Why You Should Never Use Airbnb Smart Pricing – Part One
Airbnb Smart Pricing
I said it before and I’m going to say it again.
Smart Pricing is a scam. I’m a huge advocate against it and I am very clear in why a host should never use smart pricing when I’m educating new hosts.
Smart Pricing lets you set your prices to automatically go up or down based on changes in demand for listings like yours. It is based on the type and location of your listing, the season, demand, and other factors.
This all sounds great because it saves you the headaches of knowing how to adjust your pricing strategy, but it comes with a big problem.
The big problem is that smart pricing’s software will often underestimate the demand, thus pricing your property below the actual market value.
Here’s the bigger problem with Airbnb Smart Pricing.
Airbnb is doing a huge push to compete with hotels. In order to attract new customers, it is in their best interest to slash prices to compete with the hotel chains. While this strategy is great for Airbnb, the hosts are left to eat the costs.
When I first started hosting back in February of 2017, I was doing it the manual way. I logged into Airbnb every day to adjust my pricing and apparently, Airbnb awards hosts who regularly update their calendar by showing their units first.
This manual method was great, but it doesn’t scale. As soon as I opened up my second unit, I was spending hours a week doing this… Nothing is wrong with this if you’re happy spending the time.
If you’re wondering if there’s a better way, then you’re in luck. Yes, there is!
I will talk about it in my part two. Stay tuned for that!
Airbnb Smart Pricing Updated**
Do you see the confusion?
She thinks that by setting her minimum price really high, she’s able to avoid her listing being underpriced by Smart Pricing.
There are two issues. One; there’s a maximum ceiling that I’ve talked about in my response to her. Two; how do you know your “high minimum price” is low enough where you are still getting bookings?
I can set my minimum price to 500 dollars, but obviously, that is not going to get me booked because my competitors are charging less and my place is not nice enough where I can justify charging 500 dollars per night.
This is How you Can optimize your Airbnb Pricing Strategy
When I first started hosting back in February of 2017, I was doing it the manual way. I logged into Airbnb every day to adjust my pricing and apparently, Airbnb awards hosts who regularly update their calendar by showing their units first (one of the many SEO factors that will help you rank higher).
This manual method was great, but it doesn’t scale. As soon as I opened up my second unit, I was spending hours a week doing this… I started to research on third-party pricing tools.
I came across 3 different companies, Everbooked, Wheelhouse, and Beyond Pricing. I will talk about their differences in Part two of this series. But if you’re curious, you should definitely read up on Part two.
Also, I wrote a detailed analysis of the differences between Wheelhouse and Beyond Pricing. I did a 2-week experiment and I lost $968 using this one tool.
I hope you don’t lose money as I did!