Why I Create Airbnb Discounts Inside Airbnb, Not PriceLabs

A host asked a question in our Facebook group yesterday, and it got me thinking.

The question was about PriceLabs and discounts. If PriceLabs is already adjusting your rates, should you also create your discounts there? Should you do it through your PMS? Or should you create the discount directly inside Airbnb?

My preference is to create the actual discount inside Airbnb.

That does not mean I do not want PriceLabs adjusting the price. I do. The whole reason I use a dynamic pricing tool is because I want the underlying rate to fluctuate with demand, booking pace, seasonality, events, lead time, and everything else happening in the market.

But I see the Airbnb discount as something extra.

PriceLabs manages the underlying rate. Airbnb manages the promotion on top of it.

Those are two different things.

A Lower Price Is Not Necessarily a Discount

Let’s say PriceLabs has a night priced at $250.

If I decide I want to sell that night for $225 and simply lower the rate through PriceLabs or my PMS, Airbnb receives a $225 rate. To the guest, that may simply look like the normal price of the property.

They do not necessarily know that it was previously $250. There is no reason for them to perceive that $225 as a special opportunity. It is simply another price in the search results.

But if I keep the underlying rate and create an eligible discount directly inside Airbnb, Airbnb can potentially do something with that information.

Depending on the type of promotion, the listing, and Airbnb’s current eligibility requirements, the platform may show a crossed-out price, highlight the reduction, or otherwise make the discount visