There are a handful of new startups that have developed dynamic pricing models to help Airbnb hosts calculate the optimal nightly rental rate for their available rooms.
Now, Airbnb is testing a tool that does the same for its own users.
In an email sent to Airbnb hosts, the San Francisco-based company announced that it is rolling out new features to help homeowners maximize their earnings.
They include a “price tips” tool that show “how likely guests are to book your listing at various prices.” There’s also a new way to adjust pricing “for one day or a window of time to respond to changing travel trends.”
An Airbnb spokesperson didn’t have much to say about the new tool.
“Airbnb continuously runs experiments to learn what creates the best experiences for guests and hosts,” the company noted. “We don’t have anything specific to share at this time.”
There are several startups that provide rental hosts with pricing advice and apply similar pricing algorithms used by airlines and hotels to recommend rates. These companies include Everbooked, Beyond Pricing, Smart Host, and PriceMethod, which just launched this week.
Everbooked Business Development Manager Doug Ross said that his company is happy that Airbnb is rolling out pricing tools for hosts.
“Everbooked has been advocating for and delivering smarter pricing for Airbnb hosts for some time so we welcome the updated price tips feature from Airbnb,” he said.
Ross noted that Everbooked’s pricing service is automated, with prices updated four times a day, while Airbnb provides tips that hosts apply themselves. He also said that Everbooked analyzes more data.
“We give hosts the most comprehensive overview of the market to make sure they compete well against both hotels and other hosts,” Ross said.
Some Airbnb hosts on Reddit noted that Airbnb recommended they set substantially lower rates.
“It’s telling me that I should lower my pricing by on average 60%, but we’ve been consistently maintaining 80% occupancy,” one host noted. “I don’t trust this new AirBnb Price tip stuff at all.”
Another Reddit user said that Airbnb’s new tool might have “nothing to do with optimizing our income and everything to do with optimizing theirs.”
“Seems to me that it’s in Airbnb’s best interests if we are booked 100% at a lower price than if we all know our break-even point and let it sit empty rather than lose money,” the host wrote. “So they have very little to lose if we rent for 60% less but a whole lot to lose if we sit empty?”
