Hacker News new | past | comments | ask | show | jobs | submit login
Beyond Pricing – Automatic Dynamic Pricing for Airbnb (beyondpricing.com)
99 points by JamminJorge on June 10, 2014 | hide | past | web | favorite | 61 comments

Surge pricing for AirBNB, and suddenly we're back to looking our networks for floors to crash on and spare rooms to be had.

I guess the rule of thumb is that even when costs are eroded, profits increased, intermediaries disintermediated... the prices will rise to the maximum levels that the market will bear.

It just takes away the magic of being able to find that rare, cheap and great place. The sharing culture is now less sharing.

> I guess the rule of thumb is that even when costs are eroded, profits increased, intermediaries disintermediated... the prices will rise to the maximum levels that the market will bear.

Price has always been about demand versus supply, not demand versus cost. Reducing costs in situations where supply is constrained by some other factor will just increase profits.

The interesting part of AirBnB, though (imo, of course), has typically been sort of a couchsurfing where you cover some of the offering party's rent in exchange for the accommodation. That occupies a kind of awkward niche between fully-free and fully-commercial accommodations, where there is (or was) some kind of expectation of a relationship to cost: you don't stay free like with Couchsurfing, but the other party isn't trying to run a profit-maximizing hotel, either.

It's true that it's increasingly converging towards becoming a competitor to standard vacation-rental sites like booking.com and HomeAway, though, which come with different expectations.

>Price has always been about demand versus supply

True, but it needs one of the two following conditions:

1. In the long run 2. In a fairly competitive market

Bullshit. Price has not always been about anything. Perception of price has been highly manipulated to fit the goals of sellers. Price has been manipulated to exploit the ignorance of buyers.

Your statement is both myopic and mentally violent with a touch of naivete - price is always an illusion which is modified to fit the actual relationship between buyer and seller.

There are so many instances where the price can actually mean "what the seller is comfortable getting for his product"

Shoot the "market can bear " bs in the face.

This is just the market getting more efficient (better pricing) with an increased supply (hotel + airbnb). It seems like an overall positive thing to me.

On the other side of this argument, from what I've seen on AirBNB, a significant percentage of owners have dramatically overpriced their accommodations. Consequently, widespread adoption of a yield management system like this would lower the prices of many places on many days (while increasing the occupancy rate).

You're absolutely right. We see this all the time, partly because owners don't know what a reasonable occupancy rate is and how they compare to other listings, partly because people have an attachment to their place and overvalue it, and partly because they are only willing to deal with the work of welcoming a guest for a certain price.

How are you determining that they're "overpricing" their accommodations? For a lot of property owners, the reserve price may be driven by considerations like (perceived) risk to their personal property and the hassle of managing bookings rather than the price at which they'll maximize revenue.

I prefer couchsurfing.com anyway. It's an example of the actual sharing economy, and without the grey-area legal shadiness.

This part of couchsurfing (the third auto-suggest result when I start typing couchsurfing into Chrome) is my concern:


The system still works. Women traveling alone have to exercise more caution, but that's true of most activities in life, unfortunately.

The review system on couchsurfing is good. I'm male, so I'm going to have an easier time, but I've never had a problem with couchsurfing. I've stayed with and hosted a few dozen people.

Before I take ANY guest or send a request, I go over their whole profile, their reviews, their photos. Do them seem cool? Do they seem normal, no creepy vibe? Do they have reviews? Do the reviews go beyond "Jack is a nice man. He stayed with me two days."?

If they are "yes" on all counts, not only have they been safe, but they've been among the most interesting people I've met in 28 years on this earth.

Women should heighten scrutiny on all counts, and also check for "do they only host women?". Do they have even a SINGLE negative review or sign of creepy behavior?

Suffice to say, I've met plenty of women travelers who find couchsurfing a great experience, including while traveling alone. I'm not speaking out of male ignorance.

I haven't had any issues with that myself. I'm a straight male though, and so YMMV. If I'm hosting single women, I always make a special effort to be respectful and not do anything that could be construed as hitting on them.

I do know one friend who wound up dating a guy she hosted as a couchsurfer, but I don't know if anything happened when he was staying with her that first time.

Consensual sex concerns you... why?

Concern troll is concerned

Please rethink these types of comments.

They don't do anything to improve Hacker News.

