How Airbnb Smart Pricing Can Undervalue Your Rental

I put a tiny house on wheels in an RV park, then listed it on Airbnb. Here was my biggest mistake.

I used Smart Pricing, Airbnb's "set it and forget it" pricing algorithm. I just told Airbnb some details about my tiny house, and it automatically set the nightly rate for me for the whole year.

I know, I know, novice move. Please don't bully me in the DM's 😅

I didn't know it at the time, but Smart Pricing will severely underprice you. Smart Pricing is GREAT for Airbnb's goals, but not so great for your wallet.

The "why" can be uncovered if you look at the incentives. Airbnb is incentivized to give guests the best value possible, because they want people to have an amazing experience on the platform. If a guest gets a killer deal, they'll be more likely to use Airbnb next time too.

The best way to know how to price your STR is to look at competitors. In Airbnb's perspective, your Airbnb listing is NOT competing with other Airbnb listings. Airbnb's competition is VRBO/hotels/etc. As long as Airbnb gets the booking and VRBO doesn't, then Airbnb will be happy. They don't care which Airbnb listing gets the booking, because Airbnb will get paid either way.

That's why you need pricing that aligns with your incentives, not Airbnb's. PriceLabs is the best software for this. You can monitor YOUR competitors so that you can make the most money possible.

Moral of the story: spend the $15/month for PriceLabs. It's worth it. Yes, it's worth it even if you have a tiny house that's only $50/night. And if you're too busy to figure out PriceLabs by yourself, go to pricingpro.co/contact and receive a free consultation.