Air's 'race to the bottom' campaign

Turn lookers into bookers

2 people who looked at Pretty Sweet Suite - Free WiFi for September and October ended up at listings that are an average of $18 less per night. Here are a few examples of reservations that could be yours next time:

Pts_similarlistings

1 guest

$15

less per night for Oct 17-21

2 guests

$21

less per night for Oct 19-24

Lowering your price could help you get more bookings and actually lead to more earnings over time. As your total bookings increase, your overall earnings can as well.

This is one thing that gets my back up.

  1. I am booked solid until 17 Oct. History tells me that I will get bookings in future. This scare tactic doesn’t apply.

  2. My place goes for $88/night. These suggested discounts are over the top insulting, particularly when I know I will get my $88.

  3. How would this impact someone new / anxious / trusting in big brother? I get a constant stream of these kinds of messages so it must be working. Even if we chortle as we see these messages coming in, our back pocket is being hit by them and if you read them on a regular basis it is more likely to start invading your sensible thinking.

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Yup. Airb keep suggesting I take a third of my price, compared to similar listings. Those listings are quite often a half hour walk further out of town, and with no parking.
I hope my resolve doesn’t crumble when I’m a bit short on bookings, but now I’m worrying about how many hosts get these emails and say “better get my prices down quick!”

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No one knows your market, strengths and weaknesses like you do. I don’t worry about a “race to the bottom.” After 4 years I don’t see much difference in my city. Others have noticed prices went down as competition increased, that’s the free market for you. In my city the people with the really low prices that I think to myself, how do they do it? They aren’t still around. Those of us at the same price point for similar listings offering a good product at a fair price… we keep racking up the bookings and reviews.

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The more cheap listings they get the more customers (aka guests) they will attract building their brand as the Dollarama of the hotel world. If you start counting your real costs (which includes your time) as an expense, in many cases LTR wins, unfortunately.

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I used to get these emails but I don’t anymore, although I do see them on the app/website. I drafted a standard response: “You are indicating by this email that my 3 bedroom entire house should be listed for less per night than the local Best Western. NO THANK YOU.” and I would click the option that the email is “not useful”. I haven’t gotten one of the emails in awhile. I doubt there is a correlation - as they are probably form emails, but telling them where to politely stick it made me smile. You have to have pride in your place! :smiley:

At first, it scared me into wondering if I was doing something wrong, then each time I looked at the competition I realized that yes, their listing was cheaper but it was also farther away, accommodated less people, didn’t have a hot tub, wasn’t as amazingly awesome as ours :wink: … and I stopped worrying about the emails.

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yeah, the data behind the email is probably just the lowest price in your area, at that time

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I have been able to increase my rates over time, but I’ve also been able to invest in my listing to improve it. I’m not worried about being undercut but I may feel different when bookings slow down this fall.

This summer, smart pricing said I should RAISE my prices to $180. I charge $150 for weekends and $130 for weeknights in summer. My listing is a 1 bedroom MIL apartment in a residential neighborhood near downtown Seattle. However, if I went much higher than $150 I wouldn’t get many bookings and I also got more 4-star reviews and dinged on value.

In fall I’m charging $100 on weekends and $80 on weeknights. Of course smart pricing is telling me to drop my rate to sometimes as low at $50 a night for fall. I know from experience I will attract guests who are more trouble than they’re worth, so I don’t intend to lower my prices. When I search specific dates, I’m one of the only listings left with my amenities: private parking, 1 bedroom (as opposed to a studio), washer/dryer, etc. So I must be patient and wait for bookings. And they do come. I’m booked into the second weekend of October.

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This is key and what i learned two years ago. If I drop my price I will get booked sooner, not more. Because I can take last minute bookings and prefer them in some ways I have no reason to drop my price.

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I call fall and winter our “road trip season”. We get lots of last minute bookings from people on road trips around the northwest, looking for somewhere close to downtown but with free parking. It used to be stressful to have few bookings, but I’ve learned to relax, only drop the price a tiny bit, and the bookings come. IDK where you are @Xena, but with free parking and a w/d I would imagine you’ll get a lot of the same.