Why can't I down vote the concern troll? Or, why aren't those with the power to down vote able to detect the concern troll? A valid argument was made that couchsurfing.com is an actual sharing economy and AirBnB has stopped being one. The concern troll ignored and derailed the argument.

This comment is much more useful than your grandparent comment. Down voting might be the correct action (if you were able to), but a short meme/snark comment is almost never appreciated.

Thanks for HNplaining to me. The question was rhetorical. I know the answer: this is an echo chamber and AirBnB is precious.

No worries ;)

For what it's worth, I actually agree with your point. The parent of your first comment was (at least to some degree) derailing the conversation. I didn't even consider that it was a derailment until your second comment.

I think you did have something valuable to add to the discussion, but I did not initially see it because your first comment was so pointlessly unnecessary.

Based on you pointing out the behaviour, I will now try to recognise and downvote 'concern trolling' that derails conversations. It's unfortunate that you weren't able to communicate that more effectively the first time.

I suspect a considerable number of price changes will be downward as the date approaches.

AirBnB will probably do this eventually. But BeyondPricing likely has plans far beyond AirBnB.

Higher prices make room for competition.

I am looking for the right word to describe this rather unpleasant strategy that seemed to start with YouTube and now is Über and AirBnb. AirBnB is explicitly or implicitly encouraging people to sublet rooms in breach of their contracts, similar to how YouTube rode on the back of old music videos.

It feels vaguely like the Pikkety rumpus - like a right wing think tank would approve of the "destroy the red tape holdin us back" when mostly it's not red tape, it's someone else's property.

I don't have the right words for the approach - it's hoping we get too big before we get caught.

I use something similar called Smart Host (http://www.smarthost.me). They told me they are supporting about 10 cities right now. It’s not automatic like Beyond, but they give me a bunch of context around their recommendation. Smart Host - The short-term rental price expert. www.smarthost.me

Agree on Smart Host. I really like the flavor they provided about the pricing recommendation I got from them.

I went to a talk at AirBnB and they've already implemented and tested this with their price suggestion. Bit scary to know your entire business hinges on them not opening up a feature to everyone.

We'll soon be cross-platform.

I've been using Beyond Pricing to set the price of my AirBnB for a few weeks now and I'm really happy with it. My increase wasn't anything dramatic -- probably 20% or so -- but it was dead simple to set up and basically free money.

20% increase in income is pretty dramatic :)

Not sure what to make of a pricing product that doesn't show its own pricing without signing up for an account first.

So sorry about that! Somehow it was hidden in the latest push - that's important to know. It will always be free for the first 2 months to prove it works. It's also free during beta. After that, we'll set a monthly price per property that is incredibly, no-brainer reasonable. And we'll always let you cancel at anytime.

Given that you expect people to share their AirBnB login and password, can you specify which locations you actually support prior to us handing this sensitive info over

Yep we need to be a bit more explicit about that. Currently we're only in SF, but that should be changing very soon.

That said, you can preview the prices for a listing without logging in - click the "preview your listing" button on the demo page.

This thread is filled with No True Scotsman (it's not really a sharing economy) and Surge Pricing pitchforks / complaining.

It's supply and demand, like any other business. Airbnb is still awesome - it's a huge step up from hotels and hostels, and outside of the insular tech world it's still far from established. If you think it's too expensive or whatever just don't use it.

I see the value of this type of service in theory - a good anchor point on which to set pricing for AirBNB listings is useful especially when you are first starting up.

Unless you are hoping to run your listing hands-off and full-time (the "always on" instant book-able listing), however, I think that out-sourcing the pricing removes the control you have over differentiating your offering.

It has been my experience that furniture staging, photography, listing reviews/reputation, and the lister's profile all have dramatic impact on the amount you can charge for what is otherwise a very normal apartment. In this highly differentiated environment, it would be hard to model truly optimal pricing.

I imagine that what Beyond, Smart Host, and the like can do first and foremost is help you maximize occupancy, which certainly has the potential to increase your earnings if you are not a high-demand listing.

    Sorry! Pricing is not yet available in Mountain View.
Any plan on making this available in Mountain View?

Hi Adam! Yes, we are rolling out city-by-city in order of number of listings. Mountain View has around 400 active listings, so we should be there in the next month or so! We use a ton of data to derive our prices, rather than creating a generic pricing algorithm without data, so it's just a matter of getting that together and testing in each market.

