Do you use Smart Pricing tool?

[Anthony1658]

Has anyone used the Airbnb Smart Pricing tool?  Has it helped bring in more business?  Is it worth it?

[Title updated by Community Manager for relevancy]

[Maricela57]

Hello @Anthony1658 , I do use it in my Airbnb and it works, does the work for you with comparables in the area.

[Mike-And-Jane0]

@Anthony1658 My experience with this tool has been poor. It seems to overprice for distant dates and then drop to the minimum for near term unbooked dates. As such I would advise keeping a low margin between the min and max prices. Sadly Airbnb doesn't allow these to vary seasonally further reducing the value of smart pricing.

[Megan1210]

Hi Anthony!

We use Price Labs and have found it well worth the $20/month so far! You can set a base price you want it to work from as well as a minimum price if you desire, and it automatically adjusts nightly rates based on your neighborhood competitors, demand, etc. We've had bookings with nightly rates as high as $524/night which we would never had been brave enough to mark ourselves, so we've found it easily pays for itself. Hope this helps!

[Pamela1444]

Hi @Megan1210 , How do you figure out your minimum price?  I have signed up for Pricelabs as well..  My home has been being rented since 2020 but just cut ties with my property manager and have decided to give it a try myself.  It's a learning curve for sure!  Any advice would be greatly appreciated.

[Megan1210]

@Pamela1444 Hi there! Apologies for the delay in responding. Price Labs can help you determine a minimum price based on data for your area, but I'd also do your own market research to collect data of your competitors and what they are charging to be fair, yet competitive. Lastly, take a look at your numbers over the past 4 years to see how well your expenses have been covered to come up with the lowest price you're willing to go for last minute bookings without comprising your expenses or attracting guests that may be disrespectful to the property since they're finding it "cheap". The awesome thing about Price Labs is that it has certainly gotten us higher rates in busy seasons and far out bookings to outweigh the occasional last minute booking that has a low rate. I hope this helps! Best of luck!

[Zach536]

I've found that Smart Pricing with Airbnb is not as aggressive about making you profits as some other software. However, you can play the algorithm game and use it for the first month of bookings. You may find that it will help boost your listing. But I wouldn't keep it. I would convert to a better software. 

Airbnb's tool is all about bookings more than it is about profits. They want every night filled (and the more bookings Airbnb gets the more commissions they get), but if you lower the price too much, then you'll still lose money even though you're booked 100%. 

I use PriceLabs, but I also have my own pricing strategy that I use in tandem with PriceLabs. What you really want is a strategy that uses Dynamic Pricing. This means the prices will increase with demand and decrease when demand is low.

As you get into this business you'll become aware of slow seasons and having the right pricing strategy to charge more during peak season and less during slow season will help you float those slow months, and maximize profits for the year.

Airbnb is an "interest algorithm". So, whatever is going to get your listing the clicks necessary to bump your listing up is what you need to focus on. Good quality photos are the # 1 thing in my opinion followed by one-night minimums. Play by the rules to get "super host" status, and utilize a strategy that gets you usually fully booked and earn another badge called "Rare Find". This will also bump the listing up and create curiosity. All ways to help boost your listing.

Increase your prices for one night so as to detour one-night bookings unless they really want to pay the premium prices. Then start giving discounts the longer they book. This will keep your calendar open for longer stays, and if anyone does book one night, then they'll pay a premium for screwing your calendar up and blocking the availability for longer stays.

My PriceLabs dynamic pricing software made me an extra $1,500 in one weekend just on one listing. It was sooo worth the $20/month. Now I have 4 listings and PriceLabs dynamic pricing is killing it.

[Gary1262]

Hi, I don’t use it. Doesn’t reflect the idiosyncrasy of my local market and low number of Airbnb/demand.

[Sanjay120]

Guest are not using airbnb nowadays 

[Melanie318]

Not as often to do bookings anymore. It is my least popular platform that I use. 

[Melanie318]

@Anthony1658 It depends on what is your priority. Do you want to be book the most nights you can or do you want to get the higher rates.

It goes after getting the most occupied nights, and not getting the best rate.  

I always chuckle when I am loading rates and  it shows what the average rate in my area is and what they suggest my rate range should be. Its never even close to the rates we get  For my one suite it will have suggested rates of 189 - 259 a night  - I sell it at 459 -499 a night, and require a 2 night booking. 

I have worked in the hospitality industry for over 35 years, and I am "old school" yeild management theory.  My reservation system is set to automatically increase rates by a certain % when the booked occupancy hits a certain point.  The closer we get to fully booked, the higher the % increases.   

Same theory that rental cars and airlines use. Though their systems are  more advanced and they track how many times particular dates are searched.  The computer picks up on an increase in searchs for a particular time - even months out and it "flags" the date as a possible "event" time and the increase in rates kicks in at a lower occupancy/booking %. 

[Danny700]

Hi @Melanie318 ,

How did you set up "the closer to fully booked, the higher rate they get"? I'm one week old to airb&b hosting. Thank you in advance.

[Melanie318]

@Danny700 I have a seperate booking system away from Air BnB. I take my reservations from Air bnb and load them into the system. My outside reservation system has the ablitiy to do the rate increase, and yes I have to go in and change my rates on Air bnb when they go up - but its worth it for me to get the higher rates. . Air bnb uses smart pricing- which is their version of a yeild management system.

Here is how they describe it: Airbnb hosts can create their own prices or opt into Airbnb’s pricing tool, which features many dynamic pricing functions. Their tool, Smart Pricing, can be turned on or off whenever you’d like. It analyzes data like local demand, average number of people who view your property, average review scores, and quality of your amenities. Then, it automatically updates your listing price to match the demand, but only within a minimum and maximum price that you set.

[Kimberley94]

Thanks, Kim

[Sally10]

I was hoping to find someone who was thinking like me. I'm So Glad I popped on here! As you said, I completely agree this has been the standard practice forever. Thanks for staying at Old School. I am right there with you !!!