This article is reprinted by permission from NerdWallet.
Despite what some travelers might think, booking a hotel in advance usually isn’t a good idea. The savings aren’t huge, but booking at the last minute knocks about 13% off the price of a hotel room, on average. But what about short-term vacation rentals like Airbnb? ABNB, -0.49%
NerdWallet looked at real-world booking data for hundreds of Airbnb properties, comparing cleaning fees, long-term discounts and the cost when booking in advance versus short term. This data provides a snapshot of when it was collected in June 2022 and suggests that Airbnbs — unlike hotels — are usually cheaper when booked in advance.
The best time to book an Airbnb
We looked at Airbnb rentals in 10 cities across the United States, comparing prices across three booking time frames:
- Three days in advance.
- Four weeks in advance.
- Forty-seven weeks in advance (almost one year).
We found that booking four weeks in advance yielded the lowest median price.
For this analysis, we only included properties with availability across all time frames. This means the same properties were lowering their prices about a month out compared to last-minute bookings or those made well in advance. The savings weren’t huge, but they were consistent.
Further, we found that most (84%) of these properties used “dynamic” pricing, with rates varying by demand.
This means that 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’s liable to rise and fall over time, just like an airplane ticket.
Plus: 12 ways to adjust your vacation for inflation
So, is booking an Airbnb last minute cheaper?
We recommend a middle path: Booking neither 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 won’t apply in every situation. We took this snapshot during summer 2022, when travel demand was particularly frenzied. This may have driven up the prices for late bookings as renters found themselves in a kind of “seller’s market.” Based on the laws of supply and demand, travelers should expect to see more last-minute deals during low travel seasons and fewer during peak seasons.
Many other factors affect dynamic pricing. According to vacation rental software company iGMS, hosts consider many variables when setting prices, including:
- Seasonality.
- Supply and demand.
- Day of the week.
- Amenities.
- Number and quality of reviews.
So the booking time frame is one factor to consider, but it shouldn’t make or break a travel budget.
Also see: Here’s the No. 1 complaint against U.S. airlines
Airbnb hacks and strategies to avoid overpaying
Unlike hotels and airlines, which constantly compete with each other in search results by offering discounted prices, Airbnb completely controls its search tool. This means that the platform has no incentive to simplify the process of finding discounts or helping users know when a property offers a good or bad deal on any given date.
The onus falls on travelers to do the legwork and avoid overpaying. Here are some tips:
- Look for static-priced properties when booking last minute during peak travel times. These properties offer relative discounts while other hosts are jacking up prices. The easiest way to find static-priced properties is to compare weekday and weekend rates. If they are the same, it’s probably a static price for every date.
- Book in advance, but not too far in advance. Think of this from the host’s perspective: They have little incentive to drop prices in advance when availability is wide open or last minute when availability is limited. Scout prices ahead when you can. When they start to drop, book.
- Don’t wait for long-term stays. The analysis in this article only applied to single-night bookings. But digital nomads or others looking for longer-term stays shouldn’t count on finding months’ worth of availability at the last minute or even within the last few weeks.
Check out: 6 vacation rental alternatives to Airbnb
The bottom line
Airfare tends to get more expensive in the final weeks before departure. Hotels get cheaper, on average. And Airbnbs? They fall somewhere in between.
Our analysis shows that the just-right zone is around four weeks before departure. Yet it will be further in advance during peak travel seasons and may even reverse during low seasons when hosts are desperate for occupancy.
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Sam Kemmis writes for NerdWallet. Email: skemmis@nerdwallet.com. Twitter: @samsambutdif.