Smart Pricing works if you get it right. And it isn't rocket science.

Level 10
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This year,  we turned on smart pricing.

On some bookings we are getting 15c to 20 percent more per stay.

Admittedly there is high demand.

We kept our base price the same as our normal price, only allowing smart pricing charge more, never less.

It was that simple. We followed sage advice from experienced hosts on this,  make your bottom price your usual price, and what have you got to lose.

It remains to be seen how guests perceive "value" as star ratings in their reviews, but for money in the bank we have already seen a boost.

So I'd give this a cautious thumbs up.

How are other fairly new hosts finding smart pricing?

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40 Replies

Re: Smart Pricing works if you get it right. And it isn't rocket science.

in
Orono, ME
Level 10

@Kevin1322 I'm glad Smart Pricing is working for you. I used to use it and it made me some extra money in the past. It gave me the confidence to raise my prices.

But this year's demand is through the roof and it isn't pushing my prices up high enough. So I've had to override it for the next few months. 

Re: Smart Pricing works if you get it right. And it isn't rocket science.

in
England, United Kingdom
Level 10

@Kevin1322 The concern I have with smart pricing is that it doesn't allow a different base price for high and low seasons. If you set the base price for high season it will surely make you uncompetitive for low season. Am I missing something?

Re: Smart Pricing works if you get it right. And it isn't rocket science.

Level 10

Yea, I see what you mean. You would have to adjust your pricing manually as the season changes I would think.  It isn't perfect.

Re: Smart Pricing works if you get it right. And it isn't rocket science.

in
Balearic Islands, Spain
Level 10

Every time we've ever enabled smart pricing, it's been by mistake. Pressing the wrong button inadvertently. 

 

In each case (1 or maybe 2 times), we've had to accept bookings at about half our usual rate. I don't think smart pricing actually considers apples to apples market  comparisons. It seems to just total everything booked, from 1 bed share homes to luxury palaces, averages it out, then that's the "smart" price. It seems to consistently average well below actual market rates. 

 

So it occurs to me that if smart pricing actually gets you a better rate, then perhaps you're underpricing your offerings in the first place?

 

If so, is it that you're concerned that you won't get any bookings? Airbnb has the largest market reach on the planet. Just be patient. There's another guest in the queue, willing to pay your price. As long as you're reasonable about prices in the first place.

 

Being too "reasonable" is also just giving away money. Look at the competition carefully (for your class of product). I suspect many may be a bit pricier than you. 

 

Also, it's been a rough couple of years. Any lower priced competition may not have been booked up yet. But as soon as they are, you'll bubble up to the top range of choices. At >your< price.  Just be patient. 

 

@Mike-And-Jane0 

 

For ma y reasons, we're forced to have 2 listings, one for high season and one for low season. The pricing models need to be different. Airbnb doesn't have any facility to adjust pricing models on a seasonal basis. 

Re: Smart Pricing works if you get it right. And it isn't rocket science.

Level 10

this is why we completely ignored the option to set a lower price.

to be frank whenever ABB "suggest" prices they are below our base price.

and we have a base price because that is, our base price. Below that it is not worth it, or barely worth the other. so we set our normal price as our bottom price, and anything over that is gravy.

Re: Smart Pricing works if you get it right. And it isn't rocket science.

Online Community Manager in
London, United Kingdom
Online Community Manager

Hey @Kevin1322 !

 

Great topic. You've reminded me of a fantastic topic that @Ann72 made for the Festival of Hospitality back in 2019 on how she's mastered Smart Pricing: https://community.withairbnb.com/t5/Hosting/Festival-A-Smart-Pricing-Journey/m-p/1123517

 

Hope that helps,

 

Stephanie

Re: Smart Pricing works if you get it right. And it isn't rocket science.

Level 10

yes, good one. 

Re: Smart Pricing works if you get it right. And it isn't rocket science.

in
England, United Kingdom
Level 10

@Kevin1322 @Stephanie @Ann72 

Ok guys, if it is true that smart pricing and price tips are different beasts then I will switch on smart pricing for one of our listings. I'll let you know how it goes!!!!!

Re: Smart Pricing works if you get it right. And it isn't rocket science.

Online Community Manager in
London, United Kingdom
Online Community Manager

Nice one @Mike-And-Jane0 ! 

 

Yeah, price tips are those dashboard suggestions that pop up whereas smart pricing is a price threshold you can set on your listing. 

 

Looking forward to hearing how you get on!

 

Thanks

Re: Smart Pricing works if you get it right. And it isn't rocket science.

in
England, United Kingdom
Level 10

@Stephanie Hmmm - I am not convinced. The little graph you get with smart pricing switched on shows the price that Airbnb would charge if the minimum price set didn't stop them. The prices given here (£35 per night) look suspiciously like Airbnb price tips to me. Why, after all, would they be any different?

Anyway I'll give it a few weeks and see how it goes.......

Re: Smart Pricing works if you get it right. And it isn't rocket science.

Online Community Manager in
London, United Kingdom
Online Community Manager

@Mike-And-Jane0 Maybe when it's rise and shine time for @Ann72 she can add some advice. £35 a night is pretty remarkable for your listing 🤔  (remarkably low.)

 

Cheers

Re: Smart Pricing works if you get it right. And it isn't rocket science.

in
England, United Kingdom
Level 10

@Stephanie It's only for the 1 bed place so is vaguely credible although are last booking was at £60. I am certainly not going to risk smart pricing the 3 bed as we have had price tips for that in the £30-40 range!

Re: Smart Pricing works if you get it right. And it isn't rocket science.

in
NY, NY
Level 10

@Mike-And-Jane0  No, don't use their minimum.  Set your minimum at what you would normally charge - the least you would like to get for the space.  Set the maximum at Airbnb's maximum.  It will never go that high but the algorithm needs a range to work with.

 

Never use their minimum.  Ever.  Never ever.

Re: Smart Pricing works if you get it right. And it isn't rocket science.

in
England, United Kingdom
Level 10

Hi @Ann72 Don't worry even I am not stupid enough to take the Airbnb suggested minimum.  The problem I have is that we were charging £50 per night weekdays and £60 or 65 for weekends. For smart pricing I have set a minimum of £60 but fear that the listing will just bump along at £60 and so make us uncompetitive for the weekdays. If I had more (any) faith in the concept I might have put in £50 as the minimum.......

 

interestingly when I flirted with Homeaway a while back their auto pricing offering asked , from memory, if you wanted high occupancy or high rates. I guess Airbnb are just targeting high occupancy hence low rates.

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