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.