How Smart Pricing Works

[Lizzie]

Hello everyone,

Smart Pricing is a commonly discussed topic in the Community Center and we have heard from many of you that you would like to know more about how it works. So, similarly with our previous topics on Instant Book and How Search Works, the Smart Pricing team have helped answered some of your top questions. Here is what they have to say!

Deciding on the right price to charge for your listing can be a challenging task for anyone. You search your area to see what other hosts are charging, compare your listing to theirs, and wonder how you measure up. But what you don’t know is the price those listings actually get booked for (and how often they, in fact, get booked). You can’t tell how much interest your own listing is generating, or if travelers are willing to pay the price you’re asking. This is where Smart Pricing comes in, by keeping your nightly prices competitive as demand in your area changes. The goal of Smart Pricing is to increase your chance of getting booked.

How does Smart pricing determine its suggestions?

When you have Smart Pricing turned on, your pricing suggestions reflect the controls you’ve set, combined with a lot of data. In fact, Smart Pricing takes into account over 70 different factors that could change your price. These factors, plus your controls, determine the best price for each available night on your calendar, and your price updates to reflect changes in factors like:

• Lead-time: as a check-in date approaches, your price will update
• Market popularity: if more people are searching for homes in your area, your price will update
• Seasonality: as you move into, or out of high season, your price will update
• Listing popularity: if you get a lot of views and bookings, your price will update
• Listing details: if you add amenities, such as WiFi, your price will update
• Bookings history: as you get bookings, your future prices will be partly based on the prices you got for successful bookings. So, for instance, if you set your price higher than Smart Pricing suggests, and you get a successful booking at that price, the algorithm will update to reflect that.
• Review history: Your prices update as you get more positive reviews from successful stays.

There are lots of factors at play—Smart Pricing even evaluates how many travelers look at your listing every day and how long they view it for! We really have built this tool to reflect factors you can’t discover just by simply comparing your listing page to others in the area.

What control do hosts have over setting their prices while using Smart Pricing?

Smart Pricing lets you set your prices to automatically match demand, with the goal of attracting bookings. To make sure you’re always comfortable with your listing’s daily prices, we give you a couple of simple settings to establish the boundaries you’re comfortable with:

• The minimum price you set is the lowest your price will go when demand for your space is low. This means nightly prices may drop to attract more guests to book, but never below the threshold you set.
• The maximum price you set is the highest price your listing can be booked for, even on high demand nights. You can set this as high as $10,000 per night, and it is not publicly displayed. Currently, every listing that uses Smart Pricing must include a maximum price setting.

At any time, if you see prices you disagree with for a date, you can just type a new price in your calendar or adjust your minimum or maximum price in your Smart Pricing settings.

How does Smart Pricing interact with other pricing settings?

Prices guests see can be adjusted based on some other settings you have in place, but not all.  For example:

• If Smart Pricing is turned on, your weekend price setting will not be used. However, we will make sure the recommended price stays above your minimum price setting, including on weekends.
• Extra guest fees and cleaning fees are applied to stays in the same way whether Smart Pricing is on or off.
• Weekly and monthly discounts get applied to the prices on your calendar for longer stays whether Smart Pricing is on or off.

We’re always adding flexibility to Smart Pricing, such as the ability to turn it off for certain days only. And we appreciate hearing your ideas on how to improve this feature. We do this by surveying and interviewing hosts all over the globe, staying current on topics and comments here in the community center, and testing new features with small groups of hosts.

That’s a long way to say, we appreciate all of your feedback and how much you care about helping improve the Airbnb products hosts use every day. Stay tuned for updates.

Feel free to share any comments you have, here in this discussion.

Thanks,
Lizzie

[Lucie58]

Sorry, if this is a duplicate-could not see the posting posted.

Hard to ignore when every time you open up your listing you see "Low listing Appeal". Is it because you are not using Smart Pricing? Or not using Instant Booking? Or you just have a lousy listing? Devastating!!

The listing had 288 views for a portion of November and $5,000+ in bookings; I rented it as much as I wanted to rent it and rented it to my target market. Do I have a lousy listing with low appeal?

I welcome constructive critism, if you have the time: www.airbnb.com/rooms/2062551 .

[Lisa723]

"dogs are not allowed in hot tub" !! Has that actually been an issue??

[April3]

@Lucie87 Great Home! I've never wanted to visit Jasper before, nor did I know where it was 🙂 But your place looks amazing & now I want to go!

My only constuctive critism would be to change the order of some of your photos (for example, your 2nd to last photo is stunning)  As a frequent guest myself, I prefer an order of photos that shows me mostly the interior of the home first, with good attention to the layout of the place, then exterior photos, and then photos of the surrounding areas, views, places to explore, bears, etc. While photos of nature are appealing, I feel that most guests know where they are headed, and would have a general feel for the area, and the the home is the most important to highlight, with your supporting photos being an added bonus. This may just be my personal preference (coming from someone who spends hours/days making wishlists with my friends for our trips, and carefully scrutinizing the layout of a space) but I thought I'd throw it out there!

