This article is reprinted with permission from nerd wallet.
Despite what some travelers may think, booking a hotel in advance is usually not a good idea. The savings aren’t huge, but a last-minute booking reduces the price of a hotel room by about 13% on average. But what about short-term vacation rentals like Airbnb? ABNB,
NerdWallet examined real-world booking data for hundreds of Airbnb listings, comparing cleaning fees, long-term discounts, and upfront booking costs to short-term bookings. This data represents a snapshot of their June 2022 survey and suggests that Airbnbs — unlike hotels — are typically cheaper when booked in advance.
The best time to book an Airbnb
We looked at Airbnb rentals in 10 cities across the United States and compared prices across three booking periods:
Three days in advance.
Four weeks in advance.
Forty-seven weeks in advance (nearly a year).
We found that booking four weeks in advance resulted in the lowest average price.
For this analysis, we only considered properties with availability across all periods. This means that the same accommodations lowered their prices about a month in advance compared to last minute bookings or those made well in advance. The savings weren’t huge, but they were constant.
Additionally, we found that most (84%) of these properties used “dynamic” pricing, with prices varying based on demand.
That means most hosts adjust prices based on availability and other trends. As a guest, this means that you should never consider the “price” of a property to be static. It can rise and fall over time, just like a plane ticket.
plus: 12 ways to adapt your vacation to inflation
So is the last minute booking on Airbnb cheaper?
We recommend a middle ground: Don’t book many months in advance, nor a few days before check-in, but somewhere in between. This offers the lowest typical rates according to our data.
Keep in mind that this rule of thumb does not apply in every situation. We took this snapshot in the summer of 2022, when the demand for travel was particularly high. This may have pushed up prices for late bookings as tenants found themselves in a sort of “sellers’ market”. Based on the laws of supply and demand, travelers should expect to see more last-minute deals in the off-peak season and fewer in the peak season.
Many other factors affect dynamic pricing. According to vacation rental software company iGMS, hosts consider many variables when setting pricing, including:
Supply and demand.
Number and quality of reviews.
So the booking period is a factor to consider, but it shouldn’t make or break the travel budget.
See also: Here is the #1 complaint against US airlines
Airbnb hacks and strategies to avoid overpayments
Unlike hotels and airlines, who constantly compete with each other in search results by offering discounted rates, Airbnb fully controls its search tool. This means the platform has no incentive to simplify the process of finding discounts or helping users know when a property is offering a good or bad deal on a given date.
Responsibility rests with travelers to do the legwork and avoid overpayments. Here are some tips:
- When making last-minute bookings during peak travel times, look out for fixed-price accommodation. These accommodations offer relative discounts while other hosts increase prices. The easiest way to find fixed price properties is to compare weekday and weekend prices. If they’re the same, it’s probably a static price for each date.
- Book in advance, but not too far in advance. Look at this from the host’s perspective: they have little incentive to lower prices up front when availability is wide open, or at the last minute when availability is limited. Scout prices in advance if you can. When they start to fall, book.
- Don’t wait for long-term stays. The analysis in this article only applies to one-night bookings. But digital nomads or others looking for longer-term stays shouldn’t expect to find last-minute, or even within the last few weeks, month-long availability.
Cash: 6 vacation rental alternatives to Airbnb
The final result
The fare tends to get more expensive in the last few weeks before departure. Hotels are getting cheaper on average. And Airbnb? They are somewhere in between.
Our analysis shows that about four weeks before departure is exactly the right zone. However, it will be further ahead in peak tourist season and may even reverse in the off-season when hosts are desperate for occupancy.
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Sam Kemmis writes for NerdWallet. Email: firstname.lastname@example.org. Twitter: @samsambutdif.