Airbnb Answers: Pricing suggestions

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Airbnb Answers: Pricing suggestions

Airbnb Answers Pricing Article.jpg

 

You asked: You're constantly pushing me to lower my price—why? Who are you comparing me to?

 

This was a top-voted question that we answered at the July 2018 Host Q&A, and it comes up often, so we’ve captured the answer as well as some updates for you here. Let’s dive in.

 

You’re always in control of your listing price

It’s important that you know you’re always in control of the price you set on your listing. You can decide based on your business goals and risk tolerance how high or low to go, and when to change that price to encourage bookings or to maximize your profit. Our intention behind offering pricing suggestions is to give you the information you need to help you get bookings, and adjusting your price is often the most effective way to do this. The goal is to dial in a price for your listing that matches what guests are searching for—and willing to pay for—at the time of their trip.

 

Pricing suggestions when demand is low—and when demand is high

We have some updates to share about how we’re developing and delivering the information you need to price your listing competitively—both during low and high demand seasons. The pricing tools we build are intended to help you boost your income by getting bookings. Historically these tools have focused on helping you set a competitive price when demand is low. See, when demand is low, setting a lower price is more likely to get you bookings. Some of you may prefer to keep your price higher even if that means your place goes unbooked, and of course that is absolutely okay. You’re always in control of your listing price.

 

Some of you have told us that the suggestions you get are sometimes so low you question if it’s worth continuing to host on Airbnb. Please know that we value you as the core of our community—there’s no Airbnb without Airbnb hosts! Our intention is only to give you the most reliable information we can gather, so you can make informed business decisions that work for you. Our pricing suggestions may not always capture the nuances of how you host, or what makes your space unique. That’s why it’s important to add a minimum price that ensures Smart Pricing only gets you bookings at prices that are worth it for you. We might still send you suggestions below that minimum simply to keep you informed about what price we believe would get you bookings. You’re free to ignore these if they don’t work for you. We also understand that this is not always welcome information, so we’re working on ways for you to let us know if you’d like fewer, or no, notifications in your inbox.

 

So we’ve talked about pricing suggestions when demand is low, but what about when it’s high? Indeed, many of your calendars are quite booked up. And what you really want are tools that help ensure you’re not leaving money on the table by charging too low a price when there’s plenty of demand. That’s why we’ve spent the first half of 2018 working on this problem and have launched improvements to our Smart Pricing suggestions to be more in tune with the market during periods of high demand.

 

The updated model looks at the previous years’ Airbnb data and the relationship of demand (bookings) and the prices of the booked listings in your area. Your Smart Pricing suggestions will now do a better job of taking these factors into account. This is just the first step. We’re still working on more ways to make our pricing suggestions better suit your goals, and ways to give you more market data rather than suggestions, so you can make informed pricing decisions. We’ve started testing these new ideas this summer.

 

How your space is compared to others

Some of you asked about how your listing is compared to others. When it comes to comparisons, we look at your listing through the eyes of guests and compare it with other listings that are successfully booked. In addition to finding listings that host similar numbers of guests and are close to your listing’s location, we look at what guests click before and after visiting your listing. Sometimes you’d be surprised (and we are too) at what guests perceive as comparable.

 

Next, we try to make sure your listing is compared to other listings that are successful and competitive. Unfortunately, many listings on the platform receive few bookings, especially in periods of low demand. We realize that most of you compare your listings to others by searching as guests in your area, and this can yield very different results than our comparisons. This is because it’s hard to assess how successful listings are with just a search. Moreover, if you search with dates, you’ll typically only see listings that have not been booked. These listings tend to be priced less competitively than the ones that have already been booked for those dates. So if you’re looking only at available listings, you have no way to tell if they’re getting booked successfully, or if their prices may be too high.

 

Despite all this, sometimes our model still doesn’t take into account all aspects that are important to you in your comparison. That’s why we’re continuing to expand the way in which we think about comparisons and are working to increase the relevance of our tools and suggestions.

