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]

@Lisa723   It's one data point among hundreds of factors (most of them surely not disclosed in that help article) that may or may not figure into how a listing is placed in an unfiltered search for your area.  But trying to game the search results is an exercise in futility - especially considering that no two searches will yield the same results. And besides, your best bookings are going to come from guests who filtered their search to find the best fit, not ones who just typed in the name of your city and clicked on the first thing that came up.

For a relatively new host without your degree of experience or your real estate portfolio, the consequences of one bad booking are tangible and potentially devastating, compared to the vague possibility of slipping behind other listings in search. I find it tactless on Airbnb's part to even allow a new host to activate Instant Book, let alone to pressure them into using it before they know what they're getting into. So while I totally respect your approach here, I really have to push back against it as advice for the less experienced. @David-and-Annie0  have a big house in driving distance from LA, and no reviews - they are the absolute epitome of a magnet for con artists and party pimps.  Any suggestion that they not screen their guests carefully and control their pricing would be horrible advice.

[Lisa723]

@Anonymous my "real estate portfolio"? Ha. 🙂  Re. advice for the OP I don't disagree with you (and thought that was pretty much what I said).

[Anonymous]

@Lisa723  Indeed, my beef is really with Airbnb for scaring hosts into making decisions that aren't in their best interests and glossing over the risks involved.

[Rebecca181]

@David-and-Annie0  And do be aware: The security deposit is phantom and fictitious. NO monies are held on  your behalf and if you ever needed to collect on it, you will likely be very disappointed with the results. Same goes for the Host "Peace of Mind" Guarantee as well. Some of us hosts who have been here awhile call that "Newspeak". Same goes for Airbnb's "Trust and Safety Dept". 

[David-and-Annie0]

That's disappointing to hear. :(. Maybe we should just go with a management company... So what do we do if a guest breaks something or something goes missing? We can't charge through airbnb? Even when we clearly list a deposit?

[Anonymous]

@David-and-Annie0  You can't charge anything through Airbnb, and the "deposit" is not a deposit. There is a claim process if your property is damaged:  you request payment from the guest, and if they don't agree to it you have to submit all kinds of evidence to a case manager who has the final say on how much compensation you get, if any, and the process can take months. If something goes missing, then that's just a thing you don't have anymore.

[David-and-Annie0]

Do hosts ever get anywhere with this process? (case process if something goes missing or gets damaged?) Or does it mostly play out in guests' favor? I'm really starting to wonder if a management company would be better...even though they take 25-30%. But they deal with all this stuff (deposits, bookings, cleanings, etc.)...but then we have no control over screening our guests and whatnot...I don't know...I'm still having a hard time swallowing the fact that we're missing out on upwards of $5000 because airbnb's stupid "smart pricing" got us booked throughout Dec and Jan at WAY under what we could've gotten...My husband thinks we should just eat it and move on. But I'm still trying to find a way out/consider alternatives; I'm a bit of a die-hard.

[Anonymous]

@David-and-Annie0 Perhaps a management company with Airbnb experience wouldn't have made the same mistake you did. But even so - that's a mistake you won't repeat. Now you know that Airbnb is not your management company. $5000 is a lot of money, but that's the cost of leaping before you look. You have an amazing house, and renting it to strangers is a hugely risky business - if $5000 is the most you lose to a massive brainfart, you're incredibly lucky.

If you have the time to manage your bookings and cleanings, I don't see what a management company has to offer you. If there are specific tasks you want to outsource without losing control of guest screening and payout, you can set up a Co-Host and delegate tasks at the rate of your choice. Deposits? For that you have to use a different platform, because Airbnb doesn't do deposits.

I don't have any numbers on what % of claims are successful, but to state the obvious, it's much easier to prove damage than to prove theft. Anyway, there's a huge gap between the items of insignificant value that frequently go missing, and the items of high value that you're probably concerned about. If someone steals your TV or your car or your precious artwork, it's a police matter more than an Airbnb one. 

[Luana130]

That is a lesson I learned my first week too... I don't listen to airbnb suggestions anymore. My first week on airbnb I lost a whole month, a couple rented the entire month with about 80% discount. Since it was my mistake to follow the suggestions airbnb gave I decided to uphold the reservation, which pretty much just covered electricity and water bills. Got smart after that.... 

