According to airbnb they take 70 different factors into account. The market, i.e., other hosts prices, certainly must be one of the factors. Here in my town they’ve tried to tell me I should price as low as $19 as recently as last winter. There are places in town that cheap but if there weren’t why would a “smart” tool think that was an acceptable price? Because other hosts are booking rooms at that price.
Why do you think it’s not based on other host’s prices?
Where I live they recommend £18 - £68.
Absolutely no-one prices under £24 and absolutely no-one prices over £50
And I agree I price a bit more than my competitors because that’s the income I need to generate to make it worthwhile for me.
So you think it’s not based on other host’s prices due to how it works in your market. And I think it is based on other host’s prices because of how it works in my market. LOL. It just makes sense to me that the pricing in the market has to be one of the 70 factors. And maybe if I was a business school grad I could make a persuasive argument. Not that I really care very much.
I used to advise people not to use it but I would now say that it’s fine as long as you make sure to set a base price you can live with.
It’s not that I don’t think it’s based on other hosts prices but that there are a multitude of factors they take into account. So how much bearing other host prices have I am really not sure.
I agree I set a base price I am happy with for SP, but they have never got me higher than it in the last year so seems pretty useless.
Feeling a bit left out here, we don’t have Smart Pricing
What we have is Price Tips though!!!
My observation is that if one of the STR buildings in my market slash their prices, the price tip amount drops. So, I concluded that the price of other unbooked listings is a variable price tips are based on. Price tips also based on what rate “successful” listings have been booked at. Cheaper listings are booked first, so that drives the price tips down. I wish the price tips were based more on scarcity because I might be the last bargain place in my neighborhood and it’s still telling me to drop my prices.
Not for us. Their SP has been the same for the last year at least.
I think he may be talking about the price suggestions? Which are a joke.
When I was first building my Airbnb reviews and listings, I offered less expensive rates but they were still above the price tips. Now that I’ve sunk thousands into the Airbnb and substantially improved the property, guest experience and comfort, I charge more.
I can rent the same room out for $500/month to a roommate who will bring their own stuff. If I go by Airbnb price tips, which want me closer to $25/night, I’m at less than $750 for a month plus I have to pay tax on that. When you calculate in all my time and effort cleaning, time I spend managing reservations on the app etc its not worth the extra $250/mo. Then you have the cost of guests wrecking things like towels, the carpet, sheets, TV remotes. When you count in the slow season, at $25/night, you’re only going to net an average for $500/month anyway.
And that $750 is if you rent out 30 days a month which is unlikely.
However for people who do rent out a lot and have no problem with guests wrecking things that money looks pretty good. And roomies provide their own things but there are also drawbacks to them. I’m not going to rent my place out for $25 a night but I can see why many people do. For some people it’s more money and less headache than roommates. I had a roommate in the 9 months prior to starting Airbnb and even at $25 a night I prefer Airbnb.
The same applies for a whole house rental, many previous full time landlords would rather not deal with full time tenants. Tenants and roommates are long term relationships which are harder to manage. If I do not like my guests they are leaving on Sunday.
All true points. I go back and forth on which is more important.
My base price is $69. Max is $125. My absolute lowest manual setting in off season is sometimes $59. Smart pricing has recently been trying to get me to “increase my bookings” by lowering many of my nights to $30-$32 as far as three months out when I will be well into my busiest season. I don’t understand how that is a result of my base settings. Am I missing a setting somewhere?
it’s the fault of other hosts. Other places have booked dates in the future at those rates in your town.
That’s my guess, I’m not an expert.
Just today I got a tip telling me to lower my price to $36. A few months ago $36 wouldn’t have been crazy out of line; now that my base is $50 and I’ve been booked the past 16 days in a row by 8 different people @$50 a day it seems crazy. When my base was $39 it gave me price tips as low as $24, now that my base is $50 my price tips are higher.