 

Improvements on the way

Thanks to your feedback, we’ve made some strides in how we calculate and deliver pricing suggestions. Here are a few things you can look forward to:

  • We’ve made improvements that will reduce the number of pricing-suggestion-related emails you get by up to 15%
  • We’ve added prompts for you to give us direct feedback on our emails to you, so we can make sure you’re getting the information you need, when you need it
  • We’ve improved the consistency between messages you’re getting regarding pricing
  • We’re working on an exciting feature that will give you up-to-date market information for each calendar night. This feature will take into account things like how many guests are searching in your area, how many of these guests have already booked, and what prices nearby listings are getting booked for.

 

Stay tuned for even more pricing news during the next Global Host Q&A, which will air on October 10 2018.

140 Replies 140
Craig112
Level 6
Newport Beach, CA

Last thing for now...

I need and want to be able to add line item costs/expenses. For instance the City of Newport Beach charges me a 10% bed tax. I could build that into my pricing but showing it as a separate line item at the time of booking allows me to have realistic pricing as a base price. By the way, VRBO does allow line item expenses/costs.

Valerie152
Level 5
Las Vegas, NV

VRBO also has a Pet Fee item/expense. They have had this for years but Airbnb still doesn't offer that to owners. I struggle with getting paid by guests and having to repeatedly follow up with them. Your guess is only as good as my on what I would be penalized if I cancelled a guess because they refused to pay the pet fee after they already booked and then told me they were bringing a pet. 

John1784
Level 2
Thame, United Kingdom

Having read the article and some of the posts it seems that Airbnb may be spending an unwarrented amount of effort in something that is not needed.  Mosts hosts seem to have found a way of judging what is a fair price for the work they put in to providing a pleasant stay for guests.

I would like Airbnb to spend a little time on improving the way the prices are presented to the would be guests.

 

For example, I have one single and one double room in the same property available for guests. This presents me with four scenarios . A single guest , two guests sharing one room, two guests one in each bedroom and three guests.  At the moment I have to advise two guests that want a room each to book as three guests as I price per room and not per person.  This advise is very often overlooked by would be guests as there is so much information to digest on every listing.

 

It would be good to have more control over the pricing that appears on the listing.

We are new to Airbnb and already looking at leaving and getting business through our own advertising & other sites. 

To view our property using the exact location of our town  your site usually brings up 17 pages or 300 properties which are kilometres away, some taking over an hour to reach from the location and our  propety doesn't even show on your listings!.

We are a new build (Feb 2018) right on the waterfront Two storey, four bedrooms (2 King beds & 2 Queen beds) two and a half bathrooms, high ceilings, ducted reverse cycle air throughout, double glazing, slow burning combustion fireplace, top appliances, we supply the first breakfast, welcome champagne etc and NO expense spared for guests comfort.

Our price is higher than those around us and  those showing in the list of 300 properties for a REASON! and yet Airbnb chooses not to include our home but goes for cheaper ones which don't even compare in number of rooms, bathrooms, amenities, quality etc. Many are showing as waterfront homes & are streets back from the water.  

Our greatest disappointed as stated is that MOST of the homes showing in the list are not anywhere near our location. 

Being new to Airbnb since June, we currently have no reviews...however our first booking is this weekend for 5 nights. Our concern is that if Airbnb only shows listings for properties with lots of reviews how will our property, or others, ever get booked when people searching don't even get to see them. 

 

 

Alex349
Level 2
Saint-Bonnet-Tronçais, France

Frances, ( 1st page )  .......I agree with you entirely !

In some cities, like ours--Madison, Wisconsin--we are limited to hosting 30 nights out of the year (if we're not on site).  Therefore it's important that we are able to set prices accordingly.  

Elle52
Level 2
Cedar Rapids, IA

Airbnb, you are still missing the point.  You are only interested in numbers.  How 'bout you *show* us the listings that you compared us to?  If you're going to continually suggest we lower our prices, *show* us pictures of why you think that!  At this time, I personally don't care how many guests book for $20 a night less than I'm asking if I don't know what kind of space they are booking.  I have a 3000 square foot house with garage parking, a deck, a patio, a fenced yard, a master bedroom with ensuite that includes a jetted tub, a furnished kitchen, 3 bathrooms, etc etc.  It would be better to know if you think I should lower to meet the price of a double bed in an upstairs apartment

#StayTranquil
Philipp147
Level 3
Luzern, CH

Hello everyone,

 

Even though I am new to hosting, I already know now, that an alogarithm can only estimate the value of a place to a certain point. And I think that's also clear to AirBnB. Our house is double the price that what AirBnB suggest, and I think it's still a fair price.

