Setting Up Your Minimum Price

Hi, everyone. The next step in setting up your prices is defining your minimum price. This is a crucial step because your minimum price tells Price Labs the lowest rate you're willing to accept for a one-night booking.

Importance of Setting a Minimum Price

The importance of setting a minimum price lies in its role as a safeguard. It ensures you don't accept bookings below a sustainable or desirable rate and helps maintain a balance between affordability for guests and profitability for you.

How to Set a Minimum Price

There are a few key factors to consider when defining your minimum price:

1. Flexibility: Especially for new hosts, temporarily lowering your minimum price can greatly increase your chances of securing those all-important first few bookings. These early bookings often lead to reviews, which build trust and attract more guests in the long run.

2. Slow Seasons: During periods of low demand, a lower minimum price can attract budget-conscious guests. This strategy is particularly useful for shorter trips or weekday stays when bookings might otherwise be slow.

3. Cover Basic Business Costs: Your minimum price must cover your basic business costs, such as utilities, supplies, or maintenance.

4. Allow for Price Fluctuations: Ensure there is a significant difference between your minimum price and your base price to allow the system to adjust for demand and special events. For instance, if the base price for a listing is $1,600, setting the minimum price at $1,000 allows the system to adjust downwards when demand is low, while still protecting your bottom line.

Once you've set your minimum price, simply click on the Save and Refresh button. If any of the previous rates were below your set minimum, they should no longer be, and all prices should now be at least your minimum price.

Reminders and Adjustments

Now that the minimum price is set up for this listing, here are a few reminders:

• If you notice that your property is consistently being booked at the minimum price, consider adjusting it to allow the algorithm more flexibility on low-demand days. For instance, if the listing has a minimum price of $1,000 and most bookings are at this price, it may indicate that the system needs to lower the price due to slow demand.

• We closely monitor your minimum price. If we notice that at least 21 available days in the next 30 days are set at your minimum price and it hasn't been adjusted in the last 10 days, we will recommend a 5% reduction. This ensures that your price remains competitive, catering to low-demand days, and helping secure more bookings. We will notify you of this through minimum price nudges.

Minimum Price Nudge Example

Let's look at an account with a minimum price nudge to see what it looks like. Here's the minimum price column and the listing with a minimum price nudge. The system is suggesting reducing it from $80 to $76. If you click on it, you'll have the option to accept or reject this recommendation. You can also click on learn more to understand the reasoning behind the recommendation.

By setting a thoughtful minimum price and staying open to adjustments, you can strike the perfect balance between competitiveness and profitability.

Thanks for watching. And we'll see you in the next video.