Airbnb Pricing Tools: What Are Your Options?
Airbnb pricing tools can help you automate the process and optimize your nightly rates based on numerous data points to strike that perfect balance between occupancy and revenue.
As an Airbnb host, setting the right price for your short-term rental is key to attracting guests and maximizing your revenue. Setting your rate too low will reduce profits; setting it too high will cost you bookings.
Since market conditions fluctuate, figuring out a competitive price for your Airbnb listing can be challenging and time-consuming. It requires ongoing research into the local market and your competitors, as well as tracking trends in travelers’ behavior.
Fortunately, you don’t have to devote hours to collecting a ton of data, analyzing the market, and manually managing your rental property pricing. You can use an Airbnb pricing tool to automate the process and optimize your nightly rates based on numerous data points to strike that perfect balance between occupancy and revenue.
You’ll save even more time and improve operational efficiency by streamlining your operations with short-term rental software like Hospitable. Our STR super app can automate 90% of your daily tasks, putting your business on autopilot.
What Is an Airbnb Pricing Tool?
An Airbnb pricing tool is software designed to help hosts set up automatic dynamic pricing for their vacation rental properties. Dynamic pricing applies variable prices for a product or service based on evolving market trends, primarily supply and demand. It’s used in many industries and is effective for short-term rentals.
Airbnb dynamic pricing tools rely on artificial intelligence, big data, and machine learning to analyze a wealth of data and recommend the most appropriate nightly rates based on market dynamics. They consider supply and demand trends in the local vacation rental market, including seasonal changes in leisure and business travel and regional events. They also look at the nightly rates charged by other short-term rental hosts in the area.
The nightly rates offered by the best dynamic pricing tools are tailored to your rental property's specific characteristics, helping you maximize occupancy and monthly rental income. Moreover, dynamic pricing tools can automatically push suggested rates to Airbnb and other platforms without you lifting a finger.
What Are the Benefits of an Airbnb Dynamic Pricing Tool?
Using an Airbnb dynamic pricing tool, you can stay ahead of market trends and ensure your vacation rental performs to its potential, leaving no money on the table. It gives you a competitive edge by ensuring your prices are attractive to potential guests while keeping your rental profitable.
A pricing tool saves you time and effort by automatically adjusting your prices based on real-time market data. So instead of crunching numbers, you can focus more on other important aspects of hosting, such as providing an excellent guest experience that leads to great reviews and repeat bookings.
You’re still in control of your Airbnb pricing. A dynamic pricing tool performs market analysis for you and provides insights and a strong starting point. However, you can manually adjust the suggested rates and change your rules to ensure you get the most out of your STR property.
Airbnb Pricing Tools: What Are Your Options?
Essentially, there are three options:
Airbnb’s built-in Smart Pricing
Third-party dynamic pricing tools
Proprietary dynamic pricing tools built into PMS
Airbnb’s Smart Pricing tool is free for all hosts. They can turn it on or off for each of their listings. You can enable this feature by entering the minimum and maximum nightly prices. Airbnb will adjust your nightly rates to maximize bookings within the selected price range based on local demand.
However, the problem is that Airbnb Smart Pricing is designed to optimize reservations and occupancy rates. So the tool may underprice your property to attract guests and increase your booking rate, thereby reducing overall revenue. And as an Airbnb host, your goal is to maximize income, not just occupancy.
Besides, Smart Pricing operates only within the Airbnb platform. It has no integrations with property management systems, so controlling your nightly rates will be challenging if you list on multiple channels.
So many hosts and property managers prefer third-party dynamic pricing tools that work with Airbnb listings, integrate with the vacation rental property management systems they use, and better align with their financial goals. These pricing tools use proprietary algorithms to recommend the optimal nightly rates based on a comprehensive analysis of current market data and historical trends.
Most importantly, third-party dynamic pricing tools may offer more lucrative rate recommendations because they are designed to boost revenue, not just bookings. However, premium pricing tools come with costs that can vary from one tool to another and can be charged as a flat rate per property or as a percentage of booking revenue.
Many short-term rental property management software tools, including Hospitable, have proprietary dynamic pricing tools to help hosts and property managers implement dynamic pricing for their properties. However, while other PMS offer dynamic pricing as a paid add-on, Hospitable’s Dynamic Pricing solution is included in Host, Professional, and Mogul subscription plans, at no extra cost.
| Hospitable | Hostaway | Guesty | Lodgify | Hostfully |
Integration with third-party dynamic pricing | Yes | Yes | Yes | Yes | Yes |
Proprietary dynamic pricing | Yes | Yes | Yes | Yes | No |
Proprietary dynamic pricing cost | Included in all plans | Paid add-on | Paid add-on | Paid add-on | n/a |
If you’re currently using a third-party pricing tool, you can switch to Hospitable’s Dynamic Pricing and stop overpaying for solutions included in your Hospitable subscription. Dynamic Pricing is easy to get started with.
Just select a base price strategy that aligns with your revenue goals and set your minimum and maximum daily rates. You can also customize your pricing by applying advanced settings, for example, set both an ideal minimum stay length and the shortest stay length. Then, as booking windows shorten, the system will automatically lower restrictions to fill your gap nights and secure last-minute bookings, without you lifting a finger.
Hospitable’s proprietary pricing engine automatically analyzes millions of market data points. It adjusts rates in real time based on market conditions, such as demand, competition, seasonality, local events, day of the week, and other factors, to help maximize your revenue and optimize occupancy. As soon as you enable dynamic pricing for some or all of your listings, our system will push the recommended prices to all your connected booking channels, including major OTAs, such as Airbnb, Vrbo, Booking.com, and Agoda, as well as your direct booking website.
Then, the nightly rates are automatically updated every 24 hours based on the latest market conditions. It’s essential that you can still adjust prices manually at any time from your Hospitable calendar, ensuring you’re always in control.
Final Thought
A dynamic pricing tool is now a must-have for savvy Airbnb hosts and property managers who want to maximize their properties’ potential. Such tools automate adjusting rates, helping you stay competitive and ensure you’re not leaving money on the table. A good dynamic pricing tool will help you set the perfect price every time, improve your vacation rental's performance, and achieve your revenue goals.
