Airbnb has been a leading platform in the travel industry for well over a decade. For hosts new to the short-term rental industry, Airbnb has revolutionised how people rent out properties, but managing pricing manually can be time-consuming and challenging. That’s where Airbnb Smart Pricing comes in.
In this blog, we’ll break down exactly how Airbnb Smart Pricing works, what factors influence it, and whether it’s the right strategy for your rental business.
What Is Airbnb Smart Pricing?
When you are setting up your vacation rental, you may find that deciding on pricing can be difficult. After all, to get the most out of your pricing, it should regularly fluctuate to account for seasonal changes, how you measure up to competitors, how much interest your area generates, and many other factors. Thankfully, you don’t need to do this alone, and this is where smart pricing comes into play.
Airbnb Smart Pricing is a built-in tool that analyses and evaluates data relevant to each property listing. Considering data from numerous sources, Airbnb automatically updates your listing’s price according to market demand, only ever staying within the minimum and maximum prices you have decided. The goal of Smart Pricing is clear: to increase your chances of getting booked.
How to activate smart Pricing on Airbnb?
Activating smart pricing on Airbnb is simple, and once it’s activated, you can customise it to fit your pricing strategy.
For Web
- Go to your Airbnb dashboard and click on the listing you want to update.
- Head over to the “Pricing” tab.
- Scroll down to find “Smart Pricing”.
- Toggle the switch to turn it on.
- Set your minimum and maximum price limits, these will help Smart Pricing know boundaries so you don’t go too low or too high.
- Click Save, and you’re done!
For a mobile app
- Open the Airbnb app and tap on the listing you want to adjust.
- Navigate to the “Pricing” section.
- Find “Smart Pricing” and toggle it on.
- Set your minimum and maximum price limits.
- Tap Save to lock in your changes.
How Does Airbnb Smart Pricing Work?
Airbnb uses an algorithm that pulls in real-time data from:
- Booking trends in your area
- Local events (concerts, holidays, etc.)
- Listing popularity and search volume
- Competitor pricing
- Property characteristics (e.g., location, amenities, reviews)
Once you enable Smart Pricing, you’ll set a minimum and maximum price range, and Airbnb will ensure your listing stays within that range. For example, if your listing’s minimum is £70 and the maximum is £150, Airbnb will dynamically adjust your price within that bracket based on demand signals.
Pros of Using Airbnb Smart Pricing
Increased occupancy
Revenue optimization
Saves time
Customizable to your needs
Cons of Airbnb Smart Pricing
Lower-than-expected prices
Lack of flexibility for niche markets
Limited control over last-minute pricing
Lack of personalisation
Tips for Optimising Smart Pricing
If you decide to use Airbnb Smart Pricing, here’s how to make the most of it:
Set a Realistic Minimum Price
Don’t set your minimum price too low. Factor in cleaning fees, management costs, and your profit margin.
Monitor the Adjustments Regularly
While it’s automated, you should still keep an eye on changes, especially during peak seasons.
Use Price Tips for Reference
Even if you don’t use Smart Pricing full-time, Airbnb’s price tips can offer useful insight.
Test It Out
Try it for a few weeks and compare your booking performance. Every market behaves differently.
Should You Use Airbnb Smart Pricing?
Whether or not Airbnb Smart Pricing is right for you depends on your goals. If you manage multiple listings or want to stay competitive without constant monitoring, it’s a solid tool. However, for high-end or niche properties, manual pricing or using third-party pricing tools might be better.
Airbnb Smart Pricing provides a solid, automated approach to adjusting your rates, helping hosts stay competitive and increase revenue. It’s a great tool for making your pricing more dynamic, responding to shifts in demand, and keeping your property booked.
However, for hosts who want to maximise potential, it’s important to keep an eye on things like local events, special weekends, or holiday periods that Smart Pricing might overlook. By manually tweaking prices when needed, you can strike a balance between automation and hands-on management.
Tired of managing your vacation rental business and want to automate? Then try AI Your BnB for automating your manual tasks for your vacation rentals. Join our waiting list to get early access to AI Your BnB Software.
Learn about The Complete Guide to Becoming an Airbnb Superhost in 2025
