You list your Airbnb at $150 per night. Your calendar fills up fast — great news, right? Then you check comparable properties. They’re charging $200 for the same dates and still getting booked solid. You just left $1,500 on the table last month alone.
Or maybe it’s the opposite problem. You set your rate at $250 based on what you think your place is worth. Weeks go by with zero bookings while similar listings at $180 are constantly occupied. You’re losing money either way — once from missed revenue, once from empty nights you’ll never get back.
Getting your Airbnb pricing strategy right means finding the balance between maximizing revenue and maintaining occupancy. Too high and you sit empty. Too low and you leave money on the table. This guide shows you how to nail it.
Here’s what we’ll cover:
- The 4 main Airbnb pricing models (and which one fits your situation)
- Why Airbnb Smart Pricing might be undervaluing your property
- 7 advanced strategies to boost revenue without killing occupancy
- How to set a base price that actually makes sense
- Common pricing mistakes that cost hosts thousands
Let’s start with the basics.
The 4 Airbnb pricing models
Most hosts use one of these four approaches. Each has clear advantages and drawbacks depending on your goals, time, and portfolio size.
- Flat pricing
- Manual pricing
- Airbnb Smart Pricing
- Dynamic pricing
Quick comparison: Which pricing model fits your needs?
| Pricing Model | Time Required | Revenue Potential | Best For | Main Drawback |
|---|---|---|---|---|
| Flat pricing | 5 minutes (one-time setup) | Low – misses demand peaks and valleys | Stable markets with year-round demand, minimal competition | Leaves money on table during high demand, struggles during low seasons |
| Manual pricing | 2-3 hours weekly | Medium to High – depends on your market knowledge | 1-3 properties, hosts learning their market, those who want complete control | Time-intensive, hard to scale, easy to miss opportunities |
| Airbnb Smart Pricing | 10 minutes (one-time setup) | Low to Medium – prioritizes bookings over revenue | Hosts prioritizing occupancy, those wanting free automation | Often undervalues properties to drive more bookings for Airbnb |
| Dynamic pricing | 30 min setup + minimal monitoring | High – algorithms optimize based on market data | Multiple properties, competitive markets, revenue-focused hosts | Monthly subscription cost (≈ $20-30/property), learning curve |
1. Flat pricing
What it is: Set one nightly rate and leave it unchanged regardless of season, day of week, or local events.
Pros:
- Zero ongoing time investment
- Predictable income per booking
- Simple to understand and manage
Cons:
- Ignores market fluctuations completely
- Likely underpriced during peak demand
- Probably overpriced during slow periods
- Can’t compete with hosts who adjust rates
Best for: Properties in stable markets with consistent year-round demand and minimal competition. Think: corporate housing near major employers or rentals near universities with constant student turnover.
Reality check: Most Airbnb markets fluctuate too much for flat pricing to work well long-term. You’re essentially guessing one “average” rate and hoping it works for all scenarios.
2. Manual pricing
What it is: You regularly log into your listings and adjust rates based on seasonality, local events, weekends, holidays, and competitor pricing.
Pros:
- Complete control over every pricing decision
- Learn your market intimately through hands-on management
- No additional software costs
- Can respond immediately to market changes
Cons:
- Time-intensive, especially with multiple properties
- Easy to miss opportunities or overprice without realizing it
- Requires constant market research
- Difficult to scale beyond a few properties
Best for: Hosts with 1-3 properties who enjoy the hands-on approach and have time to monitor their market regularly. Also good for new hosts learning how pricing affects bookings.
Implementation tip: Set calendar reminders to review rates weekly. Check competitors’ pricing, upcoming local events, and your own booking pace. If you’re booked solid two months out, you’re probably underpriced. If you have lots of gaps one month out, you’re likely too high.
3. Airbnb Smart Pricing
What it is: Airbnb’s built-in tool that automatically adjusts your rates based on demand signals, seasonality, and comparable properties in your area.
