Here's a tool to help Airbnb hosts optimize pricing, better their profit margins

3rd Dec 2014
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Airbnb took the simple concept of the bed and breakfast and created a revolution around it, empowering both hosts and travellers looking for a place to stay on short-term basis. According to Co-founder, Brian Chesky, the success of Airbnb can be attributed to the amazing work culture at the core of the company, among other things.

One of the minor problems some Airbnb hosts face is having vacant rooms during the lean periods; hence losses. This could be because the hosts do not know what would be a competitive price in the market on a given day and would stick with their fixed prices. PriceLabs has come out with a solution for this issue:

What is PriceLabs?

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PriceLabs is a Chicago-based startup by Indian founders, who recently launched their global cloud-based pricing optimisation tool for Airbnb hosts, after a successful beta test run. The founding team has years of experience in revenue management, operations and product development, and are self-funded.

The tool helps Airbnb hosts by calculating the optimum price for any night for their listing, which results in decreased vacant nights and increased profits. They have already helped many Airbnb hosts in Chicago increase their profits for the last six months, and are now opening service to hosts globally.


Related read: What is happening at Airbnb India?


They’re starting off by providing a tool to rental entrepreneurs in short-term rental market to increase their income. They claim to be the first company to launch a global pricing platform.

The technology behind it

PriceLabs brings together data sets for supply and demand in the short-term rental market by pulling information from various sources. Once the data is aggregated, they employ supervised machine learning on the data set, which works on an adaptive learning algorithm.

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Business model

They are focused on building awareness about PriceLabs and pricing optimisation, in general, with Airbnb hosts. To that effect, they’re offering two months of free service for those who sign-up before December 31st 2014, to try out the tool and see it in action. In the long run, they’ll switch to a subscription model, but are still finalising the exact method.

Other use cases of this technology

Pricing optimisation is essentially balancing supply and demand. So any market where there is significant volatility in supply and demand can be made efficient by pricing optimisation. Airlines and large hotel chains have been using it for years. E-commerce sites like Amazon use it to price their products; in fact, US/ India-based startup Boomerang Commerce raised money earlier this year to optimise prices for various e-commerce sites.

Beta testing and India strategy

Most of their beta testing insights were around how they could better the algorithm. On the marketing side in India, their focus will be on Delhi and Mumbai as these cities are witnessing traction. Since they’re building a global tool, so people in most big cities around the world will have access to it. They’re also interested in partnering with India based marketplaces that have inventory similar to Airbnb.

Website : PriceLabs

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