 

Also simply ask yourself, how much would it be worth to you, staying there?

Sarah977
Level 10
Sayulita, Mexico

@Airbnb   The places shown as "similar listings" to mine are anything but. Most are $20/night more expensive, one is a truck on the beach (as compared to my well-appointed private bedroom with private bath and full kitchen usage). And the pricing suggestions are absurd. My place is already budget priced, I get lovely guests who all tell me my place is great value. I get pricing suggestions that I should charge $19/night. In a major Mexican beach tourist town. Between cleaning, providing coffee and other amenities for my guests, picking them up at the bus stop and driving them back there with their luggage when they check out, plus the cost of utilities, laundry, etc, it costs me at least $9/night to host. I should do all this for $10/night? It's insulting. 

ALGORITHMS DON'T WORK FOR THESE THINGS. They never will. You can't compare listings unless you have first hand knowledge of the area and the listings.

Cor3
Level 10
Langerak, South Holland, Netherlands

Why do these messages never say: People have looked at your listing, but booked somewhere else at € 20/night more.

Airbnb seems so convinced that price is the absolute top motivating factor for making the decision, which listing to book. But I’m convinced this is absolutely not always the case.

Of course price is important. But there are many other factors involved in deciding, which listing to book (as so many here, have stated already). Basically, it is a mix.

We always ask our guests, why they booked with us. And no one has ever said: You were the cheapest.

In our early days, we were relatively low priced. So some mentioned price then, as part of other decision factors. Since then we have significantly increased our prices. And we are still getting bookings. Guests mention about anything, but hardly ever price. The ones that still mention price are typically newbies, which compare us to a hotel. I.e.: Book our 2-bedroom apartment or 2 rooms in a hotel.

 

At the last Q&A, Laura Chambers mentioned, these were the top-3 drivers for booking a listing:

  1. Price
  2. Reviews
  3. Photos
Selia1
Level 1
Houston, TX

 I have found that lowering my price brings in people who don’t value my accommodations. The less I charge the more destructive people attract.

Robert906
Level 4
Jelsa, Croatia

I have noticed that when I gave discount (or lower price) to guest I get only problems. Sometimes it is bed review, sometimes they brake something, sometimes they stole something... But when i set regular price I don't have qany trouble with guests. 

And at the end when i make calculation with all damages included i can conclude that it is better to have lees reservations with higher prices then all days reserved with guests which will make damage to me.

Sergio566
Level 2
Rio de Janeiro, Brazil

Actually, EVERYTHING on Airbnb takes into account the mediocrity. If you do something special for your guests, this is not considered when they make these ridiculous comparisons. Ths system does not reward you for your differentiated hosting, at the end of the day it makes no real difference for them if you are a regular host. If you are a real superhost, it's because you like to go beyond the usual things, not because Airbnb will recognize that somehow!  

Surendra4
Level 2
Lucknow, India

Hi, I also do not know that with whom are you compairing rates?

Most of hotels, guest houses, homes only provide rooms with bath rooms without any servant services. We are providing room, lobby, Modular Kitchen (independent) and bath room with all goodies and servant services. How can you compare the prices with ours? We also provide accomodation with 2 rooms, looby, 2 bath rooms, Modular Kitchen, Terrace garden which is good for 4 guests. Here also question arises that how can you compare prices for this (with 4 guests) with a room meant for 1-2 guests? Again coming back to main point what is the criteria for the smart pricing? Do you take all these factors into consideration when you compare or suggest prices? Thanks

Surendra4
Level 2
Lucknow, India

I understand that airbnb is working very hard but there are some issues like rates comparison, host resposibilty need to be addressed immediately. They have very good website, easy to follow. Thanks