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

[Kevin1322]

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?

[Stephanie · Accepted solution]

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

[Emilia42]

@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. 

[Mike-And-Jane0]

@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?

[Kevin1322]

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.

[Elaine701]

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. 

[Kevin1322]

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.

[Kathryn563]

It did the same thing to me too, put my price way too low.  It’s as though it doesn’t see the minimums.  I guess I’ll just cancel those reservations and see if it will recalculate.  I would lose over 2,000 if I kept them and it’s not fair that others pay more.

[Sarah977]

@Kathryn563  You can't "just cancel them". There are severe penalties for cancelling confirmed reservations, one of which is that Airbnb will block the dates that were cancelled, so you can't rebook them. You will also be fined- they will take it out of your payouts for future reservations. 

You need to read up on Airbnb policies re host cancellations. 

If they were Instant Bookings, you get 3 penalty- free cancellations a year, but those are for bookings you feel uncomfortable with, not because your pricing wasn't correct. 

You need to contact customer service to explain the pricing glitch and see if they will do neutral cancellations for you if they determine it was a system error, not your fault.

Also, your place is not listed correctly. It says its an "entire condominium". It doesn't look like a condo to me, and you need to explain the living situation. It seems that you live in the house and rent out the basement? You need to make that clear in your desccription.

And if you are just renting the basement, you shouldn't have a  photo of the whole house, especially not as the cover photo. You will end up with confused guests unclear on what they rented, low accuracy ratings and disgrunted guests.

[Kathryn563]

First of all, yes I own the house and can cancel.  I did not give my house to Airbnb.  Now I am ethical and I will not Willy nilly cancel someone, but when I am set to loose over $2000 next summer, I will look at my options.  This “right pricing” is highly unethical:  it Willy nilly bills one guest 2400/60 night and the next 2500/87 night.  You do the math, it’s not ethical.

second:  I did have photo of the living room as cover photo, but Airbnb changed it to the front of the house.  To make it worse, it would not let me change it back because it said the living room photo was not a cover photo.  Well it WAS THE COVER…

third:  this is an entire 2 bedroom 1bath apartment in a house.  It is NOT JUST A ROOM.  THERE WAS NO OTHER OPTION.  

[Sarah977]

@Kathryn563 You owning the house has nothing to do with cancelling.

Of course you can cancel. What I was telling you is that you will receive severe penalties for doing so. 

https://www.airbnb.com/help/article/990/host-penalties-for-canceling-reservations#:~:text=Cancellati...

And yes, you have other options for the main description of your place. It is not a condominium. I suggest you go back and look at the options and change it.

If you aren't open to advice of other hosts trying to help you avoid penalties and confused, disgruntled guests, then there isn't much point in posting here. This a place where hosts try to help each other out.

[Kathryn563]

Hey Lady.  It’s an apartment, not a room.  It has 4 options: rental unit , condo, loft, and serviced unit.  It is not in an apartment building where there are only tenants, no owners.  It is in a house in a neighborhood that has private owners.  I did the best I could .  Thanks for “helping” with the computer stuff.

[Sarah977]

@Kathryn563  "Hey lady"?

This forum consists of hosts trying to help out other hosts. We try to keep things respectful and civil here. 

[Stephanie · Accepted solution]

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

[Kevin1322]

yes, good one. 

[Mike-And-Jane0]

@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!!!!!