Guide
Is Airbnb Smart Pricing pricing you too low? Set a floor first
Smart Pricing only works in your favour when you give it a minimum and maximum price. Work out the lowest rate that still covers your costs, set that as the minimum, and price holidays and local events by hand.
Examples on this page use made-up homes and numbers to show the method. They are not client results.
What Smart Pricing does
It changes your nightly rate automatically, based on demand for your area and dates. You stay in charge of two limits: the lowest price it may use and the highest. Everything it does happens between those two numbers.
Many hosts find that, left alone, it leans toward filling nights rather than holding the rate. That is fine for an empty Tuesday in February. It is not fine if it sells your best summer Saturday at a weekday price.
Step 1: Find your break-even rate
Add up your fixed monthly costs for the listing: mortgage or rent, utilities, internet, insurance. Divide by the nights you normally book in a month, then allow for the platform’s fee.
Our calculator does this sum for you. With $2,200 in monthly costs and 18 booked nights, break-even is about $145 a night.
Step 2: Check what similar homes charge
Search your area for a normal weekend and a normal weeknight, with your guest count. Note the prices of the five homes most like yours. That is your comp set. Your minimum should sit above your break-even rate and not far below the cheapest comparable home.
Step 3: Set the minimum and maximum
- Minimum: the lowest rate you would be glad to accept, not the lowest you could survive.
- Maximum: high enough that peak dates are not capped. This is a safety limit more than a target.
For example, a home with a break-even rate of $145 might use a $170 minimum and a $380 maximum. The minimum sits above break-even on purpose: it can be better to leave a slow weeknight empty than to teach guests to expect that price.
Step 4: Price the big dates by hand
Automatic pricing does not know about the tournament at your local arena or graduation weekend at the university. Set those dates yourself, well ahead, at a price you choose.
Two things to watch if you also use Vrbo
Vrbo has its own automatic pricing, with its own surprises:
- Edited nights can drop out. Automatic pricing may stop adjusting a night once you have changed its price by hand. Read the notice shown when you edit, or you can end up with a week that is no longer managed.
- Promotions can go under your floor. Discounts are applied after the minimum. A 10% early-booking promotion on a $200 minimum shows guests $180. Check your promotions as well as your limits.
How to tell if it is working
Look at your average daily rate and occupancy together, month by month. If occupancy is very high and the average rate has slipped, the minimum is too low. If nights sit empty at the minimum for weeks, the floor is above what your market will pay in that season.
Want this done for you?
With Co-Hosting, we set and review your rates, minimum stays and gap nights for you, with nothing to pay upfront. Or start with a free listing check.
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