Should You Use Airbnb Smart Pricing?

Should You Use Airbnb Smart Pricing?

Have you considered putting your property on Airbnb Smart Pricing? Adjusting your Airbnb price is a good technique for keeping your rate competitive and optimizing your listing for optimum income. Dynamic pricing, according to Hospitalitynet, may considerably boost a listing’s revenue performance.

However, the Airbnb Smart Pricing option does not seem to satisfy all hosts. Let’s take a look at how Airbnb Smart Pricing works, as well as several other dynamic pricing programs that may assist you in determining the ideal price for your property.

What Is Airbnb Smart Pricing, and How Does It Work?

Airbnb Smart Pricing is a built-in feature that analyses pertinent data and criteria to determine the best price for a property listing. It looks at the rental’s location, size, amenities, and the quality of your ad, among other things. It automatically adjusts the price of a listing to fit market demand, but only within the minimum and maximum price range that you choose.

What Is the Process?

The Airbnb Smart Pricing feature is based on an algorithm that offers pricing suggestions based on property data. After cross-examining the data, it will propose an “optimal” price based on its calculations.

What Is Information Used to Calculate Prices?

1. Your area’s local demand

If your neighborhood’s homes are often rented, Airbnb will believe it’s a more popular and in-demand location and up your pricing. If it’s the off-season or you reside in a low-traffic region, Airbnb will notice and cut your prices to make your rental more desirable.

2. The number of amenities and the quality of the listings

Your pricing suggestions may be influenced by the facilities and features available in your space. The more you have to give, the higher your Airbnb prices.

But don’t worry if you just have a little space! You may also have a beneficial impact on the algorithm by compiling a thorough listing of your property. When doing computations, it also looks at the quality and detail of a listing.

3. The average number of persons that have looked at your ad.

The number of visitors that click on and see your listings may also influence. The better your computed pricing tips are, the higher your listing’s click rate is.

To increase the exposure of your listing, you should strive to reach out to as many people as possible. Using social media networks like Instagram and Pinterest to promote your listings might help you get more views.

4. The number of reviews you’ve received and their average rating

Obtain as many 5-star reviews as possible if you wish to have a favorable impact on your proposed pricing. The amount and quality of your guest reviews are used in Airbnb Smart Pricing.

This may be accomplished by aiming for the finest possible visitor experience from the outset. By posting a guest review for the first, you may encourage them to submit a review after they’ve checked out.

5. The sort of room

The sort of space you have and what it offers also play a part. The Smart Pricing tool will consider if your accommodation has an ensuite bathroom or a balcony with a view of the garden.

Don’t worry if your space lacks something to make it stand out. Simple furniture such as air conditioning, a larger bed (if space permits), and a smart television may give your room a more opulent feel.

6. Availability on the calendar

The more times you make your listing open for booking on your calendar, the better. Airbnb prefers owners to accept as many guests as possible since they get a commission on the booking costs. As a result, they provide bigger price tips to those who host more often.

7. Looks for postings that are comparable to yours.

The frequency with which visitors seek properties comparable to yours will also be considered by Airbnb. This shows how popular and in-demand your sort of property is, which helps decide the price it will suggest.

Is it a Good Idea to Use Airbnb Smart Pricing? [Benefits and Drawbacks]

Using Airbnb Smart Pricing seems to be a good idea. It has reportedly assisted several hosts in increasing their net income. So, why isn’t it being used by more hosts? Other hosts have expressed dissatisfaction because it has curtailed the amount of money they might have earned. So, should you use Airbnb Smart Pricing for your listing? Let’s take a deeper look at its advantages and disadvantages.


  • It enables you to set your minimum and maximum prices, maintaining pricing control.
  • It produces pricing recommendations based on real-time data.
  • The market determines the pricing and is intended to provide you with a competitive advantage.
  • You may configure your pricing so that the calculated price does not exceed the minimum price you specify.
  • You have complete control over whether or not to use the function.


  • The price produced may be lower than you would normally charge, resulting in a lower profit per reservation.
  • Because of Airbnb’s fee, several hosts have argued that the service favors reservations above host revenue.
  • It doesn’t use precision in its computations. Even if your apartment is significantly better, a one-bedroom apartment will likely obtain a price suggestion that is fairly comparable to other one-bedroom flats nearby.
  • even though Airbnb purports to include seasonality, several hosts have claimed that the tool does not seem to consider the time of year. During both their high and low seasons, hosts have gotten the same rate update for their rental.
  • It doesn’t identify far-off events until it’s too late when many Airbnbs have already been reserved.


