Vacation season is here for many Americans, and Airbnb hopes to give them the absolute best experience in a new city while hosts make the most bang for their buck.
At its OpenAir Conference in San Francisco June 4, Airbnb announced a new price modeling tool that will help hosts gauge the appropriate price for their space based on demand for the region. With the summer season on the horizon, it’s only appropriate that the company launch this offering now.
Just like hotels scale their prices based on the demand for that particular night, Airbnb is helping their hosts rake in the dough offering price points on a day-to-day basis.
Price Tips uses big data from the company’s new open-source “Aerosolve” machine learning tool. The data used has already been available to Airbnb, but this new offering is presenting it in a way that makes it easy to use and profitable.
The Airbnb website states: “We have been operating on the belief that enabling humans to partner with a machine in a symbiotic way exceeds the capabilities of humans or machines alone.”
The incredibly complex and dynamic pricing feature breaks down data in a way that makes it easy to understand by humans by creating wide models with variable combinations to hone in on specific patterns and trends.
Then, based on the time of the year, exact location of the listing and other listings in the area, hosts will be able to perfectly gauge the appropriate price to charge.
Using the Aerosolve tools, Price Tips are offered to hosts in the form of an easy-to-understand calendar feature. According to Airbnb VP of Engineering Mike Curtis, a property is four times more likely to be booked if the price is set within 5 percent of the recommendation.
“Being in Wine Country and having managed an actual bed-and-breakfast, we work our pricing around the bed-and-breakfast and hotel rates in the area. The only real fluctuation comes from high season and low season, and otherwise stays consistent,” said Samantha Mahoney, who manages the booking of an Airbnb venue.
Once it’s fully released, hosts will have access to the calendar, which uses a simple color scheme to determine the best prices. At a glance, hosts will see that any dates shaded in green are considered to be listed as “just right.”
If a price is too high, it glares in red. A simple slider shifts the prices so that hosts can find the perfect point.
“This tool is something I think we can absolutely benefit from. It would be so helpful to have that information at our fingertips instead of comparing our prices to other Airbnb units in the area and market pricing for hotels and B&Bs in the area,” Mahoney said.
The data are updated every single day and are based on hundreds of signals that are integrated into the model to ensure that Airbnb hosts can offer the best price.
Because, after all, Airbnb makes money when its hosts make money.
There’s no specific date yet made available on which all Airbnb hosts will have access to the Price Tips information.
Airbnb did not respond to requests for comments by press time.