Smart Pricing makes me wonder if it’s worth the effort

[Deborah630]

Hi I recently started advertising my home. It has 3 bedrooms, sleeps 6, the whole home is for rent, it’s wheelchair accessible, pet friendly, in a seaside town, less than 10 minutes walk from the front with mountain views. 

Live a family of 6 coming this week and smart pricing means they pay £34 for the night. I’ve to make up 3 double beds, leave clean towels and a welcome pack for 6, they’ll use my heating, electricity and WiFi. I’ve checked on booking.com and on Airbnb and they wouldn’t get anything else in the area for less that £160!  I set up smart pricing as I didn’t want to underprice my home but this price is ridiculously low! 

Any ideas why? 

Thsnks 

[Jessica-and-Henry0]

@Deborah630  Please read the links below. Fyi, I completely ignore pricing tips and stay away from smart pricing. I do my own research about market prices and based on what it costs for me to host, I determine how much I want to make from a certain no. of nights hosted. 

https://www.airbnb.com/help/article/52/how-should-i-choose-my-listing-s-price

https://community.withairbnb.com/t5/Hosting/Why-you-should-never-use-Smart-Pricing/m-p/547981?advanc...

https://community.withairbnb.com/t5/Hosting/Competing-on-Price-is-a-Flawed-Strategy/m-p/326386?colla...

https://community.withairbnb.com/t5/Hosting/ridiculous-price-tips/m-p/48793?collapse_discussion=true...

[Emilia42]

@Deborah630, like @Ann72 said you do have some control over Smart Pricing with your minimum and maximum prices that you set. Are you getting Smart Pricing confused with the "price tips" that Airbnb suggests? Airbnb is always sending me little pop-up suggestions to update my calendar with their price tips. NEVER do this. The price suggestions are totally unrealistic and you will loose money, as you are already experiencing. You know your market and your competition better than anyone else; don't be afraid to set your own price. Play with it for a few months and find what works best.

[Günther19]

Hi @Deborah630! Well I agree with everyone: smart pricing makes your Air BNB not profitable. I set my own prices, I just wish hosts had more data to set the prices. Which months have the most searches? Which days within a month? Which weekends have the most demand and which the least? In theory the smart pricing shows a price that includes that info, so I at least look at it before setting my own price.

My experiencie is: prices have to vary. I rent a whole house at a beach town, and it’s clear that a tuesday in winter cant cost the same as a saturday in summer. My prices vary from X to 3X. 

Most people rent on weekends. Having much cheaper weekdays means I have every now and then someone renting from monday to thursday, while when having a flat rate that didnt use to happen. 

Do you want your place fully booked? Or do you want a reasonable amount of reservations (e.g. 30% occupation) to generate an income? All variables that are important to determine how aggresive you should be with your pricing.

[Deborah630]

Thank you for all the advice. I’m new to this and just clicked smart pricing and discovered I’m cheaper than the local youth hostel! I didn’t realise I could adjust the minimum and maximum but I do now! I only want a few bookings as it’s our future retirement home so I’m just looking to cover a few bills. Thanks 

[Rebecca181]

@Deborah630 Ignore Smart Pricing. I also rent out a beach cottage in a historical town near mountains, rivers, and lakes. I charged double what Smart Pricing recommended and stayed booked year round - Only had breaks when I blocked days out on my calendar. You will know what the market can bear when you raise your price and don't get booked. I adjusted my prices weekly based on how many bookings I had for the month; whether it was 'high season' or 'off season', or a holiday weekend. Look at what others around you with similar rentals are charging and set a price based on this information and how you think your offering compares. If you have any trouble being featured on page one of the searches, you may have to start with a lower price until you build some 'cache' (5 star ratings, etc) - and then you can raise them from there. It also helps if you offer as many amenities as possible so you will come up when travelers use Airbnb's filters. Best of luck!

[Deborah630]

Thank you.very useful advice.

[Thomas1033]

@Deborah630  we have a 1 bedroom apartment and I wouldn’t let 1 person let alone an entire family of 6 step foot in it for what is that like $34?  Omg!!!  We use smart pricing in the hopes it will go higher than our minimum we set which it rarely does believe me!  $2 at most.  Before we took the vacation rental route we rented it out on a lease for $875 per month.  When we get to the 1 year mark we will evaluate our position and determine whether to proceed on course or not.  It has been nice not having permanent tenants and being able to go up there between guests.  And we can use it for family too if we want.  As Robin said you need to look at your costs versus profits and basically what are you willing to provide for that?  The cleaning alone wouldn’t be worth it.  Yvonna (cohost)

[Linda-And-Richard0]

Be truely smart and turn OFF smart pricing.  Do your own research.  View other rentals in your area and set your price comparable to properties similar to yours.  Remember, you are doing this to MAKE money.  Why would anyone rent their space at a loss? 

[Andrew1054]

Hi, 

i use smart pricing but set my limits as well. I have a three day minimum stay to justify cleaning costs and consumables, also to avoid Bucks nights, Hens nights and other short term risks

[Leo192]

@Deborah630  - I wouldn't worry too much about this since you're just starting out and learning how things work.  But it's good you came to CC to address your concern as some folks here are able help you.  We SuperHosts had to start somewhere and I remember first 2 bookings got a super deal on my space.  I didn't make a dime but the upside was - I learned a lot about what it's like to be an ABB host, what I can improved on and what I can changed on my listing (dessciption, rates, photos & etc.).  I think Smart Pricing/Price Tips is just a starting point to get guests to booked with you and help your search ranking.  However, I feel it's probably something you don't need to rely on.   I think later on as you get more bookings, feel more confident about hosting you can then begin to raising your rates.   Your space is pleasant and I'm sure you'll eventually find the appropriate rates you & your guests will be content with.  Happy hosting!

[Šarka0]

Set the minimum price, that you feel comfortable with for the low season, set fixed price in high season, that's how I do it in my calendar.

One funny thing too, this is what I got in mail today 🙂

[Rae43]

I’ve had many guest tell me I could be getting more $

I am about to update and redo the bath on my rental. I’m nervious about turning off smart pricing but I feel it is to low ? 

I recently added a cleaning charge to help re-cope the cost of my time cleaning and the cost to clean all the linens and towels