Smart Pricing increasing my price significantly higher than my minimum

For the first time since I started hosting last year, Smart Pricing put my listing price at significantly above my minimum rate, so it got me thinking about what does Airbnb really base their Smart Pricing on and should I keep their pricing when it’s significantly above my minimum? I know the general consensus is that Smart Pricing isn’t that great, but I thought that was because it typically underestimates the value.

I have two rooms in my house on Airbnb, both of which are fairly similar (shared bath, same size bed, one guest allowed, same number of very positive reviews, same amenities). The description and pictures are exactly the same for both listings, other than the pictures of the bedroom itself. One room has been more popular the last month (rated 4.9* overall), but prior to that the other room (rated 5* overall) was more popular. The 5* room has a lower percentage of accepted reservations (71% vs 90% for the 4.9*) and is listed further down in the search results compared to the other room.

I have smart pricing for both rooms set to minimum $48/night and noticed in July my 4.9* room has prices as high as $68/night while for the other listing the max is $56 for the same nights. I worry about my price being too high and not getting booked, but it looks like all the other rooms nearby are priced even higher…must be because it’s peak summer time in a tourist destination. My prices were never that high last summer and it seems like I don’t typically get bookings once I raise my price higher than $52.

So my question is, does anyone know if Smart Pricing uses any valid data to come up with their prices, and why would two nearly identical rooms in the same house have such a difference in price? Could it be that Airbnb is lowering the smart price on the 5* room because I have a lower percent of accepted reservations? Should I keep the high price suggestions from Airbnb or drop my price closer to what I’ve booked for in the past (or wait until closer to the date to drop my price if it doesn’t book at the higher rate)?

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No one will be able to tell you the exact truth about these things, only time will tell if you will get booked at high prices. With two very similar rooms you do have one very distinct advantage: You can experiment (one room with higher maximum price and another room with lower maximum price OR one room WITH and another WITHOUT smart pricing) and see if the experiment shows different results. When doing this, please do give us some feedback about your experiment.

About lowering your prices: How far in advance do you usually get booked? This will indicate when you have to worry about not getting booked at all.
I play around with my prices the whole time: 7 hours ago I returned the next 3 nights starting tomorrow to my ‘normal’ maximum price (last minute bothers me, so it shouldn’t be an advantage to guests), after having had them at a lower price in the hope of getting them filled. One hour ago they got booked. So go figure :stuck_out_tongue:. Sometimes it’s just a guest searching at the right time.


I can’t answer your specific question and I doubt anyone here can. I was curious and just went an read a blog post about it and the guy running the blog has only been hosting about 2 years and is clearly making stuff up and taking stuff from other sources including reddit and this forum and reposting it on his blog. So we are as knowledgable as anyone and we don’t know. And even if someone figured it out a year ago it could be changed by now.

Here’s what I do know: I have experimented with price tips and or smart pricing on and off for about 2 years now. In January I was a bit tired and burned out from my busy holiday season of Airbnb and dog boarding. A regular guest of mine who is also a host in a town about 3 hours away told me I should raise my prices. So in mid January I made three changes: raised my base price from $39 to $50; changed my cancel policy to moderate from flexible; turned on smart pricing.

January 2019 was slower than January 2018 but only by about 10%. Feb was back up to expectations and March was my best month ever. Smart pricing regularly has my price at above $50. It’s usually only a $1-4 more, but it’s there. I just got a 2 night booking for June that was $59/night. No way I would have had my price that high for those nights.

I’m assuming that smart pricing employs the principles of dynamic pricing. Maybe not as quickly as an airline but more quickly than I can. It’s important to know your market. Like I know I can’t get $59 a night every night, but when there is an uptick in demand, smart pricing detects that. Sure maybe I know about the music festival here Memorial Day weekend and have raised my price (and those dates are still available). But I didn’t know the Sgt. Major Academy had a graduation event (that’s what got booked in June).

Here is a caveat: I get a lot of last minute bookings and I prefer that. At the beginning of any given month I’ll have one or two bookings but by the end of that month I will have had one or two free nights. By raising your prices it may lower your further out booking rate. The cheaper places will go first but when they are gone, they are gone and then there’s my listing, sitting there available three hours before the guest arrives. And I’m not getting dinged on value because 1) my place is awesome 2)even the dumpy motel is the same price.

So my experience is that I’ve made a little bit more money and had no issues with smart pricing. Some people here believe it has to “learn” your listing and your market and if that’s true that would explain why I was slower in Jan but not in Feb/Mar.


Thank you for the great detail. Strangely, my prices have dropped back to the minimum for July today. I raised my minimum by $5 last night after researching my competitors’ prices, so I don’t know if that has anything to do with it. If it’s really dynamic based on demand, I can’t imagine that demand has suddenly dropped off enough for July that all my prices would lower to the minimum. Oh well, yet another Airbnb unsolved mystery!

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Airbnb will drop it for you if you stay with Smart Pricing. They want it booked as well.