Does anyone use VRBO or Airbnb dynamic pricing?

Question

I'd like to know if hosts are using the dynamic pricing tool on Airbnb and VRBO. If so, do the suggested prices seem to be paying off?

I update my prices weekly, adjusting just a bit here and there according to my own research. If I accept the suggested pricing opportunities it could drop my rates by $100 / night in some cases. However, leaving them where they are I feel like I'm missing out on bookings.

Ryan Moyer · Answer

Airbnb dynamic pricing has ruined the whole industry.

Airbnb's dynamic pricing isn't designed to get YOU a booking.  It's designed to get AIRBNB a booking.  Because Airbnb only makes money when the guest books on Airbnb.

Hence, they want the price to be cheapest on their platform, so people book on Airbnb instead of elsewhere, and want their properties to be able to compete with hotel prices (even after cleaning fee and service fees).  That means their pricing tool is designed to price beneath the rest of the market, which drags the entire market down, especially when combined with their algorithm changes a couple years ago that made pricing (IE lower prices) the #1 factor in ranking.

Even if you use an external pricing tool, it gets dragged down by the people using Airbnb's pricing.  But at least you have a chance, and aren't exacerbating the problem as much.

Myka Artis · Answer

I use Beyondpricing and Pricelabs for my dynamic pricing. I use Beyond pricing in my vacation rental markets and Pricelabs in my city/mid-term rental markets. That has worked best for me, but it's always best to test to see what results you get. I never liked Airbnb's or VRBO's pricing structure because it seemed more like they set a price that will get you booked so they can get paid, and not necessarily for the profitability of your listing.

Patricia Andriolo-Bull · Answer

What is your current occupancy rate?  If you are getting what you are looking for then I wouldn't be worried about leaving bookings on the table, if you aren't, you may have to tweak your rates (or other things about your listing).  I am not looking for 100% occupancy.  I am quite happy with 70 - 75%.  My rates are higher than what both VRBO and AirBNB and Airdna has ever suggested but I keep my eye on competitors and am happy pricing higher and turning away some of the guests that might book for lower.  That said, Pricelabs, Wheelhouse, Beyond, are all good, too, but I don't think they replace you knowing your market to set the parameters for them to use.

Krishnan Iyer · Answer

Ditto, I use PriceLabs for my STRs - here is a nice writeup ...

Airbnb Smart Pricing Vs PriceLabs: An In-Depth Comparison For Hosts | Boost Your Short-Term Rentals

Lauren Kormylo · Answer

No, I use PriceLabs which is dynamic pricing and adjusts prices on both platforms daily.

Jared Hottle · Answer

In Iowa we have not done this. Seems like a good idea in theory maybe not in practice.

Troy F. · Answer

Jonathan,

Impressive results. Thanks for the link to your article. I'll consider reaching out.

Account Closed · Answer

I believe Ryan mentioned this above. Airbnb dynamic pricing is a joke. Any pricing-related tool offered by the OTA itself (think of VRBO, booking etc) is there to ensure you are getting heads in beds at any rate possible, just to ensure they are getting paid.

I've been doing revenue management for over 10 years now (hotels and STRs). Pricing tools that exist on the market are decent, but you also need to know how to control it, otherwise, it will go nuts with unrealistic rates far out and extreme last-minute discounts. Out of all the tools I would personally suggest Pricelabs for sure. Even if you don't use their dynamic pricing tool, al least it has decent data for you to get a better overview of the market, your compset and market trends.

Christina B. · Answer

Hi Troy. I use Pricelabs but make a lot of manual adjustments. What I found with Airbnb's pricing is consistent with the above- their recommendations are for lower pricing (and not in the host's best interests). With VRBO, strangely, it keeps recommending significant increases which isn't wrong. However (to go into detail requires a separate post), that's not quite the correct course either. Pricelabs costs but the ease with which all the comp sets are gathered and updates both calendars on Airbnb & VRBO make the subscription worth it to me.

Does anyone use VRBO or Airbnb dynamic pricing?

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