Why you should never use Smart Pricing

[David126]

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

Hosts in Leadville who offer discounts for longer stays increase their long-term bookings by 625%. Longer stays let you save time and money that would otherwise be spent on cleaning your place and welcoming more guests for the shorter stays.

Try adding a discount for reservations of 7 nights or more.

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.  

[Helen56]

You can ignore the so called 'smart' ( stupid) pricing.  It's up to you what to charge.  I have just just put up my price by $5 -after 2 years - and am still geting bookings.  

[Eduardo334]

I agree! "smart pricing" just does not work. I have an apartment on the Atlantic coast,  these "smart pricing" suggestions told me to rent the the apartment at a price 30 - 40% lower. I was completely horrified, because the apartment is in a prime zone in the city,  and therefore it charges premium prices.  What happenes: I have more than 80% occupation rate at a price almost 50% higher than their "smart price". I have been writing to airbnb telling them that what they are doing is wrong,  completely wrong.  The same happens with another apartment in my home town.  I think that airbnb should stop this mad policy of "lowering price mania" that airbnb spreads with their emails.  I fear that many new owners actually follow these absurd recommendations and end up loosing much money.  And the problem is that airbnb guests are starting to expect these "low prices", so it can is a very harmful policy.  Is airbnb out there to loose money? Why are they doing something so absurd like that? They should stop with this madness. 

[Kate-and-Rick0]

 You offering lower pricing draws more customers to the platform sooner for their IPO—growth may be  everything to airbnb at this point.. 

[Huma0]

Does Smartpricing even take into account seasons? I tried it out and, although there were occasionally price increases during peak times and seasons, mostly there weren't. Many people in the UK take a short break on a 'bank holiday' weekend, but there was no price increase for these at all, nor for the Easter holidays. For peak seasons when I know I will be booked, e.g. high summer, Christmas, New Year, still no increase in price?

It seems there's no function to smartpricing other than to constantly tell hosts to lower prices.

And no, the comparable properties are not comparable. None of them are ever in my part of London and I know there are plenty of Airbnbs close by. There is a huge difference between a property that is a five minute walk to the tube station and then eight minutes by tube to the centre of London (mine) and one that doesn't even have a tube station and is an hour's commute from central London, but smartpricing doesn't seem to think so.

[David126]

Well we should all have been getting messages to increase our prices over Christmas and New Year.

Still waiting for mine.

[Huma0]

@David126

I dont think I have ever got a message to increase my prices, although they have very occasionally risen from my base rate when it's super, super busy in high summer, but only occasionally. Defintely not at Christmas and New Year which aways get booked months in advance.

I also checked out the competition again in my local area, and by local, I mean within a five minute walk from my house, because I had guests wanting to book an extra friend whom I couldn't accommodate.

There are many listings close to me, but low and behold, there was almost nothing in my price range that I would have been comfortable recommending to my guests. The only thing I found that compared to my listing in terms of standard of accommodation, was for a single, rather than double, room, priced around 35% higher than mine. I only found one listing in the price range that looked decent and luckily they were happy with that.

So, why does Airbnb keep telling me that people are booking in my area but for less? Let them book, if they want a shoe box of a bedroom or a curtained off section of the living room, but that's not what I am offering!

[Tom368]

Turn on Smart Pricing the suggested lowest price is $42  Turn it off and the suggestion goes to $62
Doesn't look Smart at all.  Local motels get 85 minimum.  
I could rent the house unfurnished on a 12-month lease and collect $39.50 a night and not have to pay utilities or cut the grass.  
I've realized that all Airbnb is interested in is keeping the customers happy which creates buzz and increases their customer base.  Unfortunately, the homeowner is not the customer.  What's even sadder is VRBO has jumped on that same bandwagon.

