If you’re a user of Airbnb, you’ve likely noticed that prices aren’t exactly static. They usually change depending on the season (summer prices tend to be higher) and whether there’s a special event coming up.
With Covid restrictions easing up and people starting to travel more, concerts, festivals and events are also back on. And Airbnb prices have been rising to match the higher demand.
In a recent report, the mortgage experts at money.co.uk looked at the events in 2021 with the biggest impact on Airbnb pricing. So, how much do prices rise? And is it fair that festival-goers should pay more? Diana Bocco takes a look.
What events impacted Airbnb prices in 2021?
According to money.co.uk, the biggest Airbnb price increase of 2021 happened during the sailing event known as Cowes Week on the Isle of Wight. The average price in the area is usually around £91 per night, but during the event, the price went up to £369 per night.
That’s a massive 305% increase during the event week. According to money.co.uk, one of the main reasons for the significant price change is that accommodation on the island is limited and that those attending the event can afford the massive increase.
The 2021 Open Championship at the Royal St George’s Golf Club in Kent also saw significant Airbnb price increases. The average price just one week before the event was £250 per night, but during the week of the event, prices went up to £611 per night.
Other 2021 events that saw significant Airbnb price increases include the TRNSMT Festival in Glasgow (105%), the UEFA Euro 2020 Final in London (104%), and the Parklife festival in Greater Manchester (91%).
What about holidays in general?
The money.co.uk report also looked at holidays throughout the year. However, the increase in Airbnb prices at these times isn’t as significant as it is during events. For example, prices see an average increase of about 8% during Christmas weekend. The summer bank holiday at the end of August and Halloween both see an average increase of just 6%.
Is Airbnb pricing fair?
Rising prices to match increased demand is basic economics. Airbnb policies allow for dynamic pricing. Basically, it means that hosts can raise their prices at any time, for any reason to maximise profits. This can be scheduled to change seasonally, but can also be done manually for special events throughout the year.
According to vacation rental software company iGMS, dynamic pricing helps hosts earn up to 40% more than they would if they had to commit to static pricing.
Whether dynamic pricing is fair or not depends on who you ask. Consumers might object to a sudden price increase because of an event. They might also become frustrated with inconsistent prices and consider the practice abusive. Dynamic pricing doesn’t have a significant effect on wealthy consumers. They will be able to afford even significant price adjustments. However, the ‘average’ consumer might not be able to afford such increases.
How can you deal with increased Airbnb prices?
If you’re attending a popular event, it’s likely that both hotel and Airbnb prices will increase. While there’s nothing you can do about that, booking your reservations two to three months in advance will provide you with more choices. For example, the cheaper hotel rooms and Airbnb rentals will likely go first, so book early for the best deals possible.
You should also search for accommodation just outside the event area. The closer the listings are to the action, the higher the prices. You’ll definitely pay for convenience.
Finally, if you have a travel credit card, check whether you have discounts or rewards available. Even a small discount can pay off when prices are so high.
The post Is it fair that Airbnb owners charge over 100% more during festivals? appeared first on The Motley Fool UK.
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