Airbnb is launching a new tool to help hosts price listings more competitively and maximize the money they earn on the platform. Airbnb charges a 3 percent fee on every transaction, so what's good for hosts is, of course, good for its bottom line.
The new tool, called "Smart Pricing," lets hosts enter enter minimum and maximum prices and how frequently they want to host. Airbnb combines that information with data about supply and demand based on guest activity on its platform, seasonality, special events and delivers recommended prices tailored to each individual property.
For example, if a host has a home to rent in the Bay Area over Super Bowl weekend, Airbnb's algorithm will crunch all its data to suggest the optimal nightly rate.
Once set up, Smart Pricing will continually adjust to reflect market fluctuations with no further input from hosts.
Airbnb would not reveal how much it expects this new technology, which builds on Price Tips that rolled out in June, to boost revenue. "Since we have rolled out Price Tips, the precursor to Smart Pricing, 20 million nights have been priced using it and hosts have seen a 13 percent increase in their revenue," said Vice President of Product Joe Zadeh.
"We haven't made any projections for Smart Pricing, but its success will depend on uptake and adoption, and we expect hosts to want to have the right price for their listings."