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Friday, September 30, 2022

Does Airbnb Smart Pricing Work and Do You Need It?

Have you considered including Airbnb Smart Pricing with your listing? Adjusting your Airbnb price is a good method that may assist you in maintaining a competitive rate and optimizing your listing for optimum income. Indeed, dynamic pricing, according to Hospitalitynet, may dramatically boost a listing’s revenue performance.

However, it seems as if not all hosts are delighted with the Airbnb Smart Pricing option. Let’s have a look at how Airbnb Smart Pricing works and compare it to other dynamic pricing tools that might assist you in setting the optimal price for your property.

What Is Airbnb’s Intelligent Pricing?

Airbnb Smart Pricing is an integrated technology that analyses pertinent data and variables affecting the pricing of a property listing. It automatically adjusts the price of a listing to reflect market demand, but only within the minimum and maximum price ranges specified by you. It considers criteria such as the location, size, and amenities of the rental, as well as the quality of your ad.

How Is It Operated?

The Smart Pricing feature on Airbnb is based on an algorithm that offers pricing recommendations based on property-specific variables. Following a thorough examination of the data, it will offer an “optimal” price based on its calculations.

What Information Is Used to Determine Prices?

1. Local demand in your neighborhood

If Airbnb notices that homes in your region are often rented, it will believe it is a more popular and in-demand location and will boost your pricing. If it’s low season or you reside in a low-traffic location, Airbnb will notice and adjust your pricing to make your rental more desirable.

2. Amenities and the standard of the listing

Your pricing suggestions may be influenced by the facilities and services offered by your location. The more services you provide, the higher your Airbnb charges will be determined.

However, do not despair if you have a limited property! Additionally, you may affect the algorithm favorably by generating an exhaustive listing of your property. When doing computations, it also considers the quality and detail of a listing.

3. The average number of times your item is seen

The number of visitors that click on and see your listings may also have an effect. The higher the click rate on your listing, the more accurate your computed price tips will be.

To assist increase the exposure of your listing, you should attempt to contact as many people as possible. Marketing your listings on social media channels such as Instagram and Pinterest might help increase views.

4. The total number of reviews and their average rating

If you want to have a good impact on your recommended prices, seek out as many 5-star reviews as possible. Airbnb Smart Pricing takes into consideration both the quantity and quality of guest reviews.

This may be accomplished by beginning with the goal of providing the finest possible visitor experience. After your visitors check out, you may encourage them to submit a review by first writing one for them.

5. Type of room

Your room’s configuration and amenities also have a factor. If your accommodation has an ensuite bathroom or a balcony with a garden view, the Smart Pricing tool will take this into account when calculating the price.

If your space lacks anything that makes it stand out, have no fear. You may add a touch of luxury to your accommodation by installing basic furniture such as air conditioning, a larger bed (if space permits), and smart television.

6. Availability on the calendar

The more bookings you place on your calendar for your listing, the higher your rate will be. This is because Airbnb would want hosts to accept as many guests as possible since hosts get a commission on booking costs. As a result, they incentivize regular hosting with increased price tips.

7. Looks for postings that are comparable to yours

Additionally, Airbnb will consider how often visitors perform searches for properties comparable to yours. This metric represents the popularity and demand for your sort of property, which assists in determining the recommended price.

Should You Utilize Airbnb’s Intelligent Pricing? [Advantages and disadvantages]

Utilizing Airbnb Smart Pricing seems to be advantageous. Therefore, why aren’t more hosts using it? According to several hosts, it did assist them in increasing their net income. Other hosts have complained that the restriction has decreased the income they might earn. Therefore, should you use Airbnb Smart Pricing for your listing? Let us examine its advantages and disadvantages in further detail.


  • It enables you to choose your minimum and maximum prices, allowing you to maintain control over your pricing.
  • It provides pricing recommendations based on real-time analytics.
  • The pricing is market-based and is intended to provide you with a competitive advantage.
  • You may configure your pricing such that the calculated price does not go below the minimum price you specify.
  • You may toggle the function on and off at any time.


  • The price produced may be less than the amount you would normally charge, implying a lower profit per reservation.
  • According to some hosts, the tool emphasizes bookings above host revenue due to Airbnb’s fee.
  • It makes no attempt to be precise in its computations. Though you have a one-bedroom apartment, it is probable that it will obtain a price suggestion that is fairly close to that of other one-bedroom flats nearby, even if your property is far better.
  • While Airbnb promises to consider seasonality, several hosts have noted that the technology does not seem to do so. 
  • Hosts got the same pricing change for their rental throughout their peak and off-peak seasons. It is unable to notice distant impending events until it is too late and many Airbnbs are already booked.

Which Pricing Strategy Is the Best for Your Vacation Rental Business?

Whether you want to use Airbnb Smart Pricing or not, you should spend some time determining the optimal pricing approach for your vacation rental company. Several of the more successful strategies include the following:

1. Maximum Nightly Rate Strategy

This strategy tries to optimize your earnings by charging a higher-than-average nightly charge on Airbnb for your house. The advantage of this strategy is that you may make more money than you would with Smart Pricing on Airbnb.

The disadvantage is that, as a result of the increased costs, it may be more difficult to fill your calendar too full. To make this price plan work, you must provide a luxury property or one that provides a unique experience.

2. Fill-rate Maximization Strategy

This technique seeks to increase your occupancy rate as much as possible. This may be accomplished by pricing your property cheaper than comparable adjacent rentals.

One advantage of this strategy is that you are likely to have a greater booking rate as a result of your enticing price. On the other side, when you are completely booked, it means that you will have more work and will not earn as much money as you might.

If you’re in the off-season or having difficulty securing bookings, the Maximum-Fill Strategy is appropriate. Simply check that the rate you charge is still profitable.

3. Renting Strategy for the Long Term

Long-term renting is similar to leasing in that you rent your home to the same visitor for an extended period of time, often at least 30 days. If you choose this route, some advantages include fewer management duties and a decreased need to aggressively advertise your home.

On the negative side, you would make less money than you would from short-term rentals. Additionally, you would need to sign a rental agreement for legal protection in the event that anything goes wrong.

Alternatives to Airbnb’s Smart Pricing Tool

Adjusting your price in response to seasonality, events, and surges in demand is a sound strategy for increasing revenue. Given the varied responses Airbnb Smart Price has gotten from hosts, there are a number of software solutions created expressly for pricing management:

1. BeyondPricing

BeyondPricing is a seasoned revenue management software provider, that has been in operation since 2013. BeyondPricing provides data-driven dynamic pricing management. Additionally, it provides hosts with insightful industry information and customized revenue management assistance.

2. PriceLabs

PriceLabs’ user-friendly software enables you to quickly control the price and availability of your listings. Additionally, PriceLabs provides seamless connections with over 50 point-of-sale systems and channel managers for quick, accessible access. IgMs is linked with Pricelabs, which enables hosts to benefit from easier vacation rental administration while being certain that their prices are optimal across all channels.

3. Wheelhouse

The wheelhouse is a revenue management and market intelligence application developed to assist businesses in managing their operations effectively. Additionally, it provides critical comp set data to assist you in determining how your rental compares to the market.


In general, using pricing tools is a fantastic idea since it may assist you in maximizing your earnings. Utilizing vacation rental software is another option to spark your business’s development and profitability. Vacation rental software, such as Lodgable, automates regular processes. With Lodgable in command, you can:

  • Managing several accounts and listings on the leading online travel agencies through a single interface.
  • Reservations may be synchronized across several platforms to avoid duplicate bookings.
  • Using direct booking management tools to handle direct reservations.
  • Secure payment processing through Stripe integration.
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