Best Price: A key facility in HawaiiChee

October 24, 2018
Hawaii Chee Tips

The pricing comparison engine explained

HawaiiChee is not just another listing site. It is a pioneer in price comparison. Nobody wants to pay more than they need. They hate it even more when a middleman keeps buyer and seller apart, adding an unnecessary percentage to the price.


HawaiiChee was set up to provide a commission-free and fee-free way for guests and hosts to find each other. Early on in the design, we realized that there's only one thing better than providing the best price: it's showing that we provide the best price.


So, that's exactly what we set out to do. Starting with two well known booking sites: Airbnb and VRBO, we match our listings to theirs. When we display the details of a property, we perform an instant look-up to get the equivalent prices on those two sites so that we can display them alongside the HawaiiChee price.


That way, you can see for yourself what a difference it makes to deal directly with the host instead of with an intermediary.


The next thing we ask ourselves is: how big are the price differences and what else can we do with the pricing data? It turns out that the price difference normally ranges from -2% to 35%. What? 35%? How can it be? We thought that there must be some pricing errors so we checked manually on Airbnb and on the property manager's own website. Nope. Those were correct prices!


So, here's an example hawaiichee.com/listings/10766. The first difference we notice is the price per night banner. On HawaiiChee: 179/night. That's an all year round average and seasonal rates vary and, currently, it doesn't include tax or a portion of the cleaning fee, so this isn't a very reliable indicator until you put dates in. I've picked 5 nights from 16 April 2019. Now the per night rate has jumped up to 244. This now includes the turnover fees and taxes. The total for the stay is $1223.


On Airbnb the same property is airbnb.com/rooms/3209150. Without dates, we see 366/night.  When we get a quote for the same dates, the price is based on a nightly rate of 319 and with the cleaning fee and Service Fee the total is $2057.


A view of the price comparison on HawaiiChee.com

 

The same stay quoted on Airbnb.com


If you've got a calculator handy, you can confirm that Airbnb is actually 68% higher on this example. Or, to look at it another way, $834 higher.


Wow. That's some serious commission. Except, of course, it isn't. Airbnb takes a percentage from the host and a percentage from the guest and together, they typically add up to 15% (coincidentally around the same rate that Booking.com and Homeaway charge). So how do we explain the massive difference? It is an extreme example though. Typically we find that Airbnb prices are 9-20% higher than on HawaiiChee while VRBO prices are typically 5-8% higher than HawaiiChee.


It turns out that there are several explanations: Some hosts are highly cautious about taking Airbnb guests because they don't get the opportunity to talk to the guest before a booking commitment is made. The BOOK NOW mentality results in some guests booking unsuitable places in haste. The arrangement unravels either when the guests look at the fine print of house rules and details of the accommodation or when they arrive. All hosts know that their job is more than just selling stays. It's advising guests so that they make a good decision. When that is taken away, the deal becomes high-risk.


Some hosts tell us that they charge extra on Airbnb to cover the higher likelihood of cancellation under terms that are outside of their control.


Airbnb prices are sometimes dynamic. A few hosts use tools for setting prices according to predicted supply and demand. These tools can cause fluctuations of the pricing on Airbnb while leaving the price unchanged on the host's own website.


Finally, Airbnb, at the time of writing, appears to be charging different amounts to different guests! On this example, I was initially seeing a price $47 higher than the price I've shown above. That was when I was logged in to Airbnb. I opened an anonymous browser window and was then able to see the price without the extra $47 in the Service Fee.


Caveat Emptor - as they used to say in ancient Rome!


Ben Friman

Retired at last, with plenty of time to play the piano, except in the ski season!

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