Why Airbnb Prices Keep Changing: Your Guide To Maximizing Nightly Rates

Have you been scrolling Airbnb and wondering why Airbnb prices keep changing? When you look at one listing, the pricing could be wildly different between two different trip dates, like July and December, and leave you scratching your head as to why!

This is called dynamic pricing and it’s a tool that expert hosts use to make sure they are capturing maximum revenue year round.

So if you come across an Airbnb listing that has prices that change by season you have discovered the secret to maximum ROI. I’ll dive in and show you the power of dynamic pricing.

This post is all about why Airbnb prices keep changing.

Why Airbnb Prices Keep Changing

So, why do Airbnb prices keep changing…

If you’re doing a deep dive on listings in your market and see that the nightly pricing is different based on the day of the week or time of the year, the host is using a dynamic pricing tool.

Are you new to Airbnb? Use my link to start your first listing and earn an extra $40 from Airbnb for hosting your first guest!

What is dynamic pricing?

Dynamic pricing is a hospitality industry tool that automatically fluctuates the nightly price of a stay (hotel or short term rental) based on the market demand. The tool pulls market data for all surrounding like listings and hotel data to give you the best possible nightly price. It takes into account the surge in searches for accommodations and understands holiday pricing or event pricing so you maximize your revenue when possible.

Do I need to be using it as a host?

You absolutely need to be using this as a host. Airbnb has “Smart Pricing” which is similar to using one of these tools but its capabilities are limited. Other tools have the ability to set so many more specific rules taking customization to a whole new level!

What if no other hosts are using it in my market?

So if most of the other hosts in your area are just using static pricing (no dynamic pricing tool) this could make some inexperienced operators think they don’t need to use dynamic pricing. You are so wrong! This is actually showing the greatest opportunity for you to take your listing to the next level.

Can I set it and forget it?

Absolutely not. If you got into the short term rental game for passive income, you got into the wrong business. This is very much something you have to participate in and dynamic pricing is no different. You can automate it but you will still need to go in and check it, do market research and ensure you’re always maximizing your nightly rate to increase year over year revenue.

Best Dynamic Pricing Tools

Airbnb’s Smart Pricing

Airbnb has their own dynamic pricing tool called Smart Pricing. This is the easiest solution for hosts and honestly does a fairly good job if you’re just looking to get familiar with dynamic pricing. I use it for a couple of my listings that are not strictly short term rentals. There are 5 listings that I will rent out monthly as furnished units and if I am trying to fill vacancy between longer bookings, I’ll turn on this tool to just get the gaps filled.

Now, Airbnb’s goal is to get more users and bookings so be weary of relying on it too much. They make their money when guests use the platform so they want all the listings to maximize occupancy and will therefore drive nightly prices down if there’s open space on a listing’s calendar. So if you’re looking to fully embrace dynamic pricing, I’d recommend looking into one of the tools below.

Pricelabs

Pricelabs is the tool I use in my business! It was recommended by someone on YouTube a couple years ago and I did their 30 day free trial and have been hooked ever since. Their platform charges by listing and it tiers down by the number of listings you have integrated so it’s easy to track. It’s a month to month subscription as of June 2024 so you can cancel at any time.

This tool offers SO many customizations and rule setting options. I love how granular it gets and am learning a ton about revenue generation and consumer buying habits by staying tuned into this tool. I’d highly recommend it as it’s done wonders for my business and really shown me the power of pricing yourself correctly.

Read more about how to set up an Airbnb listing here!

Beyond

Beyond pricing is another dynamic pricing tool I have heard other Airbnb investors talk about and love! I personally have never tried it but would recommend you look at it if you’re shopping dynamic pricing tools.

A few key differences from Pricelabs. They charge a % of the booking revenue as the fee for using the dynamic pricing tool, whereas Pricelabs is a fixed rate you pay per month per listing. If you have a high revenue generating property, giving up 1-2% in revenue and pay credit card processing fees can add up.

They also claim to be an easy tool to integrate without having to set up a ton of customizations because their integration algorithm is just that good.

Lodgify

Lodgify is a property management software tool that incorporates dynamic pricing into their offering. If you only have 1 listing and are looking to stay small, this will not be the right avenue for you. But if you’re looking at a property management software and dynamic pricing solution, this could be a great option to have something fully integrated.

Look into it and see if it’s what you’re looking for! I love their take in the FAQ, they’re a great tool if you’re looking to take your business from 1 listing to a 1,000!

AirDNA

Lastly, AirDNA is first an Airbnb/short term rental data company but they now have a dynamic pricing tool that integrates directly with Airbnb. Right now that’s the only OTA that they can integrate with so it will be interesting to see where they take it. So many investors use AirDNA for market research so I personally would love to see them offer other tools.

What dynamic pricing tool do you use? Let me know in the comments below!

This post was all about why Airbnb prices keep changing.