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Why Hosts Should Think Twice About Lowering Their Airbnb Prices
If you’re an Airbnb host looking to attract more guests, lowering your prices can seem like a quick fix. After all, a competitive rate often catches attention, especially in competitive markets. But before you discount too steeply, consider the potential downsides. Here’s why setting prices too low can backfire—and why a higher price often leads to better reviews, higher-quality guests, and long-term success.
1. High Expectations Despite Lower Rates
One common misconception is that guests paying less will have lower expectations. In reality, guests who book budget accommodations may still expect high-quality service and amenities. When these expectations aren’t met, it often leads to lower reviews. These guests may have chosen your listing as a “steal” expecting value far beyond what they’re paying, Which can create an “expectation gap”. If the experience doesn’t exceed their ideal, even at a discounted rate, they’re more likely to leave lower reviews that can impact your listing’s appeal.
2. Price Sensitivity and Scrutiny
Guests looking for budget accommodations are often extremely value-conscious, examining every detail to make sure they’re getting the most for their money. They might be quicker to notice and comment on small issues that guests at higher price points would overlook. Something as minor as an unexpected fee, a small maintenance issue, or a less-than-perfect check-in experience can lead to a lower review, as budget-conscious guests may feel that every penny should bring added value.
3. Discounts and Bargain Mentality
Lowering prices too much often attracts guests looking for “deals” rather than an overall experience. These guests may be comparing your property to high-end or luxury listings at discounted rates, which can create unrealistic expectations. If the guest perceives that they aren’t getting the level of service or amenities they imagined, they may feel justified in giving a lower rating, even if the price is low. In contrast, guests willing to pay higher rates are often seeking a quality experience rather than the cheapest option, which can lead to more appreciative, positive reviews.
4. Quality of Guests and Long-Term Sustainability
Low prices can sometimes attract guests who may be less respectful of your property. The “bargain mindset” can mean they’re less invested in the property and less likely to follow house rules, leading to increased maintenance costs or issues with neighbors. Conversely, guests paying a premium are often more invested in their stay, respect the property, and feel a commitment to the quality experience they’re paying for. This results in not only better reviews but also a smoother hosting experience with fewer issues.
5. The Value Perception Factor
Pricing plays a big role in how guests perceive the quality of a listing. A low price can sometimes create a “too good to be true” impression, where guests are more cautious and scrutinize details. Higher prices, on the other hand, signal value and quality, leading guests to expect and appreciate a premium experience. By pricing your property competitively yet realistically, you’re more likely to attract guests who value your listing and leave positive feedback.
How to Avoid the Pitfalls of Over-Discounting
Instead of setting prices too low, consider alternatives that can help attract high-quality guests without sacrificing your rating:
Highlight Unique Selling Points
Emphasize what makes your property unique, such as a great location, stylish decor, or extra amenities.
Seasonal Discounts or Promotions
Rather than a blanket discount, offer seasonal rates or limited-time deals. This approach allows you to maintain a higher price overall.
Add-On Services
Consider offering paid extras, such as early check-in, late check-out, or guided local experiences, to appeal to guests willing to invest a bit more.
Final Thoughts
While lowering prices can feel like an easy way to attract bookings, it’s often a short-term solution that doesn’t pay off in the long run. By maintaining a balanced, competitive rate, you’re more likely to attract guests who value the experience and leave positive reviews—ultimately enhancing your Airbnb ranking, guest loyalty, and hosting success.