Price tips are too high

[Richard531]

When liquidating our last few unbooked days in a month, we love the price tips!  However, in some cases, we're finding the price tips to be too high.

When hosts are presented with price tips, the notification says: "Hosts who set prices to within 5% of the price tips are nearly 4x more likely to get booked."  I'm taking that statement very directly.  To me, it says: "Search will show you more, and you will, in reality, have a 4x greater chance of being booked if you price within 5% of we suggest."  If what they're saying is true, that is very powerful.  

My question: Does the statement above (and more notably, the key word "within") mean that if I'm setting my prices more than 5% BELOW the price tip that is proposed, I may NOT get the 4x "more likely to get booked" nod from Search?  So I'm better off with a HIGHER price?  

Do you guys understand my question?  

[Helen744]

@Richard531 I do not think it is a reward system. like a lot of things with Airbnb it is arbitrary .Prices are just not that responsive in your own duckpond . I believe you are better to choose your own prices because there is too many variables. Its best to be aware of when you can go higher or need to go lower but that is so specific to you that I seriously do not think that airbnb are all over it. They often are wayyyyyy out on price for me that i never use it . Its like eleven on the speakers , it goes nowhere . Its a toggle for fools, then again maybe you know something I dont, but seriously ,its revenue raising just not for you.H

[Susan990]

Best method to set prices for your property in your area is to study the competition. Your competition group is all that matters to your business.  Price your place just a few dollars less and use the $59 vs. $60

psychology of price rule and see what happens.

[Pat271]

I don’t think that Airbnb’s recommendations for pricing have anything to do with where they place you in the search. They are just looking at statistics like recent bookings, current traffic to the website, past performance in previous years, etc. and plotting the distribution based on different prices. Then they are saying on average, based on a 5 percent standard deviation, rates within that window get booked 4 times as often.  Throughout the world, on average. As mentioned by @Helen744 and @Susan990, these kinds of assertions are arbitrary, because occupancy performance is highly dependent on the area, the demand, the time of year, etc.

But to answer your question, I don’t think they change your search position based on what prices you set. Also, the “within” means that if your price is say, $400, people who set their rates from $380 to $420 at the bottom end  tend to get booked 4 times as often. I don’t think that Airbnb’s 4x assertion would apply to prices set lower than that, only higher.

[Huma0]

@Richard531 

I agree with the other comments. I don't think following price tips has any correlation to your position in search results. 

Perhaps you are setting your prices too low if the tips are showing you a higher price as it's normally the other way round. Usually the tips are a load of nonsense as do most hosts I've seen post here on the CC on the subject. Right now, I'm not seeing any price tips on my calendar at all, but every time I have clicked on one in the past, it's suggested something stupid so I just ignore it.

Price according to your competition and according to demand. So, if your dates are getting snapped up, especially far in advance, then put you prices up as clearly people are willing to pay that and probably more. If they then start to dive, maybe you put them up too much... You have to play it by ear.

[Huma0]

PS When I search for private rooms in London for a one month stay (I only host long term guests), the search tells me that the average price is £2,455 including fees. My rooms are priced closer to the £1,400-£1,450 mark, despite being nicer and larger than most and in a fairly central location. Still, the price tips always tell me to lower the price and that 'comparable' listings are charging less.

What are these 'comparable' listings, as the only ones I have seen that are vaguely comparable are a lot more expensive. The ones that are as nice but cheaper are on the outskirts of the city. The ones that are as central and cheaper are tiny, sparse, budget places. There is no comparison. 

Also, @Richard531 , in more direct relation to your question, right now, one of my listings seems to be showing high in search results and the other two much lower. Yet, all are a similar price. I don't think the algorithm has any way to really compare prices of 'similar' listings because it isn't sophisticated enough to discern which ones are similar or not.

[Gillian166]

If you have something unique, ignore the price tips. the Algo has no way to determine apples V oranges. in my region i get compared to places that are nice, but not as unique or well styled as what we offer, and then encouraged to drop my price. you can't compare a cottage on a 100acre farm to someone's converted garage that is now a "guest suite", (no matter how pretty it looks inside), but that's pretty much what they do. If i'm fully booked i know i'm either too cheap or in the sweet spot. AI really has a long way to go for those of us with unique offerings.