How to price your room by the hour

There are two bad ways to price a room. Adding up your rent and your gear and dividing by the hours you hope to sell produces a number the market will not pay. Copying the studio down the road produces one that may not cover your costs. The useful method sits between them, and starts with a number most people skip.

Price the rate you keep, not the rate you quote

A studio fee comes out of your rate at payout, so your listed hourly rate is not what lands in your account. Open a confirmed or completed booking and it shows the fee taken and your payout for that session, in money rather than percentages. Look before you price anything: planning on the headline rate leaves every session short.

The guest-side fee is separate and does not come out of your side. Do not describe it to guests as an extra, though: advertised prices already include it, folded into the number shown, so there is no service-fee line for anyone to argue about.

Find your floor

Your floor is the rate below which a session costs you money to run.

• Fixed costs. Rent, insurance, utilities and any loan on the gear, divided by a realistic number of billable hours per month, far fewer than the hours the room is open.
• Variable costs. Your own time if you are engineering, consumables, the extra power and heat, and the cleaning afterwards.
• The studio fee. Add it back on at the end, so the rate you list still clears your floor once the fee comes off it.

There is a platform minimum, shown on the pricing form as you set the rate. It is a floor for the marketplace, not a recommendation for your room.

Find the local ceiling

Look at comparable rooms in your city, and be honest about comparable. A room with a large live space, a maintained desk and a house engineer is not comparable to a treated bedroom, however good the records made in it.

Choose a position, not a number

Between your floor and the local ceiling, decide what you are. Cheapest in town fills the calendar and attracts guests who negotiate. Top of the market means fewer bookings, all of which have to go smoothly. The middle is the hardest place to be memorable.

Before raising a rate, do the sum against your own volume rather than trusting a rule of thumb.

Being booked solid three months out is not success. It is a price signal.

Know when the money actually arrives

The guest pays when the booking is confirmed, but your share is released after the session, once you have reviewed the guest or the 14-day review window closes, whichever comes first. Your bank then takes its own time on top. Price for the month rather than for the week.

Revisit it twice a year

Rates drift out of date quietly. Put a reminder in for January and July and check your booked hours against your floor. Being fully booked is the clearest signal you are underpriced, and it is fixed with a number rather than with more hours.

If whole days go unsold rather than individual hours, the answer may be a day rate instead, which sells a different unit entirely.