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How well does Smart Pricing work when demand is high due to local events?


I’m curious how good (or bad) Airbnb’s Smart Pricing is. Specifically, how well it works when big events are in town that cause a very short-term surge in demand. My suspicion is that it waits until the supply is low a few weeks in advance instead of doing a good job of predicting the actual demand based on specific local events (vs. just general “high season”) that are scheduled more than 6 months in advance and guaranteed to cause a peak in demand.

For example, the Superbowl will be hosted locally in 2023. I know people that were over 40 miles away and rented their modest homes for $5K/week the last time the Superbowl was local. Will Airbnb’s pricing algorithm automatically go to the high end of the host pricing for nearby dates or, if guests book early enough, will it let them book closer to the host’s minimum pricing?

I recently read a bad-host story from a guest that said they instant-booked an Airbnb listing several months in advance to attend a sporting event. The guest was a regular at the event and knew the listing was conveniently located and the price was really low. About 1 month before the event, the host made a change to the reservation by almost tripling the price and saying the guest could cancel if they didn’t want to pay it. It was clearly market price and the guest knew it. The guest didn’t pay and didn’t cancel, so the host cancelled, knowing full well they could easily rent it outside of Airbnb’s platform and easily recoup Airbnb’s penalty. It’s was a terrible thing for the host to do, but I’m wondering if Smart Pricing failed the host in that specific situation.



After some personal experiences, I wouldn’t trust Smart Pricing. As its sold Smart Pricing is supposed to check demand of properties in the area and increase prices if its high. Yet, it has never worked for me. Best bet is to set holiday policies, reduce the reservation window to 3 months in advance or less, and check prices on your area and manually adjust. Some listings even handle a weekend fee, but mine is a flat fee, but that’s something to take into account.

I ran into some troubles where Smart Pricing didn’t adjust fees for the holidays, and since then its been almost disabled.



Smart Pricing isn’t – Smart that is. It has no way of knowing high/low seasons, major events, etc. It wanted me to set my price at 25% of my current rate, during the height of our High Season and the weekend of a major festival held here. That’s STUPID PRICING!!

I think the majority of the hosts here just ignore it and do not use it/

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OK, well, dang. Something else I need to keep track of, then.

I keep looking at my calendar and wondering what it’s doing.

From what I can see, after a given month is about 60% booked, the price gets bumped up by about 30% for the remaining days. That doesn’t happen until less than a month before, so it could also be taking shorter notice into account… or something.

Also, I see prices in July and August that are 30% higher than March/April, but July and August tend to be the low season for the Phoenix area. Maybe it’ll get “smarter” as the dates start falling into the 90-day advance booking window, assuming I don’t just turn it off.



If you want to set pricing for a high interest event you should never use smart pricing and should set it yourself.

The host in question/you can’t blame 'smart pricing. It is up to us as hosts to know our market and price accordingly.

This was pure and simple an unethical host. However the story doesn’t make sense as airbnb block the dates of hosts who cancel, so they shouldn’t have been able to open up their calendar at a higher rate.



From what I have seen- “Smart Pricing” wants to lowball all of the hosts. It is constantly giving me tips about my rates which are very reasonable to be much much lower. Seriously though if I rented an entire 600sqft suite for $25/night- I’d be an idiot. Just ignore it and set prices that work for you, your area, your seasons, and your events. ABB has no way of knowing all of these factors for every host around the worls

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Smart pricing relies on the input of hosts. I recently raised my base price to $50 in smart pricing. Prior to that it was $42. Now I’m seeing days when it sets my price at $51-53 and they are getting booked. I typically wouldn’t be adjusting days ahead by one or two dollars so those extra pennies are going to add up. I’d say smart pricing has already put an extra $15 in my pocket. I know that sum is laughable to many here but when you are at my price point it matters.

People blame smart pricing and price tips for low prices but it’s not the fault of the programs it’s the fault of other hosts.

That said, it doesn’t know to set your prices 10x higher for Superbowl 2023.



That’s a great tip @KCC will try it.



As mentioned, it would be easy to rent outside of of Airbnb’s platform for such a very high-demand event.



I’ve created these type of algorithms in my past work, so I get how their system operates. I’m unconvinced that Smart Pricing will help any but the less desirable listings.

Airbnb’s algorithm doesn’t seem to be able to predict events; it’s reactionary. It just sits there watching the searches for particular dates. More searches for certain dates force the prices up. But what if you’re a fairly desirable listing?

Well, one of those early-birds probably went ahead and reserved your place at the “normal” market rate while Airbnb’s algorithm was still listening, not taking action. It’s only after the nicest places are picked off in early searches that Airbnb’s coding says “Aha! Big event/holiday going on this weekend! I should raise prices!” (for the mediocre listings still left).

There are better third party services; I tried Wheelhouse and found theirs much more predictive and I was also able to teach it the seasonality for my location. I didn’t buy in after the trial, but I liked the product.

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True sadly…



Smart pricing is 3 to 4 times lower than actual rental rates in my area. I only look at it for a good laugh.



Why would you set your base rate 3 or 4 times lower than the actual area rates?



Since Smart Pricing is based on other hosts’ prices, it does not do a good job predicting prices a long ways out or for special events. I personally price high and drop my prices if I don’t get a booking so that I don’t accidently miss out on taking advantage of a major conference that has come to town that I didn’t know about. For something as huge as the Superbowl, you’d just have to pay attention and be aware it’s on the horizon.

AirBnB will also give you a boost in the search results if you use Smart Pricing or something close to it. “Competitively priced” is one of the major variables in the search ranking.

I watch my market closely and notice my smart-pricing tips drop when one of the STR apartment buildings slashes their prices from $99 to $49 a night. One day Smart Pricing will recommend $64 for a weeknight, the next day it will suggest $43. Smart pricing does not seem to account for their $65 cleaning fee in comparison to my $30 cleaning fee.



Wow, yeah, that seems crappy. Hopefully, it factors into the average guest’s length of stay or something. Otherwise, hosts will migrate to huge cleaning fee and low nightly rates similar to the way eBay sellers have low prices and huge shipping fees.

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I do think we’re headed that way. In my own city,the cleaning fee is no longer included in the price when you search for listings. So, I’ll occasionally see places listed as $39 a night on the map with a $150 cleaning fee. This change prompted me to raise my cleaning fee from $20 to $30, while I notice the other listings in my price range are charging $60 or more.

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If Airbnb is going to go down the road toward being like hotels (as I suspect) then I wouldn’t be surprised to see them eliminate the cleaning fee option. This would hurt hosts who try to make a one night stay more costly but Airbnb could compensate by giving hosts more options in setting prices. Lack of pricing transparency needs to end. Places that show they are $10 on a search with no dates inputted and then $85 when you put in a date shouldn’t be allowed.

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AirBnB does seem to be of two minds whether it wants to be a hotel service or a vacation rental service without any internal consistency. Guests are not accustomed to paying a cleaning fee for a hotel, but traditional vacation rentals typically have a cleaning fee that is $100 or more (and an actual deposit for that matter). My parents’ generation is appalled that my cleaning fee is only $30 because they’re used to traditional vacation rentals, which they used to book through travel agents in the pre-internet days.



The VR’s I’ve rented (all two of them!) had zero cleaning fees. One was $135 a night (Airbnb) the other $750 a night (VRBO) so I don’t think it was related to the price. We shall see. It’s still a newish platform.



I tested the smart pricing with no base rate first. It suggested around $43 a night. My market will get more. I could set the base rate at $75 but then smart pricing with suggest $75. Do they calculate there suggestions based on square footage? without taking into consideration other factors?


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