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Guide · UK hosts

Airbnb Smart Pricing: should you use it?

Smart Pricing will probably lower your prices. One study found it still raised hosts’ revenue. Whether it works for you depends on a number it can’t see: your costs. Here’s how it works, how to set it up, and the three settings that matter.

By the PeakRate team. We're UK holiday-let hosts. Facts checked on ; sources are listed at the end.

In short

What Smart Pricing does

Smart Pricing adjusts your nightly price based on demand, within a minimum and maximum you choose. Airbnb says it uses "hundreds of factors about your listing and your area", and that it uses the same factors as its price tips: your location, your amenities, your past bookings and "the latest prices in your area".

Airbnb describes the aim as keeping you "automatically competitively priced for your area". Notice what that doesn't say. Airbnb doesn't claim Smart Pricing maximises your revenue or your profit. Its words are "competitively priced" and "based on demand".

How to turn it on

On desktop, Airbnb's Help Centre gives these steps:

  1. Go to Calendar and choose the listing.
  2. Click Price settings.
  3. Under Base price, click Smart Pricing.
  4. Enter a minimum and maximum price, then save.

To turn it off, follow the same steps and use the toggle. Changing your prices doesn't affect reservations that are already pending or confirmed. You can still set a custom price on single nights in your calendar without switching Smart Pricing off.

What you give up

What the research found

The independent research is American and a few years old, but it points one way.

After hosts switched Smart Pricing onChange
Average nightly priceDown 5.7%
Average daily revenueUp 8.6%

Zhang, Mehta, Singh and Srinivasan, Marketing Science 40(5), 2021. US data.

In plain terms: lower prices, more nights booked, and more revenue on average.

A second study, by Yufeng Huang at the University of Rochester, used San Francisco data. In his model, prices come out lower partly because "the algorithm does not internalize seller costs". In other words, Smart Pricing doesn't know what a night costs you to run.

So the research suggests Smart Pricing tends to trade a lower price for more bookings. Whether that's good for you depends on your costs, which is why the settings matter.

The three settings that decide whether it works

1. Your minimum: set it from your costs

Your minimum is your main guard against Smart Pricing selling a night for less than it costs you (discounts aside: see setting 3). Don't guess it. Add up what a stay costs: cleaning, laundry, energy and Airbnb's fee, plus what a night must earn to be worth having.

Our maths (an illustration for a one-night stay, not a recommendation): cleaning £45 + laundry £12 + energy £10 + the margin you want £13 = £80. Airbnb's 15.5% fee comes out of the price, so divide by 0.845: £80 ÷ 0.845 ≈ £95. That's the minimum, and Airbnb's fee on it is about £15.

Use your own figures. For the fee itself, and the VAT on it if you're not VAT-registered, see our guide to Airbnb's 15.5% host fee.

2. Your maximum: lift it to your best nights

Look at what your competitors charge on a summer Saturday or an event weekend, and set your maximum at least that high. A low maximum quietly caps your best nights.

3. Your discounts: check them

Your discounts apply on top of Smart Pricing's price, and some can take the guest price below the minimum you set.

Our maths: Smart Pricing sets a night at £99, just above a £95 minimum. A 10% early-bird discount brings it to about £89, which is below the minimum you worked out from your costs.

Open your discounts and turn off any you didn't mean to keep. Check weekly, monthly and trip-length discounts too, as Airbnb says they override Smart Pricing.

Check it every couple of weeks

With Smart Pricing on, Airbnb hides its similar listings view, so you have to do the comparison yourself.

  1. Pick a few dates: a weekend, a quiet weeknight and a busy date such as a school holiday or local event.
  2. Search Airbnb for those dates and open the listings a guest would compare with yours.
  3. Note each total for a two-night stay, and put yours next to them.
  4. Adjust the minimum or maximum if Smart Pricing sits well below the others on busy nights, or well above them on quiet ones.