Pros:
- Free and built directly into the platform
- Completely automated — set it and forget it
- Considers local demand and events
- Keeps you somewhat competitive
Cons:
- Optimizes for Airbnb’s revenue (booking fees), not yours
- Tends to undervalue properties to drive more bookings
- Limited customization options
- Can’t account for unique property features
- No transparency into how rates are calculated
Best for: Hosts who prioritize occupancy over revenue and want automation without paying for third-party tools. Works better as a baseline that you manually override than as your sole pricing strategy.
The catch: Airbnb makes money on booking fees. More bookings at lower prices generate more fees for them, even if you make less overall. Smart Pricing reflects this reality — it’s designed to maximize platform revenue, not host income.
4. Dynamic pricing
What it is: Third-party tools use algorithms to automatically adjust your rates based on dozens of factors: competitor pricing, local events, seasonality, day of week, booking lead time, and market trends.
Pros:
- Sophisticated algorithms analyze more data than you could manually
- Automatically responds to market changes in real-time
- Most tools let you set rules and override prices
- Scales easily across multiple properties
- Often outperforms both flat and Smart Pricing
Cons:
- Subscription costs (typically $20-30/month per property)
- Learning curve to configure properly
- Still requires monitoring and occasional adjustments
- Quality varies significantly between tools
Best for: Hosts serious about maximizing revenue, those with multiple properties, and anyone in competitive or volatile markets where pricing changes frequently.
Popular tools: PriceLabs, Wheelhouse, and Beyond Pricing are the most widely used. Each has different strengths depending on your market and property type. Learn more about dynamic pricing for vacation rentals and how these tools work.
How to choose your pricing model
Your ideal approach depends on four key factors:
Portfolio size:
- 1-2 properties: Manual pricing is realistic
- 3-5 properties: Manual becomes challenging, consider dynamic
- 6+ properties: Dynamic pricing almost essential
Time availability:
- Can dedicate 2-3 hours weekly: Manual works
- Want minimal involvement: Smart Pricing or dynamic
- Want some control without constant work: Dynamic with manual overrides
Market characteristics:
- Stable demand year-round: Flat might work
- High seasonality or frequent events: Dynamic performs best
- Moderate competition: Manual or Smart Pricing sufficient
- Highly competitive market: Dynamic pricing gives edge
Revenue goals:
- Prioritize occupancy: Smart Pricing acceptable
- Maximize revenue: Dynamic pricing
- Balance both: Dynamic with conservative settings
If you’re just starting out, begin with manual pricing for 2-3 months. This teaches you how your market works. Then upgrade to dynamic pricing once you understand the patterns.
7 advanced Airbnb pricing strategies
Regardless of which model you use, these tactics help optimize revenue and occupancy. You can implement most of them whether you price manually or use automation.
1. Set weekend and weekday pricing
Most markets see higher demand on weekends. Price accordingly.
How it works: Increase Friday and Saturday rates by 10-30% above your base rate. Lower Sunday-Thursday rates by 5-15% if weekday occupancy is weak.
When to use it: Leisure destinations (beach, mountains, tourist cities) almost always justify weekend premiums. Business destinations might see the opposite pattern — higher weekday rates, lower weekends.
Implementation: If using Airbnb’s calendar, you’ll need to adjust these manually or use dynamic pricing software that handles it automatically. Most tools include weekend pricing rules by default.
2. Create seasonal rate tiers
Divide your year into 3-4 seasons based on local demand patterns.
How it works:
- Peak season (highest demand): Base rate + 30-50%
- Shoulder season (moderate demand): Base rate + 10-20%
- Low season (weakest demand): Base rate or slightly below
When to use it: Any market with clear seasonal patterns. Beach towns, ski areas, college towns, and tourist destinations all have predictable seasons.
Implementation: Map out your local seasons first. Check hotel rates, competitor Airbnb pricing, and tourism data for your area. Then build your rate calendar around these periods.
3. Capture event-based demand
Local events can double or triple normal rates — if you catch them in time.
High-demand events to watch:
- Concerts and festivals
- Sports championships or tournaments
- Conferences and conventions
- Holidays (New Year’s Eve, July 4th, etc.)
