How you price your short term rental is one of the main factors for the revenue it will be able to generate. As the leading vacation rental listing platform, Airbnb provides hosts with a number of tools and options to build a pricing strategy, both statically and dynamically. Available Airbnb pricing tools include default pricing, custom pricing, Smart Pricing, and integrations with third-party pricing apps.
This article reviews and analyzes each of these options to show how it works, highlight what type of hosts it is best for, and what users think about it. Finally, we conclude with the best Airbnb pricing tools alternatives for short term rental pricing. Let's get started.
Does Airbnb Have Pricing Tools?
To start, Airbnb provides hosts with a few options to set up their pricing strategy, based on their preferences, knowledge, skills, and access to other tools. These include the following.
1. Default Airbnb Pricing
When listing a property on Airbnb, hosts need to enter a base price. This is the standard price for which a rental will be offered to guests as long as no custom rules are applied. You can always change the base price by going to Calendar, choosing the listing (in case you have multiple listings), clicking on Pricing, and then clicking on Base price.
In addition to the base nightly price, hosts can add fees in line with their offerings and strategies. Typical additional fees include:
- Cleaning fee: A flat fee charged per booking
- Pet fee: A flat fee charged per pet (and per night)
- Extra guest fee: A flat fee charged per additional guest beyond the standard limit per night
You can adjust these fees by visiting Calendar, clicking on the listing, choosing Pricing, clicking Additional charges, and selecting Fees.
Airbnb's default pricing tool is the most basic way to price your Airbnb and depends entirely on your knowledge of the local market and the competition. While this pricing tool is easy to use, you might miss out on the opportunity to get bookings during low seasons and earn more during high seasons.
Airbnb default pricing is best for:
- Homeowners who host only occasionally
- Investors with properties in static markets (without much seasonality)
2. Custom Airbnb Pricing
Hosts can also use the features available on the platform to create a more dynamic Airbnb pricing strategy. There are two ways in which short term rental property owners can customize pricing relying on their own knowledge and effort, without using automation.
First of all, hosts can change the daily rate for any particular date for which their listing is available for rent. For example, if you're aware of an upcoming popular event that brings thousands of visitors to your city, you can push the nightly price up to take advantage of this change in demand. Similarly, if you have reasons to believe that certain dates will suffer from low demand, you can decrease the nightly price to try to still get some bookings. This can be done by visiting Calendar, selecting the listing, choosing one or more nights, and entering the custom price.
Second, you can manually customize your pricing strategy on Airbnb by setting up rules. Following are the customizable rates you can introduce to your listing:
- Weekend pricing: Higher rates for Friday and Saturday nights
- Weekly and monthly pricing: Special rates for 7+ or 30+ night stays
- Length-of-stay discounts: Discounts for longer stays
- Early-bird discounts: Discounts when booking well in advance
- Last-minute discounts: Discounts on bookings made close to the check-in date
To apply these pricing rule sets, hosts need to switch to using the professional hosting tools available on the platform. This can be easily done from Account Settings and does not require any qualifications or additional costs.
Airbnb custom pricing is best for:
- Hosts with knowledge of seasonal trends in the local market
- DIY Airbnb revenue managers
- Investors on a limited budget (who don't want to pay for third-party tools)
3. Airbnb Smart Pricing
A few years ago, Airbnb introduced its own dynamic pricing tool to allow hosts to benefit from seasonality in demand without the need to constantly collect and analyze competitor data. Airbnb Smart Pricing helps owners automate dynamic pricing for their properties listed on the platform.
This tool automatically adjusts daily rates based on travel trends and booking demand in their area. The main factors that Smart Pricing takes into consideration include the property specs, market dynamics, and potential guests characteristics.
Hosts can turn Smart Pricing on and off at all times. This can be done by going to Calendar, choosing the listing, clicking on Pricing, selecting Base price, and clicking on Smart Pricing.
It's important to note that most custom prices, rules, and discounts override the Smart Pricing rates. Hosts should carefully review all Airbnb pricing tools that they use simultaneously to ensure that rates make sense.