I think you should indicate earlier that you don't support cities before users go through the process of creating an account only to find out they can't use your service. I understand you want to maximize users and figure out where the demand is the highest, but I think you should at least give users the option to continue creating an account if their city is not currently supported.

I almost exclusively live in AirBnBs these days, and when I'm looking for a new place to stay it will usually take me a few days or possibly a week to check out what's available, message a few people and then choose the one I want. If the prices are changing daily then that would really confuse my way of using the site.

However, a lot of pricing on there does seems to be guesswork, wildly varying, sometimes really cheap and sometimes really expensive. So if this helps enough people to price their property better then that's something I can get behind.

Great to see this on Hacker News! This has been my little secret for pricing my AirBnb the last couple of months! Guess the secret's out now.

Have you guys modeled what this would do to the airbnb economy as a function of how many users actively use your tool?

Not yet... We don't price enough properties yet for it to make a significant change to city wide prices, but hopefully that's a problem we have to deal with.

Is this the beginning of the era of online housing bidding networks? Guess soon we will have Airbnb exchanges...

You mean like this? https://www.vacationfutures.com/

I wish they had this for normal rentals as well...as a landlord I hate having to price everything myself and "guess" at what the actual market value is... :)

I can't see airbnb being happy about this. What cut do you take?

Why would airbnb not be happy about this? They would really only be gaining money as their income is proportional to the owner's income. (Else this product doesn't help anyone, including the owner of the property)

The same reason Craigslist didn't like Padmapper scraping all their listings: The listings bootstrap a competitor who will later try to replace them. Example:

1. Get sellers used to visiting www.beyondpricing.com instead of www.airbnb.com - you don't have any problems attracting sellers, because you can get their listing in front of as many people as airbnb.

2. Add some sort of multi-site listing search or something, to get buyers also visiting you directly instead of going via airbnb. Advertise your site on your sellers' airbnb listings.

3. Once buyers and sellers are used to using your site instead of airbnb, launch your own listings service and cut airbnb out all together. (Or better yet, launch your own listings and only invite the profitable low maintenance buyers and sellers with established histories, leaving the dregs to airbnb)

This allows you to sidestep the problem of "sellers don't want to use us as there are no buyers, buyers don't want to use us because there are no sellers".

This actually seems like something Airbnb would want to acquire. From what I've heard, setting the price is still one of the most painful parts of hosting. Having this available for all users by default would be a huge plus.

Beyond Pricing is free during beta, and then we will charge a reasonable monthly rate per property, similar to other SaaS solutions for vacation rentals. The channels like Airbnb actually love it because it helps maximize revenue across the system, making the pie from which they take a 10% commission on larger.

I'd be careful about assuming the platforms will "love it". AirBnB, in particular, is very sensitive to customer experiences and ever-changing prices are known to be extremely annoying. A delicate balance must be struck.

Maybe there could be an option for "max volatility" or something where an owner would give it a percent and say "Don't change my price by more than x% in y time".

Back to times, where websites that could be plain simple HTML do not work. Not working at all in Firefox 29.0.1. Just a blank page.

(Yes, I know. It works in Safari. But that is not the point.)

Apologies - I'm developing on firefox aurora and haven't had a chance to test it on older versions yet. I honestly wasn't prepared for a HN submission but some more cross browser testing and mobile testing are very high on my todo list.

This is my first project where I've developed with an IE10+ only policy, which is actually really nice because of flex box, but it's easy to accidentally break other browsers if you miss a single prefix.

Any examples of the algorithms these kind of service uses? Or in any other area in which automatic pricing is used.

Thank you very much.

Can you go into your algorithm? Statistical Method?

  We model local demand for each night by modeling hotel prices, flight data, conference attendance & more.
God forbid you could just set what you think is a reasonable price for your rental, and have somebody else come along and think your price is reasonable, too.

Agree. I think the modeling is fine but it always seems to neglect consumer preferences for slower moving prices.

Customer preferences for slower moving prices are just like customer preferences for lower prices. They must be traded off against customer preferences for availability.

If prices didn't move then the market wouldn't clear, and some capacity or demand (at the current price) would be wasted.

I said "slower moving" not "fixed".

You did. Perhaps my last sentence should have read:

If prices didn't move fast enough in response to changes in demand/supply then the market wouldn't clear, and some capacity or demand (at the current price) would be wasted.

Guidelines | FAQ | Support | API | Security | Lists | Bookmarklet | Legal | Apply to YC | Contact