Home-rental company Airbnb today said that it is starting to make pricing tips available for hosts who have historically decided on their own how much to charge their guests.
“You’ll be able to get personalized, daily pricing information right in your calendar, so you can see how adjusting your price could increase your chances of getting booked, or take advantage of strong interest in visiting your area,” Airbnb said in a blog post on the news, which was announced at the company’s 2015 OpenAir developer conference in San Francisco.
The new feature takes advantage of the data Airbnb already has — the place the host wants to rent out, the price, how close the booking date is, and so on. The tips take into consideration the likelihood of a given person to book a listing on a certain date for a variety of prices. The best part? The model gets better over time.
In addition to getting better results for hosts, the new feature should help Airbnb itself take in more revenue as bookings become more likely to happen. That’s critical for San Francisco-based Airbnb, which was reported to be raising money in March at a $20 billion valuation. The company surely wants to justify its valuation — one of the highest for any private company — by growing even faster.
With the introduction of pricing tips, Airbnb hosts can more easily control their destiny. They’ll get a sense of how the likelihood of being booked changes if they lower their price.
People using the new feature are already seeing benefits.
“While there’s no guarantee price tips will increase bookings, we’ve found that when a host selects a price that’s within 5 percent of their tip, they’re nearly 4 times more likely to get booked, when compared to hosts whose prices are more than 5 percent away from their tip,” Airbnb wrote in the blog post.