Why you should never use Smart Pricing

David126
Level 10
Como, CO

Why you should never use Smart Pricing

Most of the normal emails from AirBnB suggesting I lower my prices never mention where all the bookings I am missing out have been made.

 

Today I received an email mentioning a location!:

 

Add a weekly or monthly discount

So for those not familiar with Colorado, according to Google Maps Leadville is 1 h 28 min (81.5 mi) by Car.

 

No wonder their suggestions make no sense.  

David
53 Replies 53
Kelly149
Level 10
Austin, TX

@David126 Agreed. Ours is a 1b/1b guesthouse, 1300 sqft. The comparisons abb shows me are often 1b/1b private rooms. Not even remotely close!

Smart Pricing. Not so smart. 

I'm with you. Airbnb suggested I lower my minimum price to $68 a night. Our apartment is nine rooms (including three bedrooms). My friends have a carriage house for $119 and are busy. They're space is about 25% of the size of mine. We're a block apart. I'm at $125 and I'm not going lower. The algorithm should take into account size of space and not which newcomer is advertising a fake teaser rate. One Airbnb advertises $68/night only for you to find its only available for a single night and the regular price is as high as $210.

I decided what makes it worth my while to list my place and for the most part I ignore the suggested changes.

Kelly,  these absurd price that we are getting have the potential of being very harmful.  Each time I see my property I get the message "not attractive because must lower prices". I am horrified.  I regularly get 70 - 80 % occupancy at premium prices snd these people want me to lower my prices 30%. It is just plain madness.  Premium propertied charge premium prices.  You would never expect to buy a Rolls Royce at the price of a common ordinary street car. Airbnb should stop with this absurd mad policy. 

David126
Level 10
Como, CO

I could never work out where these comparisons were comong from, I live in a fairly sparcely populated area and know most of the competiton, the price comparisons made no sense. I sort of assumed they were just made up.

 

Now I still do not know if the system used Leadville as a comparison in the many messages I have had telling me to reduce my prices, but seems quite plausible.

 

One thing I do not see mentioned is living wage, is that not factored in if you are signed up for it?

David
Jeff158
Level 10
Caernarfon, United Kingdom

Oooo I like this @David126, airbnb inequality.

"One thing I do not see mentioned is living wage, is that not factored in if you are signed up for it?"

We have to pay the cleaners a living wage but hosts can work for 50c an hour.

Linda-And-Richard0
Level 10
San Antonio, TX

I also receive these Airbnb messages about lowering the price for my listing.   Sorry, I'm not renting out a room in a Motel 6.  Even more unrealistic are the price comparisons shown when you click on the light bulb icon on your calendar.  One I reviewed stated someone looked at my listing but booked elsewhere for $135.00 less per night.   My listing is a 1,600 square foot home with 3 bedrooms, 2 full bathrooms, large kitchen and open living and dining area.  No way someone rented a comparable space for $15.00 per night.

Yes!!!! I get the same emails saying someone looked at your property for Nov 10-12 but booked elsewhere for $78 less a night for 6 peoples. It’s just ridiculous because my area does not have many listing that will accommodate 6 people for $172 a night! So annoying I rather not receive these notifications....

Sasha42
Level 3
Hollywood, FL

Dear David:

""My emails from AirBnB, suggesting I lower my prices never mention where all the bookings I am missing out have been made.""

 

My Response.....

It would be nice IF they SHOWED us the competion. So we can ALL see whats being GIVEN away!
They actually suggested I put a luxury 2 bedroom pool guest house all luxury brand new everthing 1200sq ft sleeps 7 on beds not couches, 8 mins to beach WITH daily maid service for 69.00 a night!!
Dang if I could find that deal I would move in permantly and with the 25% discount they suggest I ALSO GIVE well forget working....just move into a place like mine for nothing....I dont know why I didnt think of that!! 
LOL

So anyone out there with a LUXURY brand new everything 2 bedroom HOUSE with , luxury bathroom
FULLY FUNISHED ALL UTILITIES AND TAXES GARDNER POOL  oh dont forget daily maid service cable and wifi close to EVERYTHING including the BEACH for 69.00 MINUS the 25% monthly discount looking for a PERMANENT TENANT please EMAIL ME asap! 

 

Tounge in cheek while smiling .......o if only......

Cormac0
Level 10
Kraków, Poland

@David

 

The not so smart Pricing algorithm has to be the crudest algorithm ever devised, Airbnb do not record enough information to make this algorithm accurate and useful in any meaning full way for example,

 

  1. The area of the apartment, room etc.
  2. The type of beds employed (in Poland it's not unusual to use skids/pallets as bed bases with a cheap mattress on top.
  3. Additional amenities (garden, pool, barbeque etc)
  4. Location agh...
  5. Professionally laundered bed linen.
  6. Breakfast Table
  7. Washing machine etc.

 

Empirically my last guest was absolutely amazed at the value he was getting with the exclamation "Wow" with an explanation that the last place he stayed in with a similar price had no proper beds and was not that clean, he was a single guy on his own and my 55m2 two-bedroom apartment, was a complete mis-match for him in my opinion

 

All configuration, sizes and finishes are being lumped into the one algorithm which is complete nonsense.

 

"Marginal Pricing" works for Airbnb it does not work for its Hosts who must cover the costs regardless of whether their making money or not. While Airbnb have zero exposure to the variable cost involved in below cost selling.

 

Regards

Cormac

Here is a personal response I received from one of my guests after his stay:

 

"That was one of the best stays I've had. You wouldn't believe the crap that people put out there and actually charge money for on AirBnB. I really enjoyed our conversations."

 

When I look at "similar listings in your area", the only similarity is the number of guests that are allowed, the 1 private room, the price range, and the fact that they are in the same town. I know most of those places (small beach town) and most are dumps or have off-site "hosts" who do not attend to their guests.

Totally concur. I was asked to put my room for about 70% less and 10% discount. Less than cost price.

Lu9
Level 1
Kailua, HI

Airbnb needs a better search engine!!! They give you places 1 hr away from where you are searching and in yours and many cases, the prices make a big difference if you have to drive an hour in traffic!!!

Mark26
Level 10
Melbourne Beach, FL

 My favorites are "Someone looked at your property, and booked somewhere else on the 5th through the 12th for $45 a night less.  Someone else looked at your property, and booked somewhere else on the 7th through the 15th for $37 a night less.  You should lower your price to get more bookings!

 

Thanks AirBnB Not-So-Smart-Pricing Machine.  It's good to know that you've been smoking pot again, and failed to notice that the guests booked elsewhere not because of price, but because WE ARE FULLY BOOKED DURING THOSE DATES!

 

Dim witted boobs!

@Mark

 

 

It's a cryptic message to build an extension to you home!

 

On a more serious note, Airbnb kept even fully book homes in the search algorithm, which must screw the supply and demand pricing!  

 

Regards

Cormac

The Explorer's Club Krakow III