Smart pricing WAY undervalued our place!

[David-and-Annie0]

Help! 

We are completely brand new to airbnb and just listed our place for the first time a few nights ago. We put it on "smart pricing," assuming airbnb would calculate appropriately, went to bed, and then woke up with 10 bookings! Exciting...until we figured out why. All of the most desirable dates got scooped up b/c our dates were priced WAY too low! We were relying on airbnb's "smart pricing" and naturally figured it would increase the rates for the busiest times of the year. I mean, come on, someone booked our place for $244/night on Christmas!!! We are so upset about this. Other comparable houses--and many not as nice--are getting 3-4 times that! What can airbnb do to make this up to us?
People already jumped on our place and booked all the extremely desirable weekends in Dec and Jan, as well as Thanksgiving. We are literally missing out on THOUSANDS of dollars, and are considering just pulling the plug on Airbnb. Isn't there anything that can be done?

Airbnb--with "smart pricing" had every day at our house in Dec and Jan set for only $287 per night--and some nights lower, even. That is just crazy! How did this happen? How is that "smart pricing?" Cabins that are much smaller than ours (and not in as desirable a location) are getting $500/night. This is just outrageous! Is it because we are new and have no ratings?

After doing a bunch of research on comparable places, I feel devastated. I have called and messaged airbnb and they are not very responsive/helpful. We are considering just pulling the plug on airbnb, but we hate to burn that bridge, we're really looking forward to managing this ourselves. If we cancel all of our reservations, there is a $50 penalty for each (which would be worth it b/c we stand to make much, much more if we "reset.") But then--as I understand it--we will never be able to achieve "super host" status and these canceled reservations will go as black marks against us. 

Please help us figure out what to do...It's true that I can't see what other places that are already booked up for Dec and Jan are charging, so it's possible what I'm seeing that is still available are charging too much--hence why they're not booked yet....? --but our rates just seem crazy-low. Any help or advice is greatly appreciated! Thank for reading this.

-Annie

[Anonymous]

@David-and-Annie0  Turn off "smart pricing" and set your own prices.

Or, at the very least, specify a realistic minimum for your smart pricing slider.

Some decisions are best not left in the hands of robots.

[David-and-Annie0]

Yeah, for some reason, we figured airbnb would be really good at pricing our place appropriately because they have all the data and tons and tons of experience with rentals. Now we know it's not to be trusted. Rookie mistake on our part (and I admit we should have done more research). We'll have to eat it and try really hard not to think about the some $5000 or so we're missing out on. 😞

[Emiel1]

@David-and-Annie0 

You are responsible for the pricing of your listing. When using "Smart Pricing' you can set the lower and upper limit. You can check in the calender exactly what prices are set for which dates. You can simulate bookings on your own listing to see what people is offered, especially recomended to do when it comes to "most desirable dates".

Quote "We put it on "smart pricing," assuming airbnb would calculate appropriately, went to bed".

I am astonished ! Hosting is a serious business, not a computergame !

As a new host you also better turn off "Instant Book"

https://www.airbnb.com/help/article/523/what-is-instant-book

BTW

If you cancel the bookings, the originally reserved dates wlll also be blocked by Airbnb, so they can not be rebooked (on Airbnb).

I  am sorry, but i fear you have to continue with the reservations and learned an expensive  lesson.

Unless you can convince Airbnb  you made a hugh mistake, so they are willing to cancel the reservations penalty free for you. 

best regards,

Emiel

[Lisa723]

@David-and-Annie0 to be blunt, rookie mistake. Smart pricing is notorious for wildly underpricing.  (Note that Airbnb has an inherent conflict of interest here; since their own guest fees are variable and the formula to compute them unpublished, if they can lower your price they can raise their own guest fee without charging guests more in total.)

If you start canceling guests or trying to raise prices retroactively your listing will be in trouble. Instead maybe try to use the low-priced bookings as an opportunity to accumulate excellent reviews-- those first few reviews are critical to your future success, much more important than short-term earnings.

I've had really great revenue results with pricing by usewheelhouse.com.  There are other good third-party automatic pricers such as beyond pricing.  But hosts are always responsible for their prices, and I'd never let any automatic pricer operate unsupervised.

[David-and-Annie0]

Yeah, very hard-to-swallow lesson learned on our part. And definitely we should have done lots more research and not been in a hurry to get it listed. Thanks for the recommendation of usewheelhouse.com, very helpful. We'll just have to take the loss now and try not to think about the thousands of dollars we're missing out on this time. I must say, so far I'm not too thrilled with airbnb--their set-ups or their customer service.

[Lisa723]

@David-and-Annie0 yes, Airbnb is a tool, not a teammate.

[Emily487]

@David-and-Annie0 

What a beautiful house! I'm so sorry that you got hit with the Smart Pricing curse. 

-I just checked and I think your Smart Pricing is still on. I put in 8 people for 3 nights and it came to $287/night (that's what the 2 bedroom duplex next to ours rents for in the middle Kansas City on the weekend). 

-Make sure you are not offering this as a place to those displaced by the wildfires until you have more time with AirBnB under your belt (there was an ad at the top of your listing that said something about wildfire placement but this might just be automatically put on all nearby listings). 

-You have your security deposit set at $500 but you mention that is is $1000 somewhere else in your listing. Make sure you update it to $1000.

-Make sure you have "instant book" turned OFF. 

-You might want to change your cancellation policy to strict. 