What is the most cost-effective pricing strategy for your vacation rental company?

Whether you want to use Airbnb Smart Pricing or not, you’ll need to devote some time to determining the ideal pricing approach for your vacation rental company. The following are some of the most successful strategies:

1. Maximum Nightly Rate Strategy

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

The disadvantage is that it may be more difficult to fill your calendar too full because of the increased expenses. To make this price plan work, you’ll need to provide a high-end home or one that delivers a one-of-a-kind experience.

2. Fill-rate Maximization Strategy

The goal of this method is to increase your occupancy rate. You may achieve this by setting your rental fee lower than comparable rentals in the area.

One advantage of doing so is that your enticing price will likely result in a greater booking rate. On the other side, being fully booked means you’ll have more work and won’t be generating as much money as you might.

The Maximum-Fill Strategy is perfect if you’re in your off-season or having trouble securing bookings. Simply make sure that the rate you charge is still profitable.

3. Rental Strategy for the Long-Term

Long-term renting is similar to leasing in that you rent out your home to the same visitor for a longer period, generally a minimum of 30 days. If you choose this option, you will have fewer management responsibilities and will not be required to actively promote your home.

On the flip side, you’d make less money than you would from short-term rentals. You’ll also need to sign a rental agreement to protect yourself legally if anything goes wrong.

4. Airbnb Management Strategy That Is Balanced

The Balanced Airbnb Management Strategy combines the pricing above approaches to maximize income. It’s built on a flexible approach, which means you may employ the Long-term Renting plan to keep your home occupied throughout the off-season.

Then, to maximize your revenue throughout your peak season and any special events, you may use the Maximum Rate Per Night or Maximum Fill-Rate techniques.

The advantages of this strategy include a continuously high occupancy rate and higher revenue than you would receive if you simply used one strategy. The disadvantages include a greater incidence of visitor turnover, more effort, and more time spent on hosting chores.

Finally, the approach you use should be appropriate for your specific circumstances. There is no “one size fits all” rule when it comes to efficient Airbnb pricing tactics. If you notice that one rate is causing an increase in reservations, you may update and alter your price and try a different one to see if it has the same effect. Simply conduct some study before charging a lesser or higher price; otherwise, you may not be able to make a profit.

Alternatives to Airbnb’s Smart Pricing Tool

It’s a good idea to adjust your price depending on seasonality, events, and demand surges to maximize income. Because Airbnb Smart Price has garnered mixed feedback from hosts, there are several software options created expressly for pricing management:

1. BeyondPricing

BeyondPricing is a well-known revenue management tool that has been in use since 2013. Beyond Pricing provides data-driven dynamic pricing management. It also provides hosts with relevant industry data and customized revenue management advice.

2. PriceLabs

With PriceLabs’ user-friendly software, you can effortlessly control the price and availability of your listings.

3. Wheelhouse

The wheelhouse is revenue management and market-insight program that helps businesses run more efficiently. It also provides crucial comp set data to assist you in understanding how your rental compares to the market.


DPGO is a dynamic pricing program that may help you boost income and occupancy. AI-driven dynamic pricing, real-time industry insights, and growth performance are just a few of the things it provides.


In general, using pricing tools is a smart idea since it may help you increase your income. Using vacation rental software is another approach to boost your business’s development and profitability. With Lodgable at the helm, you’ll be able to:

  • Using a single interface, manage numerous accounts and listings on the leading OTAs.
  • Eliminating duplicate bookings by synchronizing reservations across numerous platforms.
  • Using direct booking management tools to handle direct reservations.
  • Using Stripe to handle payments securely.

Leave a Comment

Grow Your Vacation Rental Business!

No matter the size of your vacation rental business, you can benefit from Lodgable's state-of-art software. Click below to get started!

Related Articles

Let’s Get Started

Lodgable now offers the fastest response times in the industry during business hours. Learn more about how our state-of-the-art software will help grow your business today!

Grow Your Vacation Rental Business! 

Chat With Us

Chat Now




The Product