If you’re not updating your nightly rates based on seasonality, day of the week, local events, and other factors, you’re doing it all wrong.
Setting the same price for every day of the year is losing you money.
To make sure that your prices are competitive all year round and that you’re maximizing your profits, you need to start using an automatic pricing tool.
Airbnb pricing tools allow you to automatically adjust your rates and push your updated prices to your channels. They help prevent you from leaving money on the table by pricing your rentals too high or too low.
They are essential members of a property manager’s toolbox, as they can help you increase your revenue by a significant margin.Let’s see how Airbnb pricing tools work and which ones are the best for small hosts with a few listings.
Want to increase your profit with an easy-to-use pricing tool? Host Tools comes with pre-built pricing templates focused on increasing your profit, not just your occupancy. Try a month for free today.
Why Airbnb Smart Pricing doesn’t work
You may be wondering why you should use an automatic pricing tool when Airbnb has its own Smart Pricing solution.
The answer is simple: because Airbnb Smart Pricing doesn’t act in your interest only.
The problem with Airbnb Smart Pricing is that it has a double objective. It doesn’t just want to help hosts earn more money but it also wants guests to get the lowest possible prices.
That’s why the tool is inevitably going to underprice your rentals.
It may get you high occupancy - but it won’t get you the best daily rates. And, if you’ve been renting your place out for a while, you’ll know that optimizing for profit, not occupancy, is the way to go.
What’s more, Airbnb Smart Pricing lets you set a minimum price and a maximum price, but it doesn’t let you set a base price. This leaves you with practically no room for customization, and the tool is likely to end up recommending the same price for each day.
Don’t settle for a limited tool like Airbnb Smart Pricing. Instead, explore some options that allow you to truly get the best rates for your rental each day, and save time by automating price adjustments.
Rule-based pricing vs dynamic pricing
When choosing an automatic pricing tool, you have two options: rule-based pricing and dynamic pricing.
Rule-based pricing tools allow you to automate your pricing by creating a set of pricing rules that are tailored to your listing. This approach requires a deep knowledge of your local market and an awareness of how demand shifts throughout the year.
Dynamic pricing tools, on the other hand, use big data and machine learning technologies to analyze fluctuations in market supply and demand. They provide price tips based on a myriad of data points, from historical performance data to special events and local holidays.
While both are good solutions, rule-based pricing is generally better for smaller hosts because it’s simpler to use and can be more easily tailored to your listing. Who knows your listing better than you do?
Large property managers benefit more from dynamic pricing tools because they can apply price recommendations in bulk, without customizing their pricing strategy to each individual rental.
The best Airbnb pricing tools in 2021
1. Host Tools
Host Tools is an automatic pricing tool that lets you create a highly customized pricing plan specific to your listing.
It’s excellent for small short-term rental hosts because:
Easy set-up: It has a rule-based pricing engine that’s easy to set up and maintain.
Intelligent pricing strategy: It lets you create an intelligent pricing strategy so you never under- or overprice your listings.
Direct API integration with Airbnb and Vrbo: it automatically updates your prices on your channels every 6 hours, keeping your calendar up-to-date and increasing your search ranking.
Complete control over your pricing: intelligent settings will get you the best nightly prices for your listings every single day.
Comes with other useful features for short-term rental hosts: Besides being an automatic pricing tool, Host Tools also has other useful features for short-term rental hosts to save time and increase their efficiencies, such as channel manager, a messaging automation tool, and smart lock support. All included in the price of just $5.00 a month per listing!
How to create pricing rules in Host Tools
Rule-based pricing means that you can create pricing rules that stack on top of each other.
Step 1: You start with a base rate, which can be the rate suggested by Airbnb’s Smart Pricing tool, and apply pricing rules on top of it.
You can adjust your prices using intelligent price settings as much as you like. There are no restrictions!
Step 2: Once you’ve set up your pricing rules, you can select a date range in the calendar to see all the rules that have been applied to calculate the final price.
Step 3: When creating a new pricing rule, Host Tools lets you choose from pre-built pricing templates. These are extremely useful for hosts who are just starting to automate their Airbnb pricing. You can customize these templates to fit your listing.
If you want to create a pricing rule from scratch, you can select one of four different rule types.
These are the rule types available in Host Tools:
- 1Floating Window of Days: lets you create a pricing rule that affects a certain number of days in the future. For example, you can decrease your prices by a percentage over the next 7 days.
- 2Orphan Periods Between Bookings: lets you apply a pricing rule to a certain number of unbooked nights between two bookings.
- 3Date Range: lets you select a specific start date and end date for your pricing rule.