Airbnb's new dynamic pricing

On 30 September 2026, Airbnb announced a new dynamic pricing tool. In Airbnb's words: "We'll recommend a price range, and with one tap, nightly prices adjust automatically." Airbnb says it "starts rolling out in October", that your pricing adjusts daily, and that you can check how competitive your price is with similar listings.

When we checked on 9 October 2026, Airbnb hadn't said whether it replaces Smart Pricing, or when it reaches UK hosts. Smart Pricing's Help Centre article was still live.

So, should you use it?

Thinking about a paid pricing tool instead? Expect to switch Smart Pricing off: PriceLabs' own Airbnb set-up guide says "If Smart Pricing is enabled on Airbnb, turn it off." Our PriceLabs vs Airbnb Smart Pricing comparison covers the differences.

Questions hosts ask

Is Airbnb Smart Pricing worth using?

It can be if you can’t check prices often and you set a proper minimum. A US study found hosts’ daily revenue rose 8.6% on average after switching it on, even though prices fell 5.7%. If you’ll check prices weekly, pricing yourself keeps more control over your best nights.

Does Airbnb Smart Pricing lower your prices?

Usually, according to the research. A 2021 US study found average nightly prices fell 5.7% after hosts switched it on. Another study found prices come out lower partly because the algorithm doesn’t account for hosts’ costs.

Can Airbnb Smart Pricing go below my minimum price?

Yes. Airbnb says weekly, monthly and trip-length discounts override Smart Pricing, and an early-bird discount can take the price below the minimum you set. Check your discounts after you switch it on.

How do I turn on Smart Pricing on Airbnb?

On desktop, go to Calendar, choose the listing, click Price settings, then Smart Pricing under Base price. Enter a minimum and maximum price and save.

Is Airbnb replacing Smart Pricing with dynamic pricing?

Airbnb announced a new dynamic pricing tool on 30 September 2026 and says it starts rolling out in October. As of 9 October 2026 it hasn’t said whether it replaces Smart Pricing or when it reaches UK hosts.

Check it against your real competitors

Smart Pricing doesn’t show you who it compares you with, and with it on Airbnb hides its similar listings view. Checking its prices against your real competitors is the safeguard. You can do it by hand, or let PeakRate do it every night.

Audit your Airbnb listing free Or start your free 14-day trial →

Sources

  1. Airbnb Help Centre, "Use Smart Pricing to automatically adjust your prices based on demand" (article 1168): how it works, minimum and maximum, discounts overriding it, weekend prices, early-bird discounts, rule-sets, set-up steps and temporary switch-off. Read 1 October 2026, re-read 9 October 2026
  2. Airbnb Resource Centre, "Review your price" (article 655, 10 January 2024, updated 14 July 2025): Smart Pricing uses the same factors as price tips
  3. Airbnb Resource Centre, "Using Airbnb pricing tools" (article 707, 9 January 2025, updated 14 July 2025): no price tips or similar listings with Smart Pricing on
  4. Zhang, Mehta, Singh and Srinivasan, Marketing Science 40(5), 2021 (INFORMS release, 12 October 2021): nightly rate down 5.7%, daily revenue up 8.6%. US data
  5. Yufeng Huang, University of Rochester, "Pricing Frictions and Platform Remedies: The Case of Airbnb", working paper, 3 October 2021. San Francisco data
  6. Airbnb Help Centre, article 1857: the 15.5% host-only fee
  7. Airbnb Newsroom, "Airbnb 2026 fall update" (30 September 2026): the dynamic pricing quote
  8. Airbnb Resource Centre, "New tools to host smarter, not harder" (article 776, 30 September 2026): "starts rolling out in October"
  9. PriceLabs, Airbnb set-up guide (read 9 October 2026): turn Smart Pricing off
  10. Our maths: £45 + £12 + £10 + £13 = £80; £80 ÷ 0.845 = £94.67; 15.5% of £95 = £14.73; £99 × 0.9 = £89.10

PeakRate makes pricing and competitor-benchmarking software for hosts. Where this guide mentions it, we say so; everything else is sourced above.