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 10
Auckland, New Zealand

Airbnb have there worldwide starting prices currently set around $28 per night regardless of where you live so maybe that's what they consider as not been discriminatory.


It's a very unusual way of marketing a service that has considerable variables.


it's "comforting" to hear others who have been stung with "prompts "

alas there are Laws in every country relating to Consumer Guarantees Acts, Fair Trading Acts, Commerce Commission, Tenancy Acts, the list goes on, that are applicable and I understand that in New Zealand, as with other countries there's investigations going on


As a suggestion, if you put Airbnb into G o o g l E, & under "news" in G O oG l e you can keep abreast with what is happening where with potential and current legal & other issues relating to Airbnb.


That said, it sucks that anyone could inflict on people to not even cover basic essential cost of living costs as a result of there "prompts" to provide discounts x 2 at different percentages only to be stung with finding out that you have unwittingly given a Guest a 43% discount when you already had your property offered at the lowest possible rate to commence trade.



Level 3
Hanover, MA

New host here. I am very frustrated as I realize tips had me put  the price way too low,  and does not seem to calculate the percent off that it pushed me to do as a new host.  Now I have a guest booked for the next three weeks for a about a fifth of what the price should have been. I want to cancel but I do not think I can considering I have no reviews yet other mind good reviews.

Level 2
England, United Kingdom

its hard to get bookings with no reviews and what i did was to take a handleful of two day bookings to get my reviews up and then set your price to wat works for you. i have a four star hotel opposite me so i check their prices and try to undercut by 45 per cent. also look at the calendar ahead sometimes wen events like marathons have filled up the hotels your price will rise. so try not to open your booking window too early as last minute people sometimes are happy to pay more.

Level 8
Takoma Park, MD

I am one of the "original-style" AirBnB hosts. I rent a spare bedroom and an in-law unit on the ground floor of my home, and I've been grateful to AirBnB because my income from this platform contributes a good share of my mortgage payment each month.


However, it seems clear that their business model is to squeeze the hosts in order to increase bookings and revenue for themselves. Everyone here is familiar with the stories of nightmare guests doing extensive damage or causing other problems and AirBnB not helping to make it right.


I also experienced a guest who showed up to her reservation with more people than originally booked and told me she wouldn't be staying there herself, then upon seeing the room was unhappy because she hadn't read the listing well enough to understand that it was a single room and not a separate bedroom/living room (trust that the word "studio" and "single room" were all over the listing and every corner of the room was photographed making it clear there was no other room). She called AirBnB to complain and was given a full refund on check-in day despite my Moderate cancellation policy. AirBnB overrode my cancellation policy for a guest who was violating TOS and couldn't even properly read the listing she booked. How is that fair to me as a host?


Now AirBnB is constantly pressuring us all to lower our prices past the point of profitability. Their Smart Pricing tips are consistently around 50% of what I can fetch and keep my calendar full, but I check my comps regularly and see many of my neighbors appear to be using Smart Pricing and I worry that 1) my current pricing won't hold out much longer and 2) people will increasingly expect Ritz-Carlton quality for $55 because my neighbors are renting entire apartments for $29/night based on AirBnB's recommendations, so people must think I'm offering something extraordinary to be charging nearly twice as much. But there is a hotel a mile up the road for me that charges more than $200/night for a simple room with no kitchen. The market can support much higher prices than AirBnB is foisting on us.


And as someone mentioned above, now I'm being encouraged to offer discounts for last-minute and early-bird reservations - I have always set prices *higher* when they're more than a month or less than a week out, and I still get plenty of bookings at that higher rate. Why does AirBnB want to undercut our opportunities to earn greater profit? 


It reminds me of how Uber is counting on their drivers not factoring in the cost of wear and tear on their vehicles undercutting their profits when they drive for rock-bottom prices. AirBnB seems to be counting on us to not factor in the cost of restocking supplies like coffee and shampoo, furnishings upgrades, repairs and maintenance, regular discarding/replacement of aging linens, energy/water cost of laundry, and so on. At $29/night all of my earnings would go right back into these costs leaving me with no actual profit.


It also costs me $150 to have my two basement units professionally cleaned. Nobody is going to pay a $75 cleaning fee for a $55/night room, so I charge a $35 fee and have to make up the extra $80 out of my profits from the nightly rate. What kind of cleaning fee is anyone going to agree to pay for a $29 listing? The cost of the goods and services hosts rely on are fairly inelastic for us, but AirBnB is misleading inexperienced or clueless hosts into charging less than it costs to run their units and driving down prices for the rest of us at the same time.


