reservation or canceling it (which could be forced, for example, due to ongoing renovations in the property). Cancellation would result in a penalty, which could be significant, especially after Airbnb’s recent policy changes, allowing penalties of up to 50% of the booking value. In the example we used, it could amount to 10,000 euros. And the host may not be able to avoid the penalty by citing extenuating circumstances because they should have used the date blocking tool.
What’s Behind This “Strategy”
In reality, raising prices is not a well-thought-out strategy but rather the result of a technical limitation. Airbnb only allows a few selected partners to automate changes to property calendars. Most existing channel managers do not have access to this function and had to find alternative solutions to make changes to calendars. These “alternative solutions” that many of them found only allowed for price adjustments, not date blocking or unblocking. This led to the practice of excessively raising prices, and the rumor started that this was a “winning strategy.” Hundreds of novice property management gurus contributed to spreading this rumor.
The Truth About Raising Prices Instead of Blocking Dates
In conclusion, raising prices excessively instead of blocking dates is not an effective strategy and could entail serious risks. Blocking dates does not negatively impact the visibility of your property. Airbnb and other platforms want to encourage bookings, and if your property is an attractive option, it will be promoted to potential customers. Don’t be misled by supposed “winning strategies” proposed by inexperienced experts. The key to a successful hosting experience is offering quality service and appropriate pricing.
In summary, rather than trying to circumvent the system with questionable practices, focus on providing high-quality service to attract and satisfy your guests. In the end, the success of hosting depends on customer satisfaction and professional property management.”