Airbnb Smart Pricing is best for:
- First-time investors with limited to no knowledge of the local market
- Hosts who want to optimize Airbnb occupancy rate and boost revenue
- Owners who are looking for more passive income
- Investors with no additional budget for third-party tools
4. Integration with Third-Party Pricing Tools
The final option for applying a pricing strategy to Airbnb rentals is via integrations with third-party dynamic pricing tools.
Wheelhouse, PriceLabs, Beyond, AirDNA Smart Rates, and Mashvisor Airbnb Dynamic Pricing Tool are just some examples of short term rental pricing apps that work with Airbnb listings. They use Airbnb data and proprietary algorithms to recommend the optimal nightly rates that maximize revenue based on market dynamics. Moreover, they have the capacity to automatically push suggested prices to the Airbnb platform to eliminate the need for host intervention.
Using third-party Airbnb pricing tools is best for:
- Short term rental investors looking to maximize revenue and profit
- Passive income seekers
- Vacation rental owners with budget for third-party tools
- Owners of large short term rental portfolios
- Professional Airbnb property managers
How Much Do Airbnb Pricing Tools Cost?
Using any of the Airbnb pricing tools available on the platform is free of charge. Access to default and custom pricing as well as Smart Pricing is covered by the Airbnb host fees that the platform charges. In the majority of cases, the Airbnb service fee for hosts is equivalent to 3% of the booking revenue subtotal, which equals the nightly fee plus additional fees excluding Airbnb fees and taxes.
The default pricing is something that all hosts need to set up when listing their property on Airbnb. In order to access the more customizable pricing options, they need to switch to the Airbnb professional hosting features. There are no eligibility requirements and no additional costs to do this. Similarly, hosts can control whether to have Smart Pricing on or off, but there are no requirements and fees for using it.
Meanwhile, if short term rental property owners decide to go for third-party pricing tools for Airbnb, they will need to pay a monthly or annual subscription fee for this tool. The cost can vary from one tool to another and is often calculated as a subscription fee, a percentage of booking revenue, or a flat fee.
How to Use Airbnb Pricing Tools
The pricing tools available on the Airbnb platform are very easy to use.
The base price for a listing can be set up from Calendar and can be changed as frequently as wanted and needed. This is the daily rate that the website will use for every night for which the property is available for rent as long as no additional rules are set.
Custom pricing rules can also be added from Calendar. The technical implementation is straightforward, but setting up effective pricing rules requires a good understanding of supply and demand in your local market. Hosts need to know which seasons are more active, whether weekdays or weekends get more bookings, and what the most popular holidays are.
When setting up rule-sets and discounts, owners need to know the order in which they will applied to the nightly price:
- Nightly and weekend pricing
- Length-of-stay discounts including weekly and monthly pricing
- Early-bird and last-minute discounts
As an example, let's consider a listing that has a nightly price of $200/night and a nightly rate increase of 10% due to high demand. Moreover, there is a weekly discount of 15% and an early-bird discount of 20%. Let's calculate the nightly rate for a week-long reservation made a few months in advance.
Price with nightly rate increase = 200 + (10% x 200) = $220
Price with weekly discount = 220 - (15% x 220) = $187
Price with early-bird discount = 187 - (20% x 187) = $149.60
So, the final daily rate is $149.60/night.
The Airbnb Smart Pricing tool can be switched on and off, depending on your preferences. If you decide to use this Airbnb pricing tool, you'll need to enter a minimum rate and a maximum rate to control the price range within which the algorithm can suggest daily rates.
When turned on, Smart Pricing looks at the following factors to set up dynamic pricing:
- Listing information: Property type, property size, location, amenities, guest reviews, and more
- Search activity: How many guests are searching for similar properties in your area on specific dates
- Booking activity: How many bookings there are of comparable properties in the area for specific dates
Vacation rental hosts can override Smart Pricing rates even when the tool is switched on. Adding custom prices for specific dates overrides the prices suggested by Smart Pricing. Moreover, length-of-trip discounts including weekly and monthly rates override Smart Pricing prices, while Smart Pricing rates override weekend pricing.