And on top of this there has been a huge uptake of people messaging me asking for more than my listing offers for less than it advertises - just this week someone receiving a 12% automatic discount for a week-long stay submitted a request asking me if I could reduce the price further and waive the cleaning fee! Another person Instant-Booked my listing with an 11 AM check-out time and blithely informed me in her initial message that she would be checking out at 6 PM. 


It would be nice to feel like AirBnB was my partner and wanted my rentals to be successful and profitable. But all they care about is getting their service fees. They don't care if we can't even recoup the costs we incur striving to meet their standards, they want us to provide all essentials and 5-star experiences every time for literally 1/10 of what hotels in my area charge. Why, ABB, please can't you have some empathy for us and fix your smart pricing tool so that it's not encouraging hosts to compete in a race to the bottom?

Level 2
England, United Kingdom

i dont charge a cleaning fee and i often find the place is spotless because people tend to play ball and appreciate no cleaning fee. also people are unreliable due to transport and if you live in a city as i do so you just gotta roll with it. if my prices are too low i dont rent my place out and usually airbnnb puts my prices back up and i open up and get bookings. they did give me superhost but i cancelled it cos people think superhost means 6 star hotel but i am very honest and never get any problems because of that. alsoi have top of the range beds and linen and towels and kitchen has top quality washing and dryer machines and dishwasher and all sorts of cooking ovens and gadgets. lately people havent been leaving reviews which is due to them spilling things or blocking the sink with oil so they rather not leave reviews in case i give a bad one but i never do so its a shame

Level 2
Cottesloe, Australia

I am really quite disgusted at how Airbnb is hell bent on driving down price when the market will ultimately determine the correct price point. Ive been hosting for 5 years and continue to invest in maintaining the quality of my place and providing 5 star accomodation, but it seems Airbnb have fallen into corporate greed, using the old weakest marketing ploy makes no sense to me and opens the door to disintegration of what was a beautiful thing. You cant tell me there is competition from hotels who have been forced to drop prices because of AirBnb, most guests wouldnt choose hotels anyway. It now feels like I am being used as fodder for Airbnb to built

market share, If we continue on this path of driving down price, the ultimate cost will be to destroy the foundation of Airbnb, as returns become more and more marginal its not worth the risk...this strategy simply does not add up for me. 

Level 1
San Diego, CA

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Airbnb allows saturation of their market  with numerous listings per building/neighborhood in many cases.  Airbnb seems to rapidly be falling out of touch with its original hosts.  Having been onboard since inception, I am finding that Airbnb is becoming less and less sustainable.  It is now the platform of shameless thrift shoppers, adult filmographers, drug party facilitators, bachelor/bachelorette party throwers, etc.  In many cases, the concept of respecting hosts and hosts' property are long gone.  Guests are emboldened by the lack of consistency with Airbnb enforcement of host house rules and the Airbnb terms of use.  Just plug Airbnb into an internet search you are quickly educated on how to evade paying for damages caused by guests to host properties.  


From a community "sharing economy" based platform to a $25 billion incorporation.  As I am watching the predatory nature of the "new" Airbnb grow, it seems pretty unsustainable for the honest host that is actually doing honest work.  As the Airbnb highjackers come in droves, quality guests are deminishing as are the integrity of many hosts and their properties.  Fraud is running rampant, "trust and saftey" seem more inclined to sabotage, evade and disrupt, and all while Airbnb is asking hosts to take greater and greater liabilities.   I have neighbors trying to cram 12 people into three bedroom houses, causing major issues with parking (five cars at a time in many cases), hosts that don't monitor their properties (never knowing the covert parties, disruptive guests, adult filmographers, etc.). 


As Airbnb aggressively piles on the host responsibilities, their commission bottom line is simply growing.  Hosts become dependent on the extra income and voi la, a market is born of dependent sellers willing to dimenish the quality of the platform to meet their own bare minimum bottom line.  Hosts are motivated to lie to landlords, cheat their guests in an effort to sustain their new dependency and guests are driven to ever lower travel expenses, flashier digs and more freedome and space to throw that maybe not so savory social event.  


