All startups should be looking at their form conversion rates and tracking abandonment at the field level to find usability issues like this to fix. Even though AirBnB has helped the host set an initial price, the biggest area of opportunity is dynamic pricing that adjusts based on forecasted demand.
I saw that one company was tackling this by trying to use local hotel pricing as a proxy of demand and then tune prices for hosts to maximize revenue.
I wonder if AirBnB is trying to maximize occupancy or revenue when they suggest a price point for hosts?
The article has a good example: Airbnb used this to figure out that hosts where abandoning their sign-up flow because they didn't know what to charge. So, they gave hosts a suggested price to increase completions.
I have 14 properties. I have never seen Airbnb predict anything other than $99. None of my places list for less than twice that.
When you have filled out that they get a 3 bed, 3.5 bath 2800 square foot home, furnished, all to themselves with utilities included, $99 a night is way off. You can't rent a home in any market furnished with utilities for that price. (yes someone will point to a cozy place in North Dakota that is that price) so I'll also specify, Walking distance to a Bowl Game stadium, nations top 10 night life neighborhoods, and with a 2 car garage.
Yes. Putting a "default" price there probably helps. But their predictive algo, sucks, and they shouldn't be bragging about it.
I bet it intentionally lowballs so you're then forced to enter a value that makes sense. Correcting a bad estimate will probably be psychologically easier than coming up with it from scratch.
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[ 4.7 ms ] story [ 32.7 ms ] threadI saw that one company was tackling this by trying to use local hotel pricing as a proxy of demand and then tune prices for hosts to maximize revenue.
I wonder if AirBnB is trying to maximize occupancy or revenue when they suggest a price point for hosts?
For reference's sake, here's the article it links to: http://www.fastcompany.com/3026550/lessons-learned/how-airbn...
https://gist.github.com/arnklint/4247137
When you have filled out that they get a 3 bed, 3.5 bath 2800 square foot home, furnished, all to themselves with utilities included, $99 a night is way off. You can't rent a home in any market furnished with utilities for that price. (yes someone will point to a cozy place in North Dakota that is that price) so I'll also specify, Walking distance to a Bowl Game stadium, nations top 10 night life neighborhoods, and with a 2 car garage.
Yes. Putting a "default" price there probably helps. But their predictive algo, sucks, and they shouldn't be bragging about it.