Finally, each third-party Airbnb pricing tool works differently. Nevertheless, the main principles are similar. Most tools offer direct integration with Airbnb listings so that hosts can choose whether to have recommended prices automatically pushed to their listings or review them manually beforehand. In terms of the pricing algorithm, these tools get data from the Airbnb website and analyze market trends and competitor behavior and performance to suggest prices that maximize rental income.
Built-In Airbnb Pricing Tools Reviews
There are no customer reviews of the Airbnb default and custom pricing features as the results depend entirely on the host's knowledge of the industry and the market, their level of analysis, and their devotion to dynamic pricing.
However, Airbnb Smart Pricing reviews can be found on on a few forums, including:
In these reviews, some Airbnb hosts note that they enjoy the capabilities of Smart Pricing as it helped them increase average daily rates (ADR) (albeit minimally in most cases) and achieve good occupancy.
However, most hosts highlight that Airbnb Smart Pricing focuses on maximizing occupancy rates rather than revenue. As a result, it suggests rates that are significantly lower than what makes sense in the market, and the majority of hosts have not seen an improvement in income after switching to using this Airbnb dynamic pricing tool. These hosts recommend imposing strict minimum rates if you want to use Smart Pricing.
Airbnb Pricing Tools Alternatives
All in all, the pricing tools available on the Airbnb platform are rather basic and may not help you achieve your maximum potential revenue for your property. That's why many short term rental property owners resort to using third-party tools that help them set up a dynamic pricing strategy that concentrates on revenue optimization and requires no human intervention.
The top competitors of the Airbnb pricing tools include the following.
Wheelhouse vs Airbnb Pricing Tools
Wheelhouse is the top alternative to Smart Pricing for dynamic Airbnb pricing. What distinguishes Wheelhouse from other tools is the ability to choose between a data-driven strategy, a rules-based strategy, and a hybrid strategy that combines data and rules for optimal results. As a result, customers report an average increase in revenue of 20.6%.
Our Wheelhouse review shows that the app can work equally well for beginner investors, hosts with multiple listings, professional property managers with hundreds of rentals, and Airbnb management companies with thousands of properties. The tool not only integrates seamlessly with Airbnb but can also be used for listings on Vrbo and Booking.com and integrates with other Airbnb management software platforms.
To accommodate customer needs, Wheelhouse has a flexible pricing model (as of posting this article). Users can choose between a commission model for 1% of booking revenue (with a monthly minimum of $2.99) and a flat fee of $19.99/listing for 1-9 listings and per listing rates going down for larger portfolios.
PriceLabs vs Airbnb Pricing Tools
PriceLabs is another popular alternative to the built-in Airbnb pricing tools. The PriceLabs pricing strategy relies on a proprietary algorithm referred to as Hyper Local Pulse (HLP). This means that the tool collects data from Airbnb and other listing platforms to detect hyper local trends before integrating a particular property's historical performance and upcoming booking data to provide customized pricing recommendations.
Our PriceLabs review found that the platform can be used for different types of properties including vacation rentals, short term rentals, mid term rentals, serviced apartments, campgrounds, RVs, and holiday parks. Both Airbnb hosts and managers can benefit from the tool.
The cost of the dynamic pricing tool available on PriceLabs is 1% of booking revenue or a flat fee starting at $19.99/month (as of posting this article).
Beyond vs Airbnb Pricing Tools
Beyond is another option that helps hosts and property managers put dynamic pricing on autopilot. The main advantage of the tool is the ease of use, which makes it a good option for beginner investors and first-time hosts.
Beyond uses similar factors as other Airbnb pricing tools to recommend daily rates including but not limited to seasonality, local demand, search demand, and days of the week. Hosts can set up a minimum and a maximum rate to control the range of possible prices that make sense for their property. Because of the highlighted user-friendliness, Beyond algorithms and customization options appear somewhat limited compared to alternative solutions.
Access to Beyond dynamic pricing costs 1% of booking revenue (as of posting this article).
Bottom Line
Airbnb pricing tools are easy and free to use for hosts listing on the platform. However, they have limited features that result in suboptimal results compared to what other dynamic pricing tools are able to deliver. Because of this, many savvy hosts and property managers opt for third-party Airbnb pricing tools like Wheelhouse, Pricelabs, and Beyond to maximize revenue and profit.
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