How Can Hosts Turn Lookers into Bookers if They Don’t Know Where the Lookers are Looking?

[Mitch-And-Donna0]

I have become more and more skeptical of the value of Airbnb’s smart pricing tool because it shows a bias toward reducing prices at every turn. Airbnb would rather make something than nothing. I get that. Sometimes I share that philosophy – like off season times or for days trapped between bookings. But in the high season, when I’m almost guaranteed to book every weekend night, I want to maximize revenue. To make it useful for hosts rather than entirely for Airbnb, the pricing tool needs to take a host’s preferences into account. There should be a spectrum of whether your goal is to raise occupancy rates or maximize revenue. Without that input from the host, there is necessarily a bias toward what maximizes revenues for Airbnb. Here are some examples of Airbnb’s bias toward hosts lowering their prices to achieve higher occupancy rates:

• I just received the “Turn Lookers into Bookers” email encouraging me to lower my prices, which shows that I lost bookings for certain dates because of listings priced lower than mine. The examples they give show prices almost exactly half of their smart price recommendation for my listing. So on one hand they are encouraging me to set one price and on the other hand they are saying, no, you should price it at half that amount. I don’t want bookings at half price.
• The pricing tool is recommending that I price weekend nights in the summer months of June and July the same OR LOWER than weekday nights. I just checked July weekends, and the recommended price for every July weekend is LOWER than July weekdays. This is the busiest time of year and is beyond 30 days out. Absurd.
• Another indicator of their bias is the window that pops up when I change prices. Regardless of whether I lower or raise a price, it asks why I raised the price. There is no option for asking why I lowered a price, which shows they don’t want feedback for that. They just want feedback to confirm their bias toward lower prices.

Airbnb has enormous amounts of data that could be shared with hosts to help them meet their own, personal goals, yet they don’t share it anywhere near as much as they should. All we get are numbers of views over the last 30 days. And we get the bizarre and useless chart in the “Views” area of the “Stats” tab. What are “booked days?” Are they days on which a booking occurred? If so, what exactly do we gain from knowing that that could help us set prices to meet our goals? And what are “unbooked days?” Most of the days marked unbooked are booked on my calendar. What we should have is a way to see the days that prospective guests are searching to get an idea of demand. The lack of sophisticated or even basic analytics is such an unnecessary flaw that shows a disservice to hosts and Airbnb itself.

[Bob-Sheryl0]

Hi. We are still in our first week and naturally have a lot of questions. But the one concerning pricing is high on our list.

Before we listed our space, we researched others in our area. Both Airbnb and unaffiliated B&Bs. When we compare our price to other prices in context with what we offer, we believe our price to be very fair. But we did notice that Airbnb wants us to price lower. Much lower.

The fact is that if we were to charge what Airbnb suggests, we would not make any profit at all... so we might as well not list.

At least we're not the only ones... But for now, we're going to stick with our own market research and try to ignore what Airbnb tries to tell us to do.

[Hilary-And-Ed0]

The smart pricing system is only smart for the company itself, not for the host.  I think the idea is to get as many people using (renting via) Airbnb (and not other rental sites) as possible.  People are more likely to stick with a company once they have used it once.  So the smart pricing system will keep prices very low.  I have found doing my own market research (eg, poking around, doing searches in my area on the site) is the best way to price my own place.  I am pretty new as a host, but it seems to be working.

My suggestion for best pricing, is to play around with it while you are learning.  Look at similar units in your neighborhood, and then price low initially to bring in bookings.  Then when you have some positive reviews, you can inch the price up to meet market rate.  

[Linda108]

@Mitch-And-Donna0  Like you and others on this post, I trust my pricing rationale more than any Air BNB recommendations.  I am not bothered by the recommendations being low because I think it reflects their data collection.  I know what I have to offer and am as busy as I wish to be.  

[Bruce43]

yes, smart pricing is like a smartphone, anybody can by one.

the lower the price people see the lower class of guests you will attract. like flies.

[Pam89]

As hosts we need to be pushing airbnb to share the data.  All similar online business has to start with getting the buyers, then helping hosts.  It happened that way with ebay years back and it is still true.   Sellers on ebay were in exactly the same position, without buyer data across the board they couldnt make business decisions about setting prices etc.  Airbnb is a work in progress and if hosts start pushing for the data they will eventually push it to the top of the product updates list.

[Annette33]

Thanks, @Mitch-And-Donna0 , for your detailed ideas on this. The bottom line is that for most hosts in a specific location, there is lots of competition. So whatever Airbnb would be sharing, if at all (!), would be shared with other hosts as well. So I don't see how their robo analytics could ever be helpful in attracting more customers for a specific setting and listing , thus I just don't pay any attention to their pricing suggestions. And as @Bruce43 says, the lower the price the more trouble potentially ensues with the clientele you then attract. Lots of us hosts believe that to be true.

Trust your own instincts more than anything! Pricing isn't everything - you want the customers who select your place because it speaks to them, and they decided they can afford it.

PS : Airbnb's confusing "booked days" just means that on that day a booking came in. "Unbooked" days means no booking came in.

[Andrea724]

I use smart price but I have never had a reservation on thE maximum price, not even in the middle, only the lower price. Very disappointed with this tool. 

[Gerry-And-Rashid0]

@Andrea724 

This is is a tool for Airbnb to maximise its bookings and revenue. I have no idea why anyone would use it unless you are unconcerned about what rate you get. Choose your own rate to reflect your area, your property, events, weekends etc.

[Cormac0]

@Mitch And Donna

I think it’s worth remembering that those selling the food, picks and shovels in the Klondike where the ones making the real money (Sam Brannan) and 99% of the prospectors made very little, I beginning to think that AirBnb is analogous to this.

Is Airbnb a latter-day gold rush where we're the prospectors and Airbnb is the service provider obvioulsy the smart money thinks so judgeing by its Market Cap.

Regards

Cormac

The Explorer’s Club Krakow III

The Explorer’s Club Krakow VIII

[Joanna85]

@Cormac0

That is a GRRRREAT point.  Funny but also true.

I decided what my 'break even' was and what profit I wanted to make.  I took a few bookings at the smart rates just to get a few reviews.  Then I went with what I needed.  I feel where I live, pricing seems to be all over the place but DEFINATELY renting my space out for 19$ a night is crazy with a capital C. One time I even saw the smart pricing put my space for less than that...YIKES, how can that even pay for water and electric usage for the night?!!!!  I have quite a lot of bookings and I"m not the smart pricing low, so whatever I'm doing, it's working for my needs and that's really all you need to worry about:  your own profit margin.  

Like others have said, Airbnb is in it for their fee, so they get it regardless of what the host is charging so it doesn't matter them.  Airbnb is a booking service and it should be treated as such--follow their basic rules to be able to use the service for people to book your place and payment processing and then do what you need to for yourself.  Simple.  

[Carter5]

Airbnb's tool recommended $40 for a weekday that I've booked repeatedly for $149 a night.  The "lookers to bookers" email was similar, showing prices 75% lower.  I'm not interested.  There's little Host benefit to their strategy, its clearly about driving guest value and maximizing guest transactions to drive their business not mine/yours.  Sadly in the early days when I was 'experimenting' on price and chose to reduce rates, I had two instances of wild parties resulting in $4k and $8k in damages.  Airbnb is no different behaviorally than Uber in its relentless chase to the bottom for price.

[Mim-Das0]

How i can join lookers into bookers LOL