How your neighborhood impacts your prices daily

by Ian McHenry
Monday, May 26 2014

Your neighborhood has a major impact on your listing. There are two main ways in which your neighborhood impacts your listing.

Firstly, each neighborhood has a unique Day-of-Week demand curve, based on the type of travelers that visit your neighborhood.

Secondly, travelers assess your listing in comparison to nearby similar listings. Therefore, the price you can charge for your home must be partially determined by how well your listing performs, in comparison to nearby listings.

Visitor Type

Each neighborhood attracts different ratio of business travelers and tourists. Neighborhoods that attract tourists book out as you might expect: Friday & Saturday night book well, while the midweeks usually book more slowly.

However, neighborhoods near business districts, airports, and conference centers often see their booking rates peak on Monday & Tuesday nights. For example, in San Francisco, the SOMA neighborhood will almost completely sell out during major conferences.

By looking at the weekly demand curve for your neighborhood, we can discern the percent of travelers who come for business vs. pleasure, and use this to inform prices for your listing.

Nearby Similar Listings

Airbnb travelers often search for listings based on neighborhood, price, and number of rooms.

Therefore, when we analyze your listing, we compare your property to listings that are near you, with the same number of rooms, and similar prices.

By watching this subset of listings over time, we are able to see in what order your property usually books. Eventually, we can use this info to calculate your Base Price. For instance, if your listing books first, the market is sending a signal that your listing is underpriced.

Also, when our Distressed Inventory Model begins to price approaching vacant nights, it looks to nearby similar listings to know how much you should lower your nightly price. Ideally, we set a rate that is attractive compared to other listings, but also maximizes revenue for that night.