[Sasha42]

LOL.....Thank you sir:

WAKE  UP AIR BNB 
"I could rent the house unfurnished on a 12-month lease and collect $39.50 a night and not have to pay utilities or cut the grass. or tend to the pool or maid service clean linens and on and on"

[Vijay19]

I literally just turned off smart pricing and got booked at $68 when Airbnb was trying to convince me at $36 plus 20% discount coz I'm a new host. IMHO new host doesn't mean a thing when I'm renting the entire apartment and this is central Houston, even super 6 is not giving a roomfor less than 50 bucks

[Eduardo334]

I have an appartment on the Atlantic coast, in Argentina,  and now that it is high season, it is fully booked, that is with a 90 % occupation rate, with booking.com.  Last year I had 60% airbnb reservations,  and 40% booking.com reservations. Now it is the other way round: I have 100% booking.com reservations at higher prices than last year!  And occupancy is higher, only 2 days not booked out of 31! Airbnb is losing money with me. I get mad when I receive "you must lowere your price" messages. Airbnb is loosing money.  I write feedback messages to Airbnb telling them that what they are doing is a huge mistake.  But they do not answer me.  So I talked to airbnb support and they told me to disregard the emails because my properties are fully booked! But telling people to "lower your price" all the time is plain wrong.  I work to earn money,  and prices should at least cover the costs,  don't you think?  And premium properties should charge premium prices,  that is "Marketing 101" stuff.  The story goes on: I had a 3 day "overbooking" episode,  and when I tried to find a replacement with the booking.com support staff,  they told me "your appartment has the lowest price in the zone with the same rating score! , you are 30% lower than the rest with the same score".  CONCLUSION: next high season I will increase prices by 30 %. 

[Cary12]

Totally agree — Smart pricing could be a big help, but it needs fixing! We contacted customer support, and were told that because AirBnB is worldwide, the week of July 4th wasn’t seen as prime time. In fact, it was suggested at $2 less per night than the weeks before & after. On a resort island in Massachusetts, USA?? Plus, the wording is misleading. I thought I was agreeing to a discount for bookings of *longer* than one week (which is my minimum due to HOA rules). Why would I set a weekly price and then discount it for someone booking one week? So I’ve turned Stupid pricing off. $64/night isn’t worth it when I can get $1600/week booking on my own. 

[Joshua5]

My recent experience with Smart Pricing leaves a lot to be desired. I turned it on after all of their messages to me  and a bit of curiosity on my part. For a few weeks there was no activity...until...

1. someone came in and booked for 28 days. Generally I am quite happy with long term bookings, but after studying the pricing quite closely what appeared to happen was the following: before smart pricing my rates were generally $500/night low season and $700/night high season and holidays, 14% weekly discount, 40% monthly discount. I turned on smart pricing with a $375 minimum and $700 maximum, which I figured was required to see some additional activity. I assumed the 'minimum' was exactly that - a 'hard, minimum' price. Was quite surprised then when the 28 day booking was for about $240/night. Whilst there has been no explanation of how this price was arrived at by the rocket scientists and algorithm experts at AirBNB, my take is that thay applied the 40% monthly discount to the minimum threshold smart pricing rate. I hadn't really considered this possibility before switching smart pricing on, so was committed to the booking. I suppose I can unwnd it, but as a guest I can't stand it when hosts don't honour the prices they have. I have come in to book mulitple times where hosts haven't updated pricing for seasons, etc and it is really frustrating. I can live with this booking, although it is a much better deal for the guest than for me. Lesson learned.

2. Someone came in yesterday to book two nights - the enquiry showed $500/night over a holiday period (ie - would've been $700/night without smart pricing). To better understand this, I switched smart pricing off, and the enquiry then priced correctly at $700/night. I then switched it back on and Smart Pricing repriced the same enquiry at $475/night. Seems all over the map. I reached out to AirBNB to understand what price the guest was seeing, and nobody could answer that simple question. I had to ask the guest directly how AirBNB was pricing this in order to send him a sensible special offer. 

Botton line : Immediately switched off after these two data points and wouldn't be inclined to switch back on or recommend to others. I feel like there is a serious loss of control and is absolutely subject to abuse. Would not recommend at all to other hosts based on these experiences. 

[Vijay19]

Joshua I can't find a no reason or precedent to weekly and monthly discounts, I'm doing 10% weekly and 14% monthly which is working fine till now I may even lower the discounts, ppl don't look at discounts when they are booking they just see the daily rate

[Sasha42]

absolutely subject to abuse. Would not recommend at all to other hosts based on these experiences. 

KUDOS! sir, couldnt have said it better!

[Oomesh-Kumarsingh0]

@David126 I totally agree with you, they should stop their aggresive way of doing business and pressing all hosts to give a discount.I believe they send those emails to everyone without even checking our pricing.Airbnb work with me not against me!!!