- College graduation weekends
How it works: Increase rates 50-200% depending on event size and hotel availability. Set these prices 6-12 months in advance for major annual events.
Where to find events: Subscribe to local tourism board newsletters, follow convention center calendars, check concert venue schedules, and monitor sports team schedules.
Pro tip: Conference attendees often book 3-6 months out. Music festival fans book early too. If you’re still at base rates 60 days before a major event, you’ve already missed peak pricing.
4. Use length-of-stay discounts strategically
Longer stays mean fewer turnovers, lower cleaning costs, and more predictable income.
Typical discount structure:
- 7+ nights: 10-15% off nightly rate
- 28+ nights: 20-30% off nightly rate
When to use it: Great for filling low-season calendar, attracting remote workers, or reducing cleaning frequency. Less useful during peak season when you’ll book short stays at full price anyway.
The math: A guest paying 20% less for 30 nights still generates more total revenue than three separate 3-night bookings at full price (after accounting for cleaning costs and vacant nights between bookings).
5. Fill gaps with last-minute discounts
Empty nights generate zero revenue. A discounted booking beats nothing.
How it works: If you have gaps within 7 days of check-in, drop rates 15-25% below base price. For gaps within 48 hours, consider going 30-40% below base.
When to use it: Low season, mid-week gaps, or orphan nights (single-night openings between bookings that are hard to fill).
Implementation: Dynamic pricing tools often handle this automatically. If pricing manually, review your calendar every few days and adjust rates for approaching gaps.
Don’t overdo it: If you’re constantly discounting last-minute, your base rates are probably too high. Adjust your strategy rather than relying on perpetual discounts.
6. Implement far-in-advance premiums
Charge more for dates 3-6 months out when early planners are willing to pay premium rates to secure their dates.
How it works: Set rates 20-30% above base for dates 90+ days away. Gradually reduce toward base rate as check-in approaches. If you’re not booking, the price comes down. If you book at the premium rate, you capture extra revenue.
When to use it: Peak season dates, major events, holidays, and any period with historically strong advance bookings.
Why it works: Early bookers often prioritize securing their preferred dates over getting the absolute lowest price. They’re willing to pay more for certainty.
7. Adjust for day-of-week patterns
Beyond just weekend vs. weekday, some markets have specific patterns worth exploiting.
Examples:
- Beach towns: Friday check-ins command premium (start of weekend getaway)
- Business districts: Sunday-Monday check-ins cost more (weekly business stays)
- Near airports: Rates spike on major travel days (Wednesday before Thanksgiving)
How to find patterns: Review your booking history. When do guests typically check in? Which nights stay booked and which have gaps? Adjust rates to match these patterns.
How to set your Airbnb base price
Your base price is your foundation. It’s the minimum rate that covers costs and generates profit. Everything else adjusts up or down from here.
Step 1: Calculate monthly operating costs
Add up:
- Mortgage or rent payment
- Property taxes
- Insurance
- HOA fees (if applicable)
- Utilities (electricity, water, gas, internet)
- Cleaning service per turnover
- Supplies (toiletries, coffee, linens)
- Maintenance reserve (5-10% of revenue)
Step 2: Factor in Airbnb fees
Airbnb charges hosts 3% per booking. Guests pay an additional 14-16% service fee, but that doesn’t come from your revenue. Your 3% does.
Step 3: Research competitor rates
Search Airbnb for properties similar to yours:
- Same location (within 1-2 miles)
- Similar size and amenities
- Comparable condition and style
Note their rates for different seasons and days of week. This shows you the market range.
Step 4: Calculate your minimum profitable rate
Monthly costs ÷ Expected booked nights = Minimum base rate
Example: $3,000 monthly costs ÷ 20 booked nights = $150 minimum base rate
This is your floor. Never price below this consistently or you’re losing money.
Step 5: Set your actual base rate
Take your minimum rate and add 20-40% depending on:
- Your property’s competitive advantages
- Market positioning (budget vs. luxury)
- Current demand levels
This gives you room to offer discounts without going below profitable rates.
Want to understand how your base rate affects overall vacation rental revenue management? Tracking metrics like RevPAR helps you see if your pricing strategy is actually working.
