Many hosts believe that lowering nightly rates will attract more guests, and to some extent, they’re right. Cheaper prices can fill your calendar, but not necessarily your wallet. More bookings don’t always mean more profit.
When pricing focuses only on occupancy, hosts often overlook the bigger picture: operating costs, market competition, and missed opportunities to charge smarter. The goal isn’t to fill nights, it’s to grow your bottom line.
The Benefits of Setting Reasonable Nightly Rates
Before you can price strategically, it’s important to understand the relationship between price and profit.
- Profit = revenue – costs
- Price = the amount you charge per night
Your profit is determined by how well your nightly rate balances occupancy and operating costs.
The formula is simple:
Profit = (Nightly Rate × Occupancy Rate) – Operating Costs
Setting rates too high can:
- Push guests toward competitors with better value.
- Create unrealistic expectations that can lead to negative reviews.
- Reduce repeat bookings.
Setting rates too low can:
- Hurt profit margins by leaving money on the table.
- Make your property appear “cheap,” reducing perceived quality.
- Attract short-term bargain hunters rather than loyal guests.
The key is balance, charging rates that reflect both your property’s true value and the market’s willingness to pay.
How to Set Nightly Rates to Improve Your Net Income
Estimate expenses and costs
Understanding your expenses is the foundation of a profitable pricing strategy. Estimating your costs accurately helps you identify your minimum average rate, the lowest nightly price you can charge without losing money.
Your total expenses include:
- Fixed costs: taxes, mortgage or lease payments, insurance, salaries, subscriptions (TV, internet, etc.).
- Variable costs: utilities, platform fees, cleaning, restocking, maintenance, and repairs.
When you know your full cost base, you can price each stay confidently - ensuring every booking contributes to your bottom line.
Research Market Prices in Your Area
Once you know your costs, the next step is to understand where your property stands in the local market. Researching comparable listings gives you valuable context for setting competitive rates.
Look for properties similar to yours on short-term rental data platforms like Beyond’s Market Insights and compare their amenities, guest experience, and booking patterns. This gives you a clearer sense of how your pricing fits within the local landscape.
Note that the following averages are based on Beyond’s 2024 database for nightly stays in major Australian cities:
- Sydney: 68% occupancy | ADR $255 | RevPAN $179
- Melbourne: 66% occupancy | ADR $219 | RevPAN $149
- Gold Coast: 52% occupancy | ADR $362 | RevPAN $195
- Brisbane: 60% occupancy | ADR $311 | RevPAN $193
- Perth: 76% occupancy | ADR $236 | RevPAN $181
- Adelaide: 75% occupancy | ADR $231 | RevPAN $179
These figures provide a helpful reference point when deciding how to price your own listing - balancing competitiveness, occupancy, and profitability.
Use Dynamic Pricing Strategies
Markets move quickly - demand rises and falls based on factors like seasonality, local events, and traveller behaviour. That’s why relying on fixed nightly rates often means missing opportunities to earn more. A dynamic pricing strategy solves this by automatically adjusting your rates to reflect real-time conditions.
Dynamic pricing analyses thousands of signals - booking trends, competitor activity, and regional events - to find the rate that keeps your property both competitive and profitable. Instead of manually updating prices, you can let data guide your decisions.
Leverage Market Data
Market data gives you the visibility you need to stay ahead of change. Short-term rental rates fluctuate constantly - often influenced by traveler demand, local events, and new competitor listings.
By tracking these patterns, you can adjust your pricing proactively instead of reacting late. Platforms like Beyond provide clear, data-led insights that help hosts align rates with actual market performance.
Beyond: Your Trusted Dynamic Pricing Tool
At Beyond, we know that pricing is one of the most powerful levers for short-term rental success, yet also one of the hardest to get right.
Our platform translates complex market signals into clear, data-driven pricing decisions that help you stay profitable all year round.
Here’s how it works:
- Real-time analysis: Beyond’s algorithms process thousands of market data points each day - including demand surges, local events, seasonality, and competitor pricing - to understand how the market is shifting.
- Automated adjustments: Nightly rates update dynamically, ensuring you’re always aligned with true market value.
- Strategic control: You stay in command. Review performance, fine-tune your strategy, or override recommendations at any time through our dashboard or mobile app.
The result is a smarter, more confident approach to pricing, one that moves with the market instead of against it. With Beyond, your pricing strategy doesn’t just fill calendars; it drives measurable growth in your bottom line.
Discover Beyond mobile app today!
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