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OK, I thought this was supposed to be helpful information:
“Your listing appeared in search for this night but people booked other listings that are about $38 less per night”
They’ve got to be kidding!!! Our listing is $42/night! People are charging $4 a night around here?!?!
Wow. I would screenshot that and send it to them, calling them out on their pricing suggestion BS.
Hosts here have discussed Airbnb’s ‘price advice’ on here on a fairly regular basis.
The general consensus is that we ignore it and set our prices based on our own knowledge of our markets.
There is no point calling them out on it.
Quote from Airbnb:
At the same time, we feel like it’s our responsibility to provide you with the data that is going to help you figure out the price or each night so that you’re achieving whatever goals you’ve set out for yourself as a host. To this end we often put pricing information in front of you.
We tell you what the prevailing demand is in your market, or we might make specific pricing recommendations.
And I want to underscore that even when we put a specific price in front of you, this is not a judgment as to what we believe your hospitality and what your home are worth. It’s not an indication of how you should be pricing that night. We believe that we’re just putting information in front of you that you can use to determine the right price for your listing.
Some hosts have told us that they really appreciate the information and they love this information and other hosts have told us that it’s not so useful.
Best thing is to just pay no attention. It’s only a daft computer program that knows nothing. 
I get frustrated with it too! Some hosts take the suggestion and drive prices in the market down. I just stick to my guns and so far I’ve been doing OK. My prices are a little on the high side, but I find that I get better people with a slightly higher price. When I dropped my price to $40 (our 4-year hosting anniversary) I got really shitty people who expected the taj mahal.
Have a look at Beyond Pricing. There is a free trial. It provides good statistics on what other people in your area are charging and their occupancy rates. I have put my prices up by about 15% since using this software. I am not sure if I will continue to use it once I have to pay for it but the info they provide is good.
Actually you can’t rent for $4 a night. The minimum is $10US. Double dummies.
I agree with what those who say to ignore the Airbnb advice. I have dropped the price during a slow season to see if it made any difference though.
This wouldn’t apply in your case however.
Dear Josiah,
I get those messages all the time. I try to find a happy medium with my price, somewhere in the middle. But, those messages are slightly annoying. VRBO does it too. Abb is also constantly pushing “Smart Pricing.” How smart is it to charge a different price every day? It looks ridiculous if your prices are all over the map. Just ignore them and do what’s best for you.
Once in a blue moon they encourage me to price higher. Go figure.
Smart pricing sometimes sets my prices higher. Which is fine because people are willing to pay. When they say higher, I listen 
@beneluigi - Hiw does VRBO push prices down? We get most of our bookings from them, and I’ve never once received “your price is too high” from them. Have I just been lucky?
Unfortunately, whether you like it or not, dynamic pricing is one of industry’s cornerstones in the 21st century. Airlines, hotels and other industries used it well before this century. Even bars and restaurants that offered happy hour or early bird specials were using a primitive form of dynamic pricing years ago.
It’s good for the company and good for the consumer.
Airbnb’s suggestions are just that, suggestions. Smart pricing won’t go above or below the parameters you set. So we hosts are still in complete control.
https://triblive.com/business/headlines/10454334-74/pricing-dynamic-prices
Amazon. I’ve learned when I see something on Amazon that is a good price I click buy. They change their prices all the time.
I get the same message from VRBO that I do from Abb, X number of people looked at your rental, but chose something else that was X% cheaper. Maybe they don’t do that to you, but they do me. I get very few rentals from them anyway, 95% of my rentals are from Airbnb. I got a message from Abb today that said “Three people considered your rental for November and December but didn’t book, instead they booked listings that cost an average of $20 less a night.” I have 0 nights available in November and 5 in December, and to top it off they encourage me to charger MORE in December than I already am! Clearly, their projections are in conflict. Just find what works for you and stick with it. Do you’re own market research. When you Preview your own rental you will find your competitors displayed across the bottom. See what they’re doing and if you need to raise or lower your price.
If you’re not getting enough bookings try running a Special. Post it in your description like “Special Offer for Airbnb Members Only, 15% discount in March.”
@beneluigi -
I get the “you lost a booking” once in awhile from VRBO. Only about half of them are true “losses”. Many of them are more people than we allow, or have some dates that aren’t available, or are places that we don’t consider competitors (such as a one-bedroom when we have three, etc.) They show a comparison between our home and the “winning” home, such as amenities, how quickly we respond, etc. But I have to go look at the competitor to estimate the price.
But I’ve never, ever received one that explicitly pushed us to lower the price, though.
I’ve often wondered if after you buy something the price goes up, or at least sale prices are no longer offered. I feel like I’ve had this happen several times but can’t prove it.
Just had the same suggestion for their stupid email…drop your prices in January and you will get more booking…I have FOUR days available in January! Why would I drop my prices?
I am starting to think that they just rotate the emails and it isn’t an algorithm at all. The percentages quoted are always the same 97% for demand on particular dates, Demand has dropped by 13%…never a change in those numbers.
I bought a really nice desk on Amazon for a great price - 200 dollars cheaper than anywhere else I could find it. It was such a great deal I thought it might be a scam. Within minutes of my buying it, the price went up to the same price as everywhere else. It wasn’t a scam, it wasn’t used - I was just lucky!
I suspect they use dynamic pricing on those items to see what the market is truly willing to pay.