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Yeah, I got that email as well. There’s an unsubscribe link at the bottom and went for that. :stuck_out_tongue:

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Thanks Xena, it’s interesting to hear that. Sounds like your high/low season has pretty noticeable fluctuations. Mine not so much I guess. Air’s calendar price suggestion has shown the odd weekend or future date as higher than my list rate but by far the suggestion goes the other way by a lot. There are a lot of factors affecting the true value and last time I checked air does not seem to factor in even easy things like public holidays and festivals which see our city’s hotels fully booked. That’s a lot of data - clearly too much for their algorithms - but it drives home the one old truth… a little bit of knowledge can be a dangerous thing. I completely disregard Air’s price suggestions, high or low, because I know they don’t have the means to provide accurate ones and I seriously doubt any data research companies could either. I also know there is a huge conflict of interest for air evidenced by their aggressive ‘drop your price’ email campaign and generally unrealistic low nightly rate suggestions that show up on my calendar. My price stays the same, my place gets booked out and Bam, there is my evidence that following their suggestions would hurt my bottom line unnecessarily (and probably attract the wrong types of guests).

A new point I’d like to make on this topic is that whether our price point appears to be affected or not by Air’s attempts to influence significantly lower nightly rates, my best guess is that it IS whether we want to admit it or not. Here’s why: in all probability air use these tactics because they are working to some degree. So if some hosts are biting, prices ARE artificially lower than they should be, even if they are 10% higher than last year. See where I’m going with this? Your price perhaps should have been 20% higher or whatever. This is my theory anyway. I’m interested in other ways of looking at the soft science of economics. Ie. Could get people rebelling and raising their nightly. Who knows!

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You can count on me to be a part of the rebellion. Where do I sign up?

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I don’t get those emails so I must have unsubscribed at some time I suppose. However, I wouldn’t take any notice of them anyway.

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Yeah. It’s sad to see where this is all heading because so many people will just follow airbnb’s cues and take everyone else down with them.

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Let’s do a go fund me and we’ll hire some big guys with dark sunglasses to give them a shakedown.:rofl::rofl:

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I used to think it was just Airbnb’s scare tactics, but on a more logical analysis, their algorithm simply records what a person books after clicking your listing and moving on, it’s just plain data. I observe my prices everyday and so far, Airbnb has been reliable in terms of the prices they recommend. You may ultimately still be booked at rates higher than Airbnb’s suggestion simply because:

  1. Availability is limited and those reservations with Airbnb’s observed prices have already been booked up. So you need to be aware of your local supply to understand whether Airbnb’s data is useful for you. If you are in an area where there are only a few rooms and their calendars are all booked up, you don’t really need to lower your prices.

  2. Also associated with availability, even if calendars are not full, its difficult for host and guest to meet each other terms of the dates available. One person might be looking at a 3 weeks booking in November, and the other listings have 2 days booked right in the middle, but pretty much empty for the rest of the month. Your listing happens to be totally empty for the month, so you get the booking, even though your prices are higher.

Ultimately Airbnb is a corporation and while they do manipulate data, they are unlikely to lie about the prices booked. It’s our job to do our own data analytics.

Last, but not the least, Airbnb’s audience is still largely price driven. Most customers probably fall in the segment where they don’t want to underpay and get a crappy experience, but don’t want to pay as much as a hotel. As Airbnb listings grow, the more listings there are, the lower the prices become over time.

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@Daniel_Lin - I disagree that the Air algorithm is simply based on what guests book after looking at my listing.

I did an experiment a few months ago. I listed a Friday night in high season at $700 US per night and the next night (Saturday) at $1400. Air “smart pricing” told me to price Friday night at $350 and Saturday night at $700.

I acknowledge that we are in a small market with very different kind of properties, but clearly all Air was doing was telling me to cut the prices 50%. Nothing smart there.

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“Airbnb is a corporation and while they do manipulate data, they are unlikely to lie about the prices booked.”

I like your sense of humor

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Maybe Airbnb’s algorithm is a percentage based recommendation engine?