This is made possible, as Airbnb seems to now behave like any money hungry corporation would.  Make money any way you can, even if you have to sacrifice your original client base.  Airbnb is becoming more and more tyranical because they know many of us hosts have invested in now unsustainable short-term rental properties.  We are in an over saturated market that keeps growing Airbnb commissions, despite hosts failing. As a community, we need to support each other.  We need to continue the conversation and insist Airbnb start to reinstitute fairness, transparency, honesty and integrity back into the Airbnb "community" it was claimed to be.


The below image is in regard to a resolution regarding smoking.  The guest left cigars, ash and other smoking paraphernalia strewn about the apartment.  My house rules have a no smoking clause, articulates the cost of smoke abatement, photos were presented and the claim was finally settled to the entire amount of the request after more than three submissions and almost six weeks after the incident.  


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Level 2
Belgrade, Serbia

The price suggestions are way too low. I don't know how they calculate them, but dumping the prices doesn't bring a good long time revenue for neither one of the steak holders. Just think about it - if all would follow the price suggestions, then the new low prices would become a new benchmark...after a while all the hosts would just dump their prices, and after the initial rise in demand, they wouldn't get more visitors (every demand has a top) and then what?!

Level 10
London, United Kingdom

I think I should also provide a bit of balance to my earlier post...


maybe we all just just need to accept the air bnb bubble had burst..I've had two good years, saved some money for my little crazy project but it couldn't last for ever..perhaps we should all be a little grateful it's been this good this long..after grousing last night I did some math and if I earn £25per night I'm still getting the going rate for a very small room on long could look at my getting half what I got last year and sulk or I could look at it as I'm still getting double the long term rent!


Moving on from that last night I saw hosts saying "we may have to put our THREE PROPERTIES back into the long term rental market" and to that I say.."you should!" How can people moan about money with 3 properties on site!  I myself have taken my only bedroom from my one bed flat and converted it to an annex to have money to live on while I finish a building for a social project on the coast , I earn little enough that I'm still not eligible to repay my student loan.hosts with multiple properties for investment need to keep their heads are causing a problem.


Level 6
San Diego, CA

I am not clear as to whether denouncing sectors of the community is a purposful approach.  Wheter a host has a room, a house, or an apartment building we should behave and engage the platform as a community.  In order for any of this to pan out economically, issues need to be reviewed, discussed and if possible improved.  Competition is a result of any thriving free market.  However if a large coporation is infringing on the "free" aspect of the market it of course is not sustainable to the smaller participants.


Airbnb seems to be growing in the marketing department, as they encourage new droves of millenials, business travelers, etc. to their platform.  There seems to be very little growth of support to hosts that are having to deal with the dynamic, and sometimes catastrophic changes.  Have I seen a dramatic decline in revenue over the last year?  Yes at least a 50% decline, that's major.  I have also seen a sharp incline to the number of unsupervised, poorly managed properties that ruin the schema for everyone else in the neighborhood. 


I am processing damage claims on the regular now, as more and more travelers hop on board in an effort to find "cheap" accommodations.  The integrity of guests seems to be on the downward path as well.  Drug use, guest fraud are regularly issues with my rentals and airbnb seems poorly equiped to deal with it.  "Trust and Safety" seem to be the opposite and untrustworthy.  I am having to spend numerous hours enforcing house rules, fighting for the reimbursement of damages and educating "customer service" of the state law regarding tenant/landlord law, etc.  In many cases it seems Airbnb employees are comfortable with a tyrancial approach to resolution cases.


Obviously there is a lot of potential for hosts on Airbnb.  It just has to be realized.




Level 10
London, United Kingdom

It’s charming you believe there’s an air bnb community!

Level 10
Como, CO

July was my busiest ever month so for a laugh I looked at the price trips, limited availability so you would expect to see higher prices suggested.


Not one.


Looking forward exactly the same.


Just ignore it.

Level 10
London, United Kingdom

I've hosted 2.5 years now. I entirely agree with your experience, last year I was averaging £80 per night in this the tool is recommending below £50 per night or even £35! I've never seen it so low. I raised it with support and they said it's very slow and hosts have been calling about it, I was told this was July/august but I've checked ahead and prices much later are just as appalling. I can only think this is the ridiculous approach of speculators, I recently heard individuals are canvassing local landlords for rentals they can air bnb..I think the site is getting flooded with rubbish properties and this can only be the future..lower prices as competition increases.


i also have real doubts about smart pricing me using this tool blindly allows air bnb to control your properties value..they can drive prices down using it and maximise traffic to the site. Think about it what's to stop them shelving your listing until you think your price is too  high and noones interested..then when you drop the price they throw it up in searches..and it rents..and you just think.."well..that's what it's worth I guess"


i dont know what we can do about any of this. 


Ive been told by air bnb they don't want uninteresting property flooding the site, why they think the 90 day cap will help I don't me it seems obvious they should be also capping the number of listings an individual can have at 2 or 3.

Level 6
Buenos Aires, Argentina

@@Marcus21 Agree. Indeed prices are so low that for many of us it is not worth the effort to keep hosting. Sure, I also believe that the future is crappy listings at the price of a cup of coffee because there is no way to stand up for quality at this prices. Eventually, a lot of hosts will leave the site but new will come until with a more crappy but cheap place to offer. The goal is clear for me. Declare the war to the hotel industry but using hosts as their frontier soldiers.  


Wahtever I don't think people are making their choice when they down price their listings. I believe that there are many hints on the site that point people to follow that direction. Name it Smart Pricing, Price Suggestions, the Compare Pricing tool, the several emails for bookings you have lost in hands of another listing.


Even guests are now educated to chose cheaper listings. The search algorithm is now taking price more into account than before and if you are far from what they think you should charge, then your visibility will decrease. So guests now are presented with cheap listings instead of good-value listings which is not the same. And there are other hints for guests like the dates selector that tells you which dates have the most available listings, or the travel trends, or the indicator of how many listings are left. By having those tools guests can decide if it is better to wait until they book. And believe me, they wait!


This is cycle process that continuously forces you to low your price by reducing the exposure you have. So you might think that by reducing a 15%, now bookings will come steady but wait a little bit until you are asked again to drop another 15%. This only ends when you lost all your money and you decide it is not worth it anymore. Hope Airbnb is clear that when people leave VR to long term local rental there is no going back. When you unfurnish, you don't furnish again.


Hope they rethink what they are doing,


Level 1
San Diego, CA

As a host here in San Diego, CA with over 5 years of hosting experience, I am literally at 1/3 the income I was at this time last year.  With a saturation of low quality Ikea type skeleton properties and poor quality of guests now saturating the platform guests are more driven for that cheap crash pad versus residential experience.  We are having to decline requests because potential guests frequently are trying to bypass no party policies, maximum occupancy rules, etc.


In my city there are extensive taxes, and airbnb seems more determined to address their bottomline than the well being of their hosts.  At this rate of decline, our properties are no longer going to be viable.  If airbnb doesn't step in to up their support of hosts, we are going to have to pull our three properties off of the site and convert them back to traditional rentals 😞

Level 2
New Orleans, LA

I think Airbnb, through the use of their price suggestion tool, are artificially suppressing the prices to encourage people to drop out of the market to deter over saturation. Not good or bad, just gotta hang in there. Also, they're trying to keep Airbnb prices competative in light of the hotel lobby fighting for every nickel and dime.

Level 2
Chicago, IL

I decided to give the "smart pricing" a try despite being pretty skeptical about AirBnB's motives, but I have to tell you, I've had back-to-back bookings ever since.  But if I'm being more competitive than my neighbors who have AirBnb because of these price adjustments, then doesn't that amount to me undercutting them?  Then isn't that a race to the bottom?  I don't know enough about economics to answer that question.

Level 2
England, United Kingdom

property prices have been defying the laws of supply and demand and banks have been propping it up with buy to let landlords and dodgy foriegn investors, so these people are about to get slaughtered by the likes of the little people with a spare room. Capitalism is about to crash we are heading to a more open form of communism, in the UK we have had communism for years but its been dressed up in new names called capitalISM ISM means similar to. Communism is Central Bank (check) and destruction of christianiy (check) and destruction of family patriarchy (check) so we are heading for a crash as these are the bed rock of stable society and with out it is economic disaster.  See fall of Rome you will see the exact same signs growth of welfare state and all the above oh and tons of trash entertainment called bread and circuses

Level 1
London, United Kingdom

It is a disaster! Airbnb wants us to make it cheaper to book on Airbnb then to pay the proper rent with all the bills included!? Nonsense! What are we? A charity for tourists!? In London the rents are the highest, so should be the airbnb fees!

Level 1
Port Republic, MD

Hi Claudia,


     Please enter thru your Price Settings on top right. Remove their Smart Settings. AirBnB makes more money the more often you rent despite wht you make. Set your own prices, adding premium pricing for weekends and special events for the ENTIRE year.. I make mine higher than most, rent less but have more desirable guests when I do!


~~~~_/)~~~Terry **

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