One of the most common questions I hear from new Airbnb hosts is:“Should I use Airbnb’s Smart Pricing, or should I set my own rates?”
Over my 5 years of Airbnb hosting, I’ve mostly set my own rates. But recently, I decided to test out Airbnb’s Smart Pricing feature for three months. The results surprised me — in a good way.
How Airbnb Smart Pricing Works
When you enable Smart Pricing, Airbnb asks you to set a minimum and maximum nightly rate. Then, the platform automatically adjusts your pricing depending on:
- Local demand in your area
- Seasonality (weekends, holidays, special events)
- How similar listings are priced nearby
In theory, this helps you keep your calendar full without constantly updating your rates.
What People Say Online
If you Google “Airbnb Smart Pricing” (or even ask ChatGPT 😉), you’ll usually see warnings that Smart Pricing prioritizes occupancy over revenue. And honestly, that’s true — Airbnb’s algorithm doesn’t always know the difference between a luxury two-bedroom condo and a budget basement suite.
But here’s the thing: there are some nuances you can only discover by actually testing Smart Pricing yourself. That’s exactly what I found over the past three months.
My 3-Month Smart Pricing Experiment
Here’s what stood out for me:
✨ Higher rates for advance bookings
For guests booking more than a month in advance, Smart Pricing pushed rates close to the top of my range. For my test property (a 2-bedroom unit), I set the range at $85–$150/night. Most advance bookings landed between $130–$149/night — which was great.
✨ Lower rates for last-minute bookings
For same-day or near-term bookings, Smart Pricing leaned toward the low end of my range (around $85–$95/night).
✨ It evens out in the end
Looking back at the month as a whole, Smart Pricing balanced things out. For that 2-bedroom listing, I averaged $110/night at 90% occupancy, which brought in about $3,000 in an off-peak month. For a brand-new listing, that’s not bad at all.
✨ Time saver for property managers
Before Smart Pricing, I spent hours researching competitors’ listings to adjust nightly rates. But as I started managing multiple properties for clients, that became harder to keep up with. Smart Pricing has been a real time-saver, especially as a short term rental property manager.
My Recommendation for Other Airbnb Hosts
Here’s where I disagree a bit with the common advice online. Most people say Smart Pricing is best for beginners. Based on my experience, I’d say the opposite.
👉 If you’re new, start by setting your own rates.
This forces you to research competitors and learn what guests are willing to pay in your area. That knowledge is invaluable.
👉 Once you’ve got a feel for your market, then try Smart Pricing.
When you know your numbers, you can confidently set your minimum and maximum rates — instead of just guessing.
That way, you get the best of both worlds: data-driven insight from your own research, and automation that saves you time.
Final Takeaway
Airbnb Smart Pricing isn’t perfect, but it can be a powerful tool when used strategically — especially if you already understand your market.
And if you’d rather skip the trial-and-error and have someone optimize your pricing (and your entire hosting setup) for you, that’s exactly what we do at CoHostsCircle.
We specialize in Airbnb property management and short term rental property management, helping homeowners and investors maximize profit while minimizing stress.
👉 Don’t leave money on the table. Work with a professional property manager and make your Airbnb work smarter, not harder.