Prices dropping by 50% - is the pricing tool a complete disaster?

Level 5
London, United Kingdom

Prices dropping by 50% - is the pricing tool a complete disaster?

What is happening with the prices in London? I have been an airbnb host for 3.5 years and the prices are tumbling like I have never seen before. Am I the only one experiencing this? 


I have two listings, one for a private room with own bathroom in my large 2bed home, the other one is for the entire home for times when I’m away (I only started doing this one year ago). Ever since the pricing tool was introdcued I looked at it in disbelief of what it suggests and could only ignore it. To me, it actually feels unsafe using the recommended prices, yet I totally and utterly rely on the income from my place being rented and, for the first time ever, this month has been incredibly slow. When I first listed my entire home over Christmas last year I charged £140 plus cleaning as an introductory price, I since had regular bookings throughout the year for £200 per night with all all the reviews saying "good value", now I am suggested to charge £100 and even less. I have also checked a website called Pricelabs, who is making similarly low price recommendations. If I had followed the suggestions by these pricing services all year, I would have had a much lower income. Instead I do what I always did: regularly check what similar listings in the area are charging, or what the average price is for listings like mine seen on the home page. But I am now wondering whether overall prices will be affected, if every new airbnb host sticks to the price recommendations by the pricing tool? Understandably, if I was new I would do the same. However, this is London - everyone knows that a million dollar mansion could be right next to a council estate and a computer just won’t have an algorithm for that anomaly. 


What is everyone else experiencing? Especially longer term hosts - are you experiencing drastic price drops? Are you following price suggestions from airbnb or other services like Pricleabs? Are you finding them useful? Any info would be much appreciated as I’m at a loss as to what to do - drop prices drastically (and risk opening my home to people who might not appreciate it for what it is worth) or keep taking the risk of higher prices and a potentially empty home?

107 Replies 107
Level 5
London, United Kingdom

I have done a bit more research and found at least one expert confirming what I thought. Comments are still very much appreciated!

The Airbnb Pricing Tips service should be added as another tool in your arsenal, but alone, it can’t be trusted to maximize the revenue of your vacation rental.

Don’t trust Airbnb’s “suggested rate”, they have not refined their analytics to a point where this tool is very helpful.   For example, the tool suggests that I price my apartment for $139, but my average daily rate is closer to $225.

Hi i have a listing in Dubai and find the pricing tool unreliable. I use it as a guide along with the chart that tells me how many hits my listing is receiving V others my area. If i dropped my prices to the rates suggested by Airbnb, there would be no point taking the booking as i would make a clear loss.

I could never survive on the pricing tool listings. I get bookings though they tend to be shorter notice than last year.  (Last year I was booked all CHristmas and New Year six months in advance, this year I got a Christmas booking just a few weeks ago....but this is happening all year long).  

Contact AirBNB

I have found the pricing tool to be a daily guide, but only use it when it suggests a higher price than what I am charging. I adjust my prices daily, based on my own analysis of my place as a destination. I also manually add the hotel tax to this price daily, which is a real bother, but necessary for compliance, otherwise I would be out of pocket for the taxes instead of collecting them from the guests.

I find this really interesting ref the Airtbnb prices quoted as low as 50%. I think it also depends on how many other listing sites you are using. For example - I find last minute accom bookings on Airbnb guests seem to ask/suggest/imply that discount is warranted. I also list on other sites including etc and the bookings that I have secured last minuted have paid higher the normal standard rate or higher for the same period.


I understand the need to grow the Airbnb  and create an offer that attracts a multitude of traveller types BUT we may be seeing the a move towards a cheaper type of guest similar to the old 'home stay' type which traditionally was very cheap and cheerful. This is not what I and many others are offering on Airbnb. You know the saying ... don't put all of your eggs in the same basket.

I would have to agree. This is really not helpful to the owner, the rental community or the guest. Sometimes, their pricing tool, even when not 'on' corrupts the owner's listing price.

Such a shame that airbnb has not pulled this tool off the website.

Level 1
Johannesburg, South Africa

Pricing ..... guests making bookings are being charged a much lower rate (sometimes as much as 50%) than the price advertised. In other words I have loaded a price of....e.g. R4000.00 South African Rands per day over Christmas. Guest book and are quoted R2200.00 per day automatically. They accept based on the price they see when they book and not the listed price in the availability calender?

Airbnb and homeaway need competition.  If I listed at the price that they suggested,  I would end up paying more (because my rent is higher than what they suggest) and still have my furniture damaged/stuff devalued.    I hope someone starts another online booking service that makes them have to tailor a bit more to all of the hosts who would leave.  However, booking prices have also dropped a lot in just two years since entire rent-controlled apartment complexes are converting into airbnb spaces after illegaly evicting tenants.

We are seeing the same in Rio right now. In low season we were charging R$180  - 200 a night and were fully booked. Now, in June / July, just before the Olympics, AirBnB are suggesting R$98. We have already dropped the price to R$130 and there is no demand. This new price algoritm is definitely not in the hosts' favour....

Level 5
Somerset, WI

I'm a HA host and there is a lot of conversation about slower than normal bookings after the summer season. It's happening to me too. 


I have reduced my prices almost back to what I charged the first 6 months I rented .. very reasonable for the size of our house and property. 


The price tip has never been helpful for me either, especially when the house they feature as one I should mimic charges more in fees and is smaller. Top that off with it being over 40 miles from my location.  Totally useless information for me. 


Interesting. Thank you for your comments. What is an HA host????

Homeaway. Very unhappy with them since they initiated average pricing this fall. Have gotten hardly any inquiries since then from their website. My bookings are coming from here. 

I see. And again, I wonder whether pricing tools are a complete distaster for the holiday rental/ home rental market?! I truly believe that the airbnb pricing tool is useless. The pricing suggestions it makes for my London home are ridiculous. For example, I live in a 2-bedroom 2-bathroom flat which is over £2,000 in rent. My downstairs neighbour (same pretty Victorian style home, same super central location in same expensive and sought after area) is a subsidised council owned flat and she pays about £400 per month. It's a one bed only, but my next door neighbours who have the exact same one-bed flat (only that it isn't subsidised), pay just under £2,000 per month. Now imagine a computer making sense of that! 

Totally agree.  I'm a professional host.  Been on airbnb for more then 3 years and have almost 400 reviews.

Prices definitely started dropping when the pricing tool was introduced... 


I have colleagues who actually stopped advertising on airbnb because they couldn't get what they used to 😞