Airbnb Hosts Both Love and Loathe Christmas as They Try to Make as Much Money as Possible: 'It's Something We Count on for the Winter Months' 'Tis the season for Airbnb hosts to raise prices.

By Dan Latu

Key Takeaways

  • Nightly rates for Airbnbs spike during the holidays. One Tennessee cabin triples its price.
  • Hosts go all out to woo guests, corralling dozens of Christmas trees and backup turkeys.
  • One analyst said Airbnb owners who don't raise their rates enough are "leaving money on the table."
Courtesy of Melinda Johnson via Business Insider
Melinda Johnson, who runs 29 Airbnbs in the Smoky Mountains of Tennessee, decks their halls for the competitive holiday season.

This article originally appeared on Business Insider.

This year, Melinda Johnson is decorating 29 Christmas trees.

Johnson, who manages 29 Airbnbs across the Smoky Mountains of Tennessee, is going the extra mile to set her properties apart ahead of a crucial winter-holiday season.

Even as the economy slows and inflation cramps spending, people still reach for their wallets to book December getaways. Short-term rental owners, who in some areas have been struggling to make the profits that they'd dreamed of, are ready to take advantage.

Airbnb hosts and property managers see the holiday season as an opportunity to nab big bookings during the slower winter months when people tend to travel less. The last few weeks of December can make up for the seasonal slog.

"It's something we count on for the winter months," Johnson told Business Insider.

Hosts like Johnson will charge as much as they need to — so it's no shock your Christmastime Airbnb costs a pretty penny.

Take one of her most popular properties, a three-bedroom cabin with king-size beds, en-suite bathrooms, and a game room. A typical night in October runs $179. Over Thanksgiving, she brought in $450 per night. For Christmas, the cabin is booked at $650 per night.

In addition to decking the halls with trees, stockings, and more, Johnson and her team hire extra cleaners, at $30 an hour, to scour the rentals before the holiday check-ins, scrubbing tile grout and removing the windows from their frames to thoroughly dust.

'Tis the season for Airbnb hosts to raise prices

The short-term rental market is complicated.

Hosts are still seeing record-high demand for bookings, but average revenue per available room declined 0.5% in October after three years of growth, according to short-term analytics firm AirDNA.

AirDNA economist Jamie Lane said profitability is "harder than ever in short-term rentals," especially for new investors who may have purchased properties at higher prices with steeper mortgage interest rates.

The solution? Charge more at key times.

Some hosts, Lane explained, nudge their nightly rates up and down based on demand, while others set a flat rate for the whole year. AirDNA tracks the difference between the strategies and says there's a clear winner in playing into demand.

"You can get 20% more revenue by actively managing your revenue, your rates, as opposed to just 'set it and forget it,'" Lane told BI.

Graph showing the demand curve for short-term rentals in the US in 2022.

Demand for short-term rentals spikes during the holidays. Courtesy of AirDNA via BI

AirDNA data shows the last week of the year is typically the second highest-income week for short-term rentals, surpassed only by the Fourth of July. It takes on special importance for hosts since it's surrounded by slump periods in late fall and early winter.

Hosts deck the halls to nab the highest prices possible

Los Angeles property manager Austin Weinerman, whose company manages 100 Airbnbs across nine states, puts enough turkeys on hold that every home could be delivered a backup bird if something went wrong.

"We're fully stocked across each market, so there shouldn't be a scenario where someone goes without a turkey," he told Business Insider.

Weinerman also stressed the importance of raising rates to the maximum the market will allow.

A five-bedroom home in South Florida he manages comes complete with a fire pit, a pool, a jungle gym, and an under-the-sea-themed kids' playroom. A typical night there will fall between $400 and $700. But for Thanksgiving, it was listed for $1,500 to $1,700 per night; around Christmas, it will go for $2,000 to $2,300 a night.

"The holidays are some of our biggest-dollar-amount bookings, so it's so important that everything goes smoothly," he said.

Host Ryan Villines, however, told BI that he maintains his base rate of $299 per night for his one-bedroom getaway in the lakeside town of Warsaw, Missouri. He only adds a $25-per-person charge for the holidays to account for large groups traveling together.

He doesn't like to raise prices too high.

"Maybe if I was in Acapulco or somewhere tropical," he said.

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