Air's 'race to the bottom' campaign

Every corporation has governance and audit standards. You can skew data, but u cannot fake a booked price. If they are indeed doing this, we should all get out of the platform. Just being rational here. I don’t use smart pricing. I use wheelhouse, and wheelhouse’s recommendations are sometimes lower than Airbnb, even though this doesn’t happen often.

I use my spider sense and so far I’ve been able to keep my prices 20-30% higher than the competition. I could probably do the same for you :wink:

No need for sarcasm. I use wheelhouse pricing software and I’m booked twice my mortgage in December, even as a new host with zero reviews.

New hosts are typically encouraged to offer a discounted rate for the sake of reviews. Old hosts are encouraged to offer discounts because the number of bookings is less this year than last year. Hosts in general are now being encouraged to offer last minute and early bird discounts.

So, if Airbnb sends me an email telling me that someone saw my listing and then went with something cheaper, without mentioning that it was also discounted for whatever reason, is not entirely honest as it leads me to believe I am overpriced and need to join the race to the bottom.

The race is real. But what can be done to stop it? The only things I can think of…

  1. Some type of definitive guide to starting with Airbnb that becomes the de facto guide for new hosts in which the race and its consequences for all hosts (including them) is explained.

  2. Unity amongst all bloggers, newsletters etc to ensure that all thought leaders in the short rental space discourage participation in it and, rather, promoting the race to the top.

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I don’t see an easy answer as there’s no easy and effective way to advertise your new rental other than driving down prices. Even superhosts are now finding the market tough. My unit is located in a new complex and I’m one of 6 Airbnb listings in the complex insofar as my searches have revealed. I’ve personally watched my neighbour grow from being zero reviews to superhosts in just a mere 6-8 weeks. They were undercutting their prices all the way until November, when they finally started pricing it at market. Then their bookings abruptly dropped off, the entire Nov still empty. I’m 9 days booked in November, with zero reviews. Price is clearly the dominant consideration in this business.

Absolutely. There was an entire research paper showing the main reason people use Airbnb is price. :’(

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You want a funny “smart pricing” suggestion? UK people will be familiar with Grand National. Others google it lol. Its the busiest Saturday of the year for Liverpool and my apartment is right in the city centre and can accommodate up to 7 people. Cheapest 2bedroom property on booking . com for one night is £450. Cheapest on airbnb is £400. You know whats the suggested price it shows me? £79!!!

Pleaaaase tell me where and how they got that price!! I just laugh at their suggestions

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Airbnb has no idea of the local market. Within half a mile in my city the desirability and price difference between properties is vast

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That’s so true. Know your rental, know your market and know the type of guests you get.

I get mostly tourists in groups (friends travelling together), couples, and young families. My space is large in comparison to most apartments out there, even has a kitchen and accommodates babies. I am booked from May to December if I want to.

Air’s suggested lowering prices is damaging to hosts. Hosts put money and our precious time into our rentals, and that is not worth nothing. There will come a time when this may all end, but until then if you know the value of your offering, then Air shouldn’t be trying to devalue it not belittle hosts. Especially while their valuation continues to rise.

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I think it should be value. What do you offer that doesn’t undercut your price yet distinguishes you from your neighbour?

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I do a quick reply saying the prices are ridiculously below market value. I figure if they get bombed with lots of such replies it might help.

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I think someone mentioned long ago in a similar thread: the reason Air wants us to lower our prices is that their fees are a % but that % changes based on our listing price, and they take a smaller % the higher our price.

I’m grossly exaggerating and over simplifying, but:

If i charge $10/night, they take 10%, they get $1 and the guest pays $10

If i charge $20 night, they take 5%, they still get $1 but the guest pays more.

Air knows the sweet spot of what guests want to pay (depending on the market i think it’s just under $50, just under $80, etc) and they try to maneuver things so the guest pays the most they’re willing to pay while also maximizing their own $/% vis a vis host prices.

They can’t control what we list at, but they sure can encourage.

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I would say it should still be price. It’s impossible for people to search by value, and value is entirely subjective. Some hosts have said lower prices tend to translate into the guest perception of better value. I can offer the best decor , the most amenities and the plushest cushions, but that’s probably not what 90 percent of Airbnb guests want. Unless you want to go all out and offer free guided tours amd cooked breakfast, then that’s probably competing on another level.

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every host in every market is different, so how they determine their price will be different.

I agree, for the guest, it is often price, but I get a lot of young families and the fact that there is space inside and out for their child to run around, and that their child has their own bed, books, and toys they haven’t played with yet, is a value I think I provide that justifies my price which is still low for the Brooklyn market.

Which is probably 30% below what you should be asking… spidey sense works everytime. Put a smile on your dial and soak up the sarcasm… we are debating an unwinnable topic.

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Air are aggressively campaigning for us to drop our rates based on manipulated (at best) data. They do it because it helps them earn more bucks while we earn less. Hosts may be clever and independent enough to ignore and price otherwise (ie. at much higher rates that reflect true value) but SOME hosts WILL lower their price because if this aggressive spampaign. When their prices come down it decreases the newly manipulated true value of other hosts’ nightly rate to some degree - EVEN IF their nightly rate increases. Airbnb are creating an artificial price war in plain sight and using hosts as their tools. This may be dismissed as capitalism or “business” but it not business savvy, independent or sensible to justify, play along or kid ourselves that we are Teflon and somehow this can never affect us. Inasmuch as we are independent and free to choose, we are affected and connected the moment we register as hosts. It doesn’t make anyone less business savvy, communist or a cry baby to admit or expose this reality - quite the opposite. Recognizing this for what it is and flagging it to those connected and affected is knowledge. Knowledge is power and independence and the wisdom to make sensible, informed, independent, business decisions.

… steps of soap box …

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The point of travel and tourism is to stimulate the local economy. Guests can afford to pay, or they’d be staying home. Hotels pay business rates as well as tax so local authorities are compensated more for what tourists cost in terms of rubbish etc… The low paying Airbnb model, where hosts can barely afford maintain their properties, and capital investment is not counted, tends towards the parasitic.

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Let me know when you operate in the Melbourne market and charge $140 a night for a 2BR in Oct as a new host. I’ll be curious to see how you fare with your Spidey sense. I’m currently charging $110 for weekdays and already having trouble filling up the calendar. My nearby Airbnb plus charges this price with a 150 reviews though.

My spidey sense is tingling… rent the rooms out separately, put a set of bunk beds so you can increase max # of guests, appeal to specific needs, choose an interesting theme to set your place apart, etc. Just browse Airbnb for inspiration. Whatever you do, don’t duplicate what your closest neighbor has done if you are hoping to get a different result.

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No thanks. My place is not a hostel and it already looks incredible. Plus, my neighbours sleep 6 and they don’t seem to doing any better. I may be a new host, but I’ve done my market research. Plus, I host remotely, renting out rooms is just a total nightmare.

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