[David-and-Annie0]

Thanks for responding and your thoughtful remarks, Emily.  So, you don't think instant booking is a good idea? I have it on that because I like that people have to be verified (have a gov id, history of reviews, and have to send me a message to me about themselves and their trip plans). If I keep it on "request to book," anyone can request. I can deny their request, but airbnb told me if I do that a lot, our "response rate" as hosts goes down. But maybe that's not such a big deal?

Also, I did change our wkend rates where I could, but during the week it is still set at $287. Do you think that's too cheap?

[Emily487]

@David-and-Annie0 

Instant Book:

I use instant book for the same reason you do- if you get a booking you don't like (bad vibes, bad reviews that you discover later, they want to bring their 17 cats with them, they say they are going to do something that is explicitly prohibited in your listing) you can call AirBnB and have them cancel without penalty. I've done this a few times when locals book even though the top of my listing states that we don't host locals. 

But I think that as a new host with a MUCH nicer house than I, there might be a trade off in having everyone "request to book"...you will get to message back and forth and have a conversation with them, ask them specific questions about who will be with them, what brings them to the area, have they ever use a vacation home before, are they comfortable using a fireplace safely....I think this gives you a much better idea of who they are, what kinds of guests they will be, and they will see you as an individual as well. They just tend to feel more invested in their stay and in your conversation you can steer them away from your listing if you realize they aren't who you want....the trick is to be comfortable asking them to withdraw their request if you decide you aren't a good fit so you don't get penalized when you "decline" them. 

Pricing:

I don't know what your area charges but I will say that for 8 people, that would be a STEAL even here in the middle of Kansas City. You can adjust your listing so that  the price increases with each additional adult guest added to the reservation. Maybe that would work for you? I agree with @Emilia42 , you should set your price to match the nearby vacation homes even for the weekdays. 

[Susan1028]

@Emily487 

You manage a lovely listing.  Congratulations on so many great reviews.  I'm so glad instant book is working for you.  The property owner is quite fortunate to have someone like you they can depend on to be their eyes, ears, and supervision.

My situation is different than yours, and I have another perspective on instant booking and the "unpunished cancellation" aspect promoted on this platform.;  after 30 years in customer service, if you say yes, then no, you alienate the customer for the long term and quite possibly everyone they speak with about it along with a glitch mentioned in several posts in the hosting community that once booked, guests can leave host reviews even if they end up not staying, and airbnb allows these reviews remain and be counted towards your ratings and placement in searches.

Airbnb encourages instant booking to increase bookings and revenue, and although they say a "verified ID" has been provided,  it clearly states in another area of the terms of service that they do not do an actual ID/background check or provide liability coverage if something goes wrong and that 3rd party bookings and unregistered guests are strictly the host's problem. 

I live remotely with no law enforcement close by, in a separate private space on the property (which is  my greatest asset), and care for an elderly relative I cannot expose to risky or disrespectful behavior. 

It is for these safety and liability reasons I have additional STR rental coverage, choose to not to instant book, and personally vet each guest. 

I use an upbeat, conversational, and documentable  approach to each 'request to book' via messaging to screen carefully for safety, transparency, liability, communication style, agreement to house rules, answer any questions, and read their previous reviews and any profile narrative to discern any "red flags" and evaluate whether the guest is a good fit and likely to enjoy what I offer. 

 I make it clear I will welcome them at arrival, live on the property, and am available if they need anything during their visit. (Which rules out sneaking in extra/unregistered guests, parties, and bad behavior in advance).

Choosing to personally screen each set of guests has yielded the information I need in advance for the "right fit" 99.9% of the time, and a consistently high booking rate with a demographic that's very much enjoyed my space respectfully.

Guests seeking a less personal approach (for whatever reason) withdraw before the booking is approved with everyone's dignity and ratings intact, and are free to find a better fit, with no hard feelings and the confidence that if they do choose my kind of experience in the future, we've already "broken the ice. "

Safety and respectful occupancy are my #1 concerns.  The system I employ is what has been working best for me.

[David-and-Annie0]

I have ours set on "request to book" now, but my understanding is that if I decline them, it still goes as a mark against me in terms of my "responsiveness rating." I don't know if that's a big deal (if it will negate me getting superhost status or whatnot), so I'm still afraid to decline people. But once I found out that with instant booking people with bad reviews can book and there's not much I can do about it, I changed it!

[Lisa723]

@David-and-Annie0 yes, declining requests may have some negative consequences. Until you get on your feet that may be better than the consequences of stays gone sideways, though.

(My method is "yes, if" :  I accept virtually every booking request provisionally on whatever condition I require, and tell the guest they have 48 hours to cancel penalty-free if my condition doesn't suit them. I also use instant-book. But my house rules and so forth have been fine-tuned by experience to hopefully head off guests I don't want.)

[Anonymous]

@David-and-Annie0 @Lisa723  Has anyone here actually experienced the "negative consequences" of declines that are the subject of so many vague warnings?  At no point have I ever met the Acceptance Rate target, but aside from a little alert on the dashboard nothing has ever come of it.

Seems  more like a hollow scare tactic to me.

Note: Acceptance Rate and Response Rate are not the same thing. You do have to respond to all of your inquiries and requests within 24 hours. The "requirement" to accept 88+% of them is fictitious.

[Lisa723]

@Anonymous it factors into search ranking:

https://www.airbnb.com/help/article/39/what-factors-determine-how-my-listing-appears-in-search-results