Common Airbnb pricing mistakes
Even experienced hosts make these errors. Avoid them and you’re ahead of most competition.
Mistake 1: Trusting Smart Pricing blindly
Airbnb Smart Pricing optimizes for bookings, not revenue. Using it without setting proper minimum rates or manually overriding peak dates means leaving money on the table.
Fix: If you use Smart Pricing, set a realistic minimum that covers costs plus profit. Override prices manually for peak seasons and local events.
Mistake 2: Pricing based on feelings, not data
“My place is worth $300/night because I spent $50k renovating” doesn’t matter if comparable properties charge $180 and book consistently while yours sits empty.
Fix: Let market data drive decisions. Your property is worth what guests will actually pay, not what you think it should be worth.
Mistake 3: Setting rates and ignoring them
Markets change. New competition opens. Events get scheduled. If you set prices and forget about them for months, you’re missing opportunities and losing bookings.
Fix: Review and adjust rates at least weekly if pricing manually. If you can’t commit to that, invest in dynamic pricing tools.
Mistake 4: Racing to the bottom on price
When bookings slow, the temptation is to undercut everyone. This starts a race to the bottom where everyone loses.
Fix: Before dropping prices, check your listing quality, photos, description, and reviews. Often these need improvement more than price cuts.
Mistake 5: Ignoring the impact of gaps
Three one-night gaps in a month might seem like no big deal. But that’s 3 nights of zero revenue, plus three cleanings (if guests book around them), which cuts into profit significantly.
Fix: Use gap-night discounts and minimum stay rules strategically. Sometimes accepting a 2-night minimum or offering 20% off orphan nights makes more sense than holding out for a theoretical full-price booking.
Mistake 6: Keeping rates the same across all seasons
If your winter rates match your summer rates in a seasonal market, you’re either overpriced in winter or underpriced in summer. Either way, you’re losing money.
Fix: Build a seasonal pricing calendar based on local demand patterns. Most markets have at least 2-3 distinct seasons.
Tools to simplify Airbnb pricing
You don’t have to figure this out alone. These resources help you make better pricing decisions.
Market research tools:
- AirDNA: Shows market data, competitor pricing, and demand forecasts for your area
- Transparent: Provides real-time competitor rate tracking
Dynamic pricing tools:
- PriceLabs: Strong customization options, good for hosts who want control
- Wheelhouse: User-friendly interface, good balance of automation and oversight
- Beyond Pricing: Aggressive revenue optimization, works well in competitive markets
Want a detailed comparison? Check our full guide to Airbnb pricing tools to find the best fit for your needs.
Property management platforms: Most PMS software includes basic pricing features and integrates with dynamic pricing tools. This automates rate updates across your calendar.
Protect your revenue, not just your rates
Getting your Airbnb pricing strategy right is half the battle. The other half is protecting the revenue you’ve earned. Problem guests and property damage don’t just cost money to fix — they force you to block your calendar, which directly destroys your carefully optimized pricing strategy.
A guest causes $4,000 in damage. You need a week to repair it. That’s not just $4,000 in damage costs — it’s also 7 nights of lost bookings during what might have been peak season at $250/night. You just lost $5,750 in total revenue.
Or a party happens. Your neighbors complain. You need to deep clean, repair, and possibly deal with violated house rules. Your property sits empty for days while comparable listings collect revenue you’ll never recover.
Guest screening catches problematic bookings before they happen. Background checks, ID verification, and watchlist monitoring filter out the guests most likely to cause expensive problems. Fewer incidents mean fewer blocked nights and more revenue from your optimized pricing.
Damage protection up to $1M covers you when accidents happen anyway. Reimbursement typically comes within 5 business days instead of you fronting repair costs while fighting with the guest or Airbnb’s resolution center for weeks. Your property gets back online faster, capturing revenue instead of sitting empty.
Optimize pricing, then protect it
Set the right rates, fill your calendar, and make sure problem-free guests keep your property available for bookings. You can’t maximize revenue if you’re constantly taking properties offline for preventable issues.