Here is what I do... I have two listings for every apartment. On one listing, with moderate cancellation policy, I have all the important dates blocked, I use the smart pricing airbnb has, but do not use the prices they suggest. For the minimum price I put 20% above the minimum price I can consider charging.

The second listing has a non-refundable policy, I use that for important dates, for this one I decide the price for every single date. For regular dates I charge the minimum I can charge. They get a discount on the regular dates because they cannot cancel.

Why not have just the non-refundable option you might ask... some people get turn off by that, and if they want to use the refundable one I get a little more money for it...

I suggest you take the loss this time, and change the prices for the date you want manually.

[Emilia42]

@David-and-Annie0 Why is your minimum so low?! If you want to make more money, raise your minimum! Smart Pricing will never fall below it. If other houses in your area are $500 per night then put your minimum at $550! 

[Susan1028]

Yes...and in order to avoid being penalized you will need to eat the losses...and turn them into great reviews which will pay off and position you more positively in the search queue.

I live in a vacation area and never use smart pricing because it isnt accurate.  I also opted out if instant book because I want to establish repor with the guests I’m trusting with my most valuable asset.  The conversation during the booking request process can not only clear up any questions, it also reveals a lot about how the rest will unfold.  

The best market study is the one YOU do, because you know your home and area  best and this is YOUR business.  

Check out the comparable competition including hotels in Airbnb and other platforms and do your own manual pricing.  You can change it anytime based on supply and demand and your own preferences.

Airbnb is quirky with lots of changes happening, terms and conditions that can be confusing, and there’s much to learn about how to stay successful and sane as a host.

The Host community forums are a wealth of wisdom and experience.  Do check them out.

Good luck and happy hosting!

[Susan1028]

Interestingly, I got hit with "smart pricing sticker shock" yesterday after receiving a request for a 5 day booking- the first in days, my longest stretch with no bookings.  Things have been silent on that front since the shootings in Orinda and support shared bookings were down across the platform.

That booking was under priced by 35% although the booking fees were the same as always.

I ALWAYS use manual pricing.  I did NOT change my settings and it still showed as manual pricing in my settings.  

I called "support" and they had no clue.  They offered to contact the guest and ask for more money, and I know if they called and said "hey we're sorry, but we need to charge you $200 more for your booking because of an internal error."  I would lose the booking and any chance of  future booking with the guest and anyone they shared it with.

The other advice from "support" was to "monitor your listing settings at least daily" (to be sure things are as I left it...?).  Wow.

I posted about this in another thread.  According to other hosts, this is a known platform "glitch."

[David-and-Annie0]

Wow! So sorry this happened to you! Totally unfair!! I gotta say, I am less then thrilled or impressed with airbnb so far. They really should do something for you--not charge you fees for the next few bookings or something, at the very least!

[Sean433]

@David-and-Annie0 

It happens. It takes a good full year to grasp the major holidays and events that allow you to price higher. I have made this same mistake when I started and I see many of my competitors are making this mistake.

Here are some pricing tips that may help you

1: If you see many of your competitors are already booked for Christmas in September, October or even November, it means they priced too low. Next year, keep the price high and hold onto your guns. Even if you don't get a booking till a week or two before, you will get it. None of my listings are booked for Christmas yet and I expect them to be booked closer to December 20 after everyone else has scooped up the deals

2: Busy season, events, holidays always price higher then most and wait till the last minute to get a booking. You end up receiving more because as the date approaches, there is less and less supply and probably even more demand from guests who procrastinate = win win!

3: Slow season - it is better to get booked ahead of time because prices tend to drop for last minute bookings as hosts get desperate. You generally do not want to wait for last minute bookings in the slow season vs Tip # 2 where you do want to wait for last minute bookings.

[David-and-Annie0]

Yeah, next year, I guess. I tortured myself by doing the math of the difference of what usewheelhouse.com said we could get for our 10 bookings in Dec and Jan and, according to this, we are missing out on $5,100!!! We lose the most on Christmas (4 days, could've made $1430 more if priced right), and New Years ($1118). I'm tempted to cut and run from airbnb...but is this wise? Or try to cancel the bookings (although I feel bad about it) and I guess airbnb will keep the dates booked out anyway after I cancel, is that right? (they were done through instant booking). It just kills me and I am kicking myself over and over again. Nowhere throughout the year can we command such prices. Such a missed opportunity. That extra $5000 would've paid off the couch we got for the place (that we are still paying off.)

I feel like such a fool.