Smart Pricing or How not to make money (Pick one)

[José70]

Recently, i added several listings to my profile and decided to use smart pricing. After a season with a low percentage of reservations, and somewhat tired of Airbnb pressure regarding my prices, i resolved to get along and use the SP. My minimum rate was set at 25€ and maximum rate at 90€ ( Airbnb suggestion). So, we were ready to battle the summer armed with this bullet proof tool that Airbnb provides. But, very early on, it became clear that SP only reason to exist is to promote ridiculous low rates at hig season, all at the hosts expense. In August, SP was selling my listings at a whoping 27€ a night, when the average here in Lisbon was situated between 35-60€ ( this in terms of private rooms). Sadly, the reservation percentage did not increase, in fact, it remained quite the same troughout the months of June,July and early August when comparing with the 3 previous months( March,April and May). There was, in fact, a small increase in terms of one night guests. It seems that the low rates attracted the stop overs from all around, but not anyone else. We also saw a decrease in the number of nights booked for reservation. Prior to SP, most of the reservations were between 2-4 days. After SP, it droped down to 1-2 days. It was also curious that Airbnb sells SP has a tool that is based on demand, festive dates and so on. If that is the case, why is my listing rated at 27€ in the middle of October and at 26€ at the 31st of December, new years eve? Shouldn´t the New Year be at the higher rate possible? Why is it even lower? And why in August, the busiest month in the year and the most expensive one, are my rates so close to the minimum when they should be at least in accordance with the  other city listings rates?

In the end, i can only assume that SP is nothing more than a "fools gold", it shines,but has no value. For me, it had 0% effect in the number of my reservations. By not keeping a steady rate for the whole moths, i ended up loosing money compared to other similar listings near me. It also attracted a very specific type of guest who, strangely enough, despite paying considerably less, was much more  picky and demanding than previous guests who payed our standard manual rate, which was considerably higher.

So, to come to a sad conclusion, SP really has no positive efect on your listings rather than selling ity at a very low price, thus satisfying and pampering guests and demanding more and more from hosts, not recognizing that without one, the other can´t exist and vice-versa. I apologyze for all the mistakes, English is not my native language.

Best regards to you all,

José

[Emiel1]

Hello @José70 ,

I use Smart pricing for almost all my listings. But i suggest to choose a rather narrow bandwith. I limit to  plus / minus 10% to 15% of the regular "fixed" price I would have choosen. I never follow Airbnb suggestions. Please note you can allways change selected periods to custom prices, without turning off Smart Pricing completely.

So keep and eye on your listing and if SP is doing something which you don´t like, correct it.

There is also a marketing thing: your listing is  presented to guests with initially the lowest nightly price shown, even if it is only 1 night a year.

As far as i know this does not work if you set 1 day in a year manually to some "attractive" rate as a bate.

Best regards, Emiel

[Lisa723]

@José70 you are not the first to learn this lesson the hard way... keep in mind that you don't usually see what your guest actually pays. By reducing your rate, Airbnb can increase its own guest service fee, thus offering the space at the same price to the guest but increasing its own percentage. I've seen no evidence that smart pricing is good for anyone except Airbnb itself.

[Carmen627]

Smart pricing is a joke. No thank you. If you set the low end number you better believe that’s what Airbnb is gonna offer out. Manage and change the numbers yourself