Unit 3 · Creating Your Pricing Strategy · Lesson 3.10
Defining your test price
The test price is the third and furthest set of prices in the three-step pricing strategy, covering the long stretch of dates where bookings have only begun to materialize. Because more demand is still to come, it is the place to test higher prices: an incremental step up from your control prices, typically guided by the market’s expected occupancy and, for existing listings, a 10 to 20% bump.
The full lesson text below is an edited transcript of the video, published 2026-08-24. The complete course is free at the playbook.
What the test step is
The test step is the furthest of the three steps in the pricing strategy, coming after the hedge and control steps and coinciding with the point at which bookings have only begun to materialize in the market. More of the demand for these dates is still to arrive, and that remaining demand is the opportunity: it gives you room to test a higher set of prices, which is where the step gets its name.
Higher prices do not necessarily mean a high price position relative to your comp set, though. These are still low-season dates, so the sensible starting point is an incremental increase from your control prices. Keep in mind that the prices defined here are minimums, and that the test step is not just the furthest period but also the longest of the three. Once these minimums are implemented in a dynamic pricing tool such as PriceLabs, a lot of your actual prices should sit above them.
Test prices for new listings
For a new listing, the recommendations in the strategy sheet give an initial idea of the numbers. If you need more guidance, use the percentile equivalent of the market’s expected or historical occupancy as the basis for your positioning. Expecting 50% occupancy, for example, you would target a price position aligned with or close to the 50th percentile of the market, the median.
The sample new listing from the earlier steps shows the process end to end. Its hedge prices were aligned with the sheet’s recommendations, while its control prices took a more conservative line because of the occupancy the market was expected to deliver. The test prices follow the same approach, landing a little below the recommended numbers, because the goal is an incremental increase from the control step while still targeting a position close to the expected occupancy’s percentile equivalent. That produces $160 for weekdays and $280 for weekends, a 14% and a 12% increase respectively over the control prices.
Test prices for existing listings
For existing listings this may be the simplest of the price sets to define, because the earlier steps already did the heavy lifting: the control prices factored in both the market data and the listing’s own booked prices. The test price is therefore based directly on the control step, with an incremental increase of 10 to 20% as the recommended target.
On the sample existing listing, which had performed decently and whose control prices already reflected its booked rates, that produces $280 for weekdays and $360 for weekends. Against control prices of $240 and $300, that is a rise of about 17% on weekdays and 20% on weekends: both inside the target band.