Depending on how many people stay in a property or unit, occupancy-based pricing sets different price points for the same property or unit. In this technique, you typically charge more per day the more visitors you host. No matter how many people are staying there, the accommodations are the same, but at a different price.
Although the lodging itself is unaffected by the number of guests, some hosts discover that the cost of the utilities is much higher. High occupancy tends to result in more utilization of the property’s general utilities, such as water and electricity, which raises the cost to hosts.
Some hosts use occupancy-based pricing, which bases prices and, subsequently, the owner’s expenses on the number of guests to mitigate these costs.
Are you comfortable with the occupancy-based price for your vacation home?
Occupancy-based pricing has benefits, such as more revenue. There may, however, be certain drawbacks. According to some hosts, this tactic may make it more difficult to monitor income. Additionally, if this pricing method comes out as frugal or a covert tactic to raise the price, your guests might be offended.
You will have to decide whether occupancy-based pricing benefits or hurts your vacation rental business.
If you routinely host big groups of visitors, raise your average daily charge to cover the additional expense of doing so. On the other hand, having occupancy-based pricing in place for the occasional large reservation would make sense if your large-sized property is normally solely inhabited by visitors or couples.
How can I configure Airbnb’s occupancy-based pricing?
There are more complex ways to set occupancy-based pricing on Airbnb, but various options exist.
You can create individual listings for each room you rent out if your house has many. You will need to manage each listing separately within site, which is a drawback. Alternatively, reduce the occupancy cap while assessing an extra visitor fee.