Airbnb aims to boost home stays with 'Price Tips' tool
The peer-to-peer home rental site rolls out a new tool that gives hosts recommendations on how to price their home each day of the year.
SAN FRANCISCO -- Airbnb wants to help its users become better businesspeople. The peer-to-peer home rental marketplace announced Thursday that it's launching a tool designed to help hosts best decide what price to list their homes on the site.
The new feature is called Price Tips and the idea is to give Airbnb hosts pricing recommendations for each day of the year. Airbnb hopes the tool will help hosts rent out their homes on a more regular and frequent basis. This means not only more money for hosts, but also for Airbnb since it gets between 9 percent and 15 percent of the cost of each rental.
"Pricing has always been a huge challenge for our hosts," Mike Curtis, Airbnb's vice president of engineering, said during the company's OpenAir conference in San Francisco on Thursday. "A lot of cases, it's somebody typing in a number and hoping for the best."
Since Airbnb was founded in 2008, the company has gone from a service that catered to couch surfers to having a massive online presence with more than a million listings and hosts in nearly 200 countries. On any given night, tens of thousands of people are using Airbnb and paying to stay in the homes of strangers.
The company has impressed investors with its potential. Airbnb has raised about $800 million, making it one of the Top 10 highest-valued venture-backed companies in the world, with a valuation of $10 billion.
To figure out better home pricing, Airbnb's new Price Tips tool looks at demand, travel trends and type of house at any given location. Now when hosts look at their calendar on the site, they'll see personalized color-coded days and a slider tool showing what price to list their home on each day of the year. The recommendations are updated daily based on Airbnb's latest available data.
"If you have an apartment listed in San Francisco, it could be worth twice as much when Dream Force is in town and everything is booked out," said Curtis. "Similarly, it could be less when it's foggy and cold."
Curtis said initial testing of the tool shows that if hosts price their homes within 5 percent of Airbnb's recommendation, they're four times as likely to book out their home on that day. The tool is available immediately.
Along with Price Tips, Airbnb also announced Gift Cards on Thursday. Gift Cards let people give Airbnb stays as a gift.