[Zina12]

Thank you Lizzie. Great article. 

[David126]

First posting I have seen that says no hunting.

[Stay-Comfort0]

hi iam from chennai

[George272]

Hello

What i dont understand is that.For examble I have set a limit price 100 euros and the proposed smart prise is also 100 euros per day for a specific time. For the other had smart prising proposes to me to change the limit prise from 100 to 120 euros. My question is why the smart prise remains 100 euros and doesn't it change to 120 euros automatically independently the limit prise?

Best regards

George Skiadas

[Christy56]

Will someone please tell me how to changethe minimum pricing based on each month of the year?  When I go to my calender and try to change prices based on each month it changes the pricing for all the months.  Also haow can I change the pricing for specific days?  This is all based on using smart pricing as well.  I'm really confused!  Thanks so much!  I already have guests booking this summer based on today's pricing!!!

[Jessica484]

Hello, 

It says smart pricing never goes below the minimum I have set.  Unfortuntely I havd just received a booking that has gone well below my minimum.    

My minimum is £60 per night and my booking is giving me £46.80 per night.

This is well beyond the 13% weekly discount offered.

Can someone please advise??

Thanks, 

Jessica

[David126]

@Jessica484

Turn off Smart Pricing.

[Dained-and-Guillermo0]

I have a minimum price for a reason, it is my break even, less than that amount, wouldn't pay the cost and effort to host under our great customer services standards (breakfast, good quality linen, hight cleaning standards, a prime location where you pay higher taxes and mortgage, a lot of amenities, personalized service providing tourism information, check-in check-out flexibility and so on). So, I get very upset everytime that smart price suggests me to cut my minimal price to half. Please stop that because is very annoying, you are pushing us to work for free like slaves. As someone else says here, I prefer to have my place empty that work for free or provide a mediocre service.
Additionally, you must factor the cleaning fees, some people like me don't charge an extra cleaning fee because we factor that in our complete price, however, it looks like your "smart price" doesn't differentiate within properties with extra cleaning fees and those without.

[Lucie58]

Still get upset every time I open up my listing and I see Airbnb's statement LOW LISTING APPEAL under my tittle ( www.airbnb.com/rooms/2062551 )! Blocked it last week because we had 12+inches of snow and the hill is difficult to navigate with snow/ice. Tonight I found out that the weather was going to be warm during the next 15 days so I unblocked it.

Of course, The Smart Pricing came up to lower the price by about $75. I ignored it and instead raised it by $50 per day. Got a booking within one hour!! it 

[Lucie58]

Guillermo, my advice to you is to take the cleaning fee out of your daily price. You will still get your money but will make your place more marketable.  

[Jo224]

What control do hosts have over setting their prices while using Smart Pricing?

Smart Pricing lets you set your prices to automatically match demand, with the goal of attracting bookings. To make sure you’re always comfortable with your listing’s daily prices, we give you a couple of simple settings to establish the boundaries you’re comfortable with:

• The minimum price you set is the lowest your price will go when demand for your space is low. This means nightly prices may drop to attract more guests to book, but never below the threshold you set.

The above is innaccurate!

I had a minimum price set & I have just received x2 automatic bookinngs for below the minimum price that I stipulated. From looking at the community site, this is a common re-occuring problem.  I have now switched of smart pricing and put a base price.  This is a pity.  It is such a simple facilty to get right as well.  

Thanks

[Mike-And-Nicky0]

I think Airbnb is a great platform and have used it for years.  This past year of 2017 has been probably one of the worst years that I have seen for occupancy rate and pricing.

I think the smart pricing feature is  way off the mark.  My units are upscale units in the heart of Waikiki, and I can no longer rent them for what I used to.  My units rent for around $169 - $189 but smart pricing is suggesting  prices as low as $135 ??   Sure I would rather have some income then an empty unit but I feel smart pricing as a whole is pushing down the prices in our market and it forces you to become even more competitive which Is great for the consumer but not so great for us property owners. 

As more and more airbnb choices show on the market it will continue to saturate the market which will ultimialte lead us owners to look for other platforms to maintain a level of revenue that is sustainable as an investment.   Would be great to have a method of segmenting the class of apartment or the type of traveler?  It seems air bnb is becoming more and more a budget conscious shopper platform which is not the market that I would choose to be in.  

If airbnb  were to average out the property cost, added in with all the other items like property taxes, association fees, property manangment costs, supplies, cleaning, maintenance, then perhaps the site could reflect a better price per night the units should be at.  Whats worse is I recently took a 3 day booking for $135 a night and the customer completly disrespected the unit.