- 4Months: lets you select a specific month to apply your pricing rule to. For example, if your high season is June-July-August, you can apply a pricing rule to those months only.
Step 4: After you’ve chosen your rule types, you can fine-tune your settings using the pricing options.
For example, you can set a minimum price, a maximum price, increase or decrease prices by a certain amount, increase or decrease prices by a certain percentage, or set minimum nights to apply the pricing rule to.
These settings allow you to control your pricing to the last detail, in an easy and efficient way.
Unlike other pricing tools, Host Tools doesn’t have a big learning curve: it’s straightforward and user-friendly. So even if you’ve never used an automatic pricing tool before, you’ll be able to start optimizing your pricing in no time.
And, should you need assistance, you can get in touch with the tool’s developer - a property manager himself, who offers personalized guidance to all of his customers.
2. Beyond Pricing
Beyond Pricing was founded in 2013, making it the oldest dynamic pricing and revenue management tool built specifically for vacation rentals. Over the years, the company has built up a huge database to fuel its pricing recommendations.
To find the best rate for your listings for each night, the pricing algorithms of Beyond Pricing takes into account:
Your listing’s historic performance
Your competitors’ performance
Real-time demand (hotel prices, flight demand, local events, etc)
Beyond Pricing allows you to set your own base price and decreases or increases it based on market data. It helps you set your base price by calculating an occupancy-based Health Score.
The tool is fairly easy to use and integrates with many other software providers, including property management systems and channel managers.
Keep in mind that it only has email support, so you may have to wait for a response even if you need urgent assistance.
All in all, Beyond Pricing is better for property management companies with tens to hundreds of listings than small hosts, as it can get quite pricey and doesn’t have any additional features included in the price.
Plus, if you want the 1% per booking rate, you need to commit to an annual plan. Or, you can choose a monthly plan for a 1.25% per booking fee plus an implementation fee.
PriceLabs is a highly customizable dynamic pricing tool that supports a wide range of software integrations.
When generating pricing recommendations, PriceLabs looks at:
Local seasonality based on historical data from hotels and vacation rentals
Day of week trends
Lead time (last-minute and early-bird bookings)
PriceLabs helps you set a base price by analyzing your listing’s historic and predicted future performance. Then it calculates recommended nightly rates, which you can fine-tune with the tool’s extensive customization options. Because it’s so customizable, PriceLabs has a bigger learning curve than the other tools on this list.
Another factor to take into account is pricing. PriceLabs charges a monthly flat fee that starts at $19.99 for the first listing. This makes it extremely expensive for hosts who manage one to a handful of properties.
At the same time, it’s great for big property management companies with 101-1000 rentals, because each listing after the 100th costs only $4.49.
Wheelhouse gives you data-driven pricing recommendations while also allowing you to personalize your dynamic pricing strategy.
To come up with competitive pricing recommendations, Wheelhouse analyzes:
Days of the week
Historic listing performance
Hotel and vacation rental prices
Wheelhouse lets you select a base price using one of three approaches:
More conservative (focusing on increasing occupancy)
More Aggressive (focusing on getting the highest price per night) or
Recommended (a balanced approach).
Alternatively, you can set an entirely custom base price.
Then, you can adjust more than 10 different settings to personalize your pricing strategy according to your goals.
Like Beyond Pricing and PriceLabs, Wheelhouse is geared more toward medium to large property managers than small short-term rentals owners. If you have fewer than 10 properties, you pay a 1% commission per booking. But if you have more than 10, you only pay 0.75%.
An important thing to note is that Wheelhouse doesn’t integrate with Vrbo, only Airbnb and Tripadvisor. So if you’re a small host and Vrbo is an important source of bookings for you, Wheelhouse is probably not the right tool for you.
Best Airbnb pricing tools comparison chart
$5.00 per month per listing
1% per booking (annual plan)
1 listing: $19.99, 2-5 listings: $14.99 (for each listing after the first), etc.
1-9 properties: 1% per booking, 10 or more properties: 0.75% per booking
Airbnb, Booking.com, Vrbo (+ channel managers)
Airbnb, Booking.com, Vrbo, Tripadvisor (+ channel managers)
Airbnb, Tripadvisor (+ channel managers)
Channel manager, automated messaging and reviews, smart lock support (included in the price)
Performance metrics, OTA syncing, direct booking engine, and website builder (extra fees)
Live chat and email. Direct contact with the founder and developer
Live chat and email
Live chat and email
Small hosts (1-9 listings)
Medium to large property management companies (10+ listings)
Large property management companies (100+ listings)
Medium to large property management companies (10+ listings)