Let’s see if you should turn on Airbnb Smart Pricing or if Mashvisor’s Dynamic Pricing would be a better fit for your smart pricing strategy.
Deciding on the right pricing strategy for Airbnb can bring in more guests and higher profit.
Table of Contents
- What Is Airbnb Smart Pricing?
- How Does Airbnb Smart Pricing Work?
- Mashvisor’s Dynamic Pricing Tool: A Game Changer?
- Is Mashvisor’s Dynamic Pricing Better Than Airbnb Smart Pricing?
- Summing Up
- Frequently Asked Questions
Putting a price on your Airbnb investment property depends on a lot of factors. As hosts, you need to consider several factors, such as the location, seasonality, amenities, and even your guests’ profile.
Plus, coming up with a smart pricing strategy on your own can be time-consuming.
That’s why investors nowadays rely on tools that factor in the above variables and help them set a competitive price on their Airbnb investment. But here’s the thing:
One dynamic pricing strategy may work for one type of investment but not for the other—and vice versa.
In this article, we’ll take a better look at Mashvisor and Airbnb dynamic pricing strategies and help investors figure out which tool works better for them.
What Is Airbnb Smart Pricing?
If you’re in the real estate investment business, you’re probably aware that when you first set up the Airbnb listing, it offers the option to set your prices dynamically. It means that they change in real-time based on the changes in supply and demand within your market.
Well, Airbnb offers a tool that helps investors analyze the factors that determine their Airbnb nightly rate. The Airbnb Smart Pricing tool assists investors in overcoming their “blind spots” when it comes to pricing.
Basically, it enables setting the price that automatically increases or decreases to match the real estate market demand.
The easiest way to understand the Airbnb smart pricing algorithm is to remember how hotels might charge different rates for different nights of your stay.
How Does Airbnb Smart Pricing Work?
The Airbnb Smart Pricing tool sets a competitive price for your investment property. Before it does so, it takes into account numerous factors, which we’ll get to in a minute. The purpose of the dynamic pricing Airbnb tool is to ensure the optimal price and give you a competitive edge.
The process of setting up Smart Pricing is straightforward; we’ve outlined the steps below:
- Log in to Airbnb, go to “Listings,” and select the one you want.
- Click on “Pricing and Availability,” then navigate to “Pricing.”
- Click the “Edit” button next to the “Nightly Price.”
- Enable “Smart Pricing” and select the minimum and maximum prices for that listing.
- Save your changes.
And that’s it; you’ve successfully turned on Smart Pricing on Airbnb.
What Factors Determine the Price
As we explained earlier, the Airbnb smart pricing algorithm updates a listing’s price based on real-time metrics. Here are the main factors that can help Airbnb determine and optimize the price of your real estate property:
Offered Amenities
When guests browse Airbnb properties to stay in, they tend to look at what the property offers in terms of amenities. Since they are booking a short-term stay, they want to ensure that all their needs are met—and that they don’t need to bring much with them.
In short:
The better the selection of amenities available on the property, the better the offer for guests.
Of course, it is in the best interest of the Airbnb host to provide future guests with everything they need, but they should also remember the following:
More amenities could potentially increase the nightly rate for Airbnb stays.
To help real estate investors put things into perspective, here are some of the most popular, sought-after Airbnb amenities that will ramp up their booking prices:
- An in-house dryer and washer
- A kitchen with necessary utensils
- A workspace
- Air conditioning and/or heating
- An outdoor area
- A pool or hot tub
- Cleaning supplies
Demand
The next factor that Airbnb analyzes in great detail is the demand for short term rentals in the area. For instance, if the area shows that there is a high demand for Airbnbs, the price will surely go up.
Even more so, if your Airbnb is located in a popular tourist area, the booking calendar will already be full. The price per night will go up, too.
Here’s an example:
If you’re a host in North America, the peak season for your Airbnb investment property would be anywhere between May and September. That is when most people take annual leave and go with their families and children to enjoy the summer.
The rest of the year is described as the “off-season.” It can be hard—but not impossible—for hosts to pull in bookings during that time, which ultimately affects their bottom line.
Availability
You can say that demand and availability go hand in hand.
Of course, local market demand exerts a major impact on smart pricing on Airbnb investments. However, the “off-season” shouldn’t be taken lightly. Potential guests will check your Airbnb’s availability regardless.
Ideally, your property should be available year-round, which suits guests who aren’t traveling during the peak season between May and September. They should enjoy the option to come and book your property; Airbnb may reward such availability with higher rates.
Type of Rental Property
Firstly, it’s important to understand that there are different types of Airbnb properties that are available. And by choosing a type of rental property, investors will already be able to assess their potential profit.
For instance, if the target demographic is young tourists, private or shared rooms will be just fine. On the other hand, if your Airbnb property is located in a more family-friendly area, then apartments—and even single family homes—will attract the said target group.
Other Searches
Another major factor that Airbnb will consider here is competition.
There is a high likelihood that your Airbnb property is not the only one in the area. There are other listings that may or may not be similar to yours. Some are priced higher, and some are priced lower.
That’s to say, the Airbnb dynamic pricing tool will analyze the rest of the competition, as well. It essentially looks at other searches for similar properties that would indicate popularity and higher demand for that specific type of property.
