Setting the right price for your experience can be tricky. We wish there was an easy formula to share that would help you come up with the perfect price, but the truth is, your experience is unique, and chances are your pricing will be, too! We’ve interviewed hosts across the globe, and have gathered seven of the top tips from hosts with high booking rates (and high ratings)! Remember, your prices are always up to you. These are suggestions to help you craft the right pricing plan for success.
Consider your target audience
Who are the ideal guests for your experience? It may be helpful to come up with a persona of the perfect guest. What are the personal characteristics of someone most interested in your skill or unique knowledge? What kind of work do they do? What might their vacation budget be? What other activities might they be interested in? What restaurants and bars would they most enjoy?
Consider what this person might spend on an afternoon or night out. You may want to look at the average cost of a meal they might have or another event or experience they might attend. Keep in mind that you want people to take you and your experience seriously, but you also don’t want to price your experience out of the range of your target audience.
Level up for success
When launching a new entrepreneurial venture, it’s important to understand it can often take time to ramp up your success. Many hosts who are just starting out, and don’t yet have an audience or 5-star reviews to help drive guests to book their experience, consider it reasonable to start off with a lower introductory price. This may entice your first guests and help you build up reviews and word of mouth. Also, reviews are influential ‘social proof’, an instrumental force and powerful selling tool, and this can support a slow increase in pricing.
Many hosts also find this a great time to think about the fit of their experience in their market. Enticing guests early on with an introductory price can help you validate your concept. These guests provide an opportunity for you to learn from the first lucky people to attend your event!
Here’s how one host, Travis of Meditation at Land’s End, has created a pricing guide for himself. He took this strategy one step further by coming up with a tiered pricing structure. This strategy allows him to work towards social proof goals that help him test different prices and versions of his experience.
Level 1: Start at $20
- Increase price after 10 reviews
- Low cost, low expectation, large group, people may not show
- Unexpected high reward will create excellent initial reviews
Level 2: $34
- Increase price after 20 reviews
- Solid interest at a fair mainstream price (cost of 2 movie tickets)
Level 3: $49
- Increase price after 60 reviews
- Awesome price helped me make this a realistic source of income as a host
Run a supply and demand experiment
Did you know you can offer different prices for your experience on different dates? Pick one or two dates on your calendar to test a lower or higher rate. If you find guests are signing up for those adjusted experiences, it may be time to increase or decrease your prices to ensure you’re matching demand.
Pro tip: When might the demand for your experience increase or decrease? Jot down a list of times you may want to test your price. Consider local events, seasonality, time of day or week, etc. For example: during Carnaval there may be an increase in travelers coming to Rio, or during January and February there may be fewer people coming to New York City.
Understanding your cost to run
Create a detailed list that outlines all costs to run your experience. Consider the time to prepare, transportation costs, licenses, permits, materials, supplies, tools, venue costs, refreshments costs, etc. What is necessary? What can you purchase in bulk to save money? What can you eliminate while still hosting an unforgettable experience? What could you add to your activity that would, in exchange, cost nothing? Remember, all experiences have a one guest minimum, so try to avoid fixed costs in case only a few guests book.
James, host of See buzz bands with a music blogger in San Francisco, provides a beer, concert tickets, and a perk with no cost to him as a host, a “blog post/playlist/podcast about the lineup before the show.” Since James does research on bands before his experiences, he takes this opportunity to create a unique perk for his guests, a perk that adds value at no additional cost.
“I tried lowering my price, thinking maybe I’d have more people book my experience. I reworked what I offered, allowing me to reduce the fee and this really helped!”
– Gabriela, host of Get to know Little Africa in Rio.
Gabriela initially offered a caipirinha (a Brazilian cocktail) at the end of her first few experiences. She soon realized that this was adding to the cost of hosting and she removed this from the experience. Eliminating this extra cost allowed her to lower her price, increasing bookings, and it had the added benefit of more families booking this experience.
Don’t sell yourself short
Once you understand your cost to run, you’ll now feel more comfortable playing with your price. Of course, you want to make a profit, but you may not want to set a price that scares away guests. After reading your description, how valuable might your guests consider this activity? Some hosts make a point to surprise and delight their guests, this can help with overall satisfaction, but make sure to let guests know the value they’re missing out on if they don’t book.
How do you increase your perceived value? Many hosts find success with a high-quality, thoroughly described experience listing. They focus on the “What I’ll provide,” “What we’ll do,” and even the “Where we’ll be” sections in their experience listings.
Positive reviews may also affect the way guests assess your experience. James says the unique perks he provides have resulted in valuable positive early reviews from guests. Some guests are ready to pay more!
“So much fun!! James is incredibly knowledgeable about the band (and beer and San Francisco). Don’t be fooled by the price!! I can easily imagine myself paying 5x the price and still be happy about the night.” – Hannah
Survey your guests
If you do a test run of your experience with your friends and family, get their feedback on your introductory price. Remember, never ask people what they would pay! They’ll always give you a much lower rate. Alternatively, ask if they would pay $10 or $20 more than what you’re starting off at. If guests gives you an enthusiastic, “Yes!,” then you are probably at a good starting point. You always want to exceed your guests’ expectations; this can lead to more 5-star reviews.
Think about the big picture
You may have the urge to compare your price to similar experiences. However, when travelers are browsing experiences, they might have broader goals in mind. Some may be looking for an activity that can only happen in your city or neighborhood; others may be looking for a memorable Friday night, others want a relaxing weekday afternoon. It may be helpful to think about how your experience could fit into a guest’s trip and compare your price to other things that could fill that time. When guests see a pinball bar crawl, they may really be comparing you to a night clubbing or a concert rather than other pinball experiences.
Also, keep in mind, if you compare your listing to the price of another experience, this doesn’t consider the host may have recently adjusted their rate. You may then base your comparison on an untested price.
The price of your experience is entirely up to you. We hope these tips have helped you consider experimenting with your pricing to help you find the right fit for your guests and your growth as an experience host. Ready to test your prices? Head to your listing and run a test. Good luck!