Read Also: 100 Best Short Term Rental Markets in 2023
Mashvisor’s Dynamic Pricing Tool: A Game Changer?
Now that we’ve covered the Airbnb smart pricing review, we’d like to move on to Mashvisor. Let’s see how it differs from Airbnb’s tool. Find out whether it can be a game changer for real estate investors hoping to invest in short term rentals in 2023.
And what better way to answer all pressing questions than by providing insight into Mashvisor’s Dynamic Pricing tool and its main features?
Connecting Rental Accounts
If you’re not exactly new to the real estate game and currently manage multiple Airbnb properties, connecting your rental accounts will make your life ten times easier.
With Mashvisor’s Dynamic Pricing tool, you can connect your accounts and get up-to-date insights into all your listed properties, which, as you can imagine, saves quite a bit of time.
Smart Pricing Calendar
Tackling a ton of information on your own can become overwhelming, if not impossible, after some time.
That’s where Mashvisor’s Smart Pricing Calendar comes in.
As we’ve mentioned before, there are numerous factors that can influence your property’s price. The calendar feature allows real estate investors to gather historical market information about events, booking history, and seasonality that might be detrimental to the property’s success.
Sync Option
One of the most useful features for real estate investors is the option to get synced with the Airbnb platform they are already using. That way, investors won’t need to shift between tabs manually and can simply integrate the suggested prices with the listing platform.
Mashvisor’s Dynamic Pricing tool allows real estate investors to get up-to-date insights into all their listed properties.
Is Mashvisor’s Dynamic Pricing Better Than Airbnb Smart Pricing?
Both Mashvisor’s and Airbnb’s Dynamic Pricing strategies are essential to an investor who is planning on listing their property, bringing in guests, and generating profit. When they are running side-by-side, though, it’s hard not to try and compare their efficiency.
Truth be told, it’s a matter of nuances.
When it comes to Mashvisor’s Dynamic pricing tool, it relies on cutting-edge AI and machine learning algorithms. They allow the tool to collect and thoroughly analyze a wide range of data that will determine your rental property’s optimal price.
The best part of the said dynamic pricing tool is that it places a lot of importance on rental comps, which are key to the success of your investment property. By doing so, Mashvisor is able to forecast the fair market rental rate and potential cash flow.
With Airbnb Smart Pricing, on the other hand, we can see that the tool relies on automatic nightly pricing. And sometimes, the best interest can take a toll on the end result.
You’re one click away from starting successful real estate research and pinning down the next best investment. Mashvisor’s features are designed to help you navigate the US real estate market in the best way possible.
Sign up for Mashvisor’s 7-day free trial now and begin your real estate investment journey.
Summing Up
We’ve successfully covered the topic of Airbnb Smart Pricing and discussed how the tool compares to Mashvisor’s Dynamic Pricing. We’ve reviewed both strategies and explained why they might be a good—or bad—idea for real estate investors.
Now, let’s follow up on some key takeaways from both smart pricing strategies.
Investment pricing tools help the real estate investor put a price on their rental property while simultaneously taking into account the factors that depict the value of your property properly.
Your property’s location, seasonality, the amenities you offer—and the type of property that’s on the market—can all heavily influence the price.
When discussing Airbnb Smart Pricing vs Mashvisor Dynamic Pricing, the differences come down to nuances. Even though Airbnb Smart Pricing is a helpful tool in the real estate game, one of its “hiccups” is its pricing automation feature.
Mashvisor’s Dynamic Pricing tool provides the investor with a chance to connect their Airbnb accounts, set up a smart calendar that keeps track of them, and allows them to sync with the Airbnb platform their property is listed on.
Investment property-hunting is a much easier and straightforward process when you can rely on the help of investment tools. Mashvisor’s investment features and tools are created to aid investors in finding their next successful investment property.
Schedule a demo today and see how Mashvisor’s features and tools can help you.
Frequently Asked Questions
Being the best in the real estate business means always being one step ahead. Here are a few frequently asked questions.
Is It Better to Use Smart Pricing on Airbnb?
Smart pricing on Airbnb isn’t profitable.
Although it may sound like a good idea at first, smart pricing on Airbnb can be unreliable. It’s in your best interest for your Airbnb listing to be booked for as much as possible. However, smart pricing might rely on lower prices.
Lowering prices drastically is not something that will help you generate profit in the long run.
How Do I Use Smart Pricing on Airbnb?
You can start using smart pricing on Airbnb in five simple steps:
- Go to “Listings” and select the one you want.
- Select “Pricing and Availability,” then go to “Pricing.”
- Click “Edit” next to the “Nightly Price.”
- Enable “Smart Pricing” and select the minimum and maximum prices.
- Save your changes.
What Pricing Strategy Does Airbnb Use?
A vacation rental pricing strategy is founded on the idea of dynamic pricing. The algorithm takes more than 70 different factors into account to automatically adjust the pricing for each night. As the host, you still retain the right to set a maximum and minimum price per night, though.
What Is Smart Pricing Strategy?
A smart pricing strategy relies on dynamic pricing rules and adjusting your rate based on the changing real estate market conditions. Smart pricing monitors market fluctuations, demand, and competitors’ prices and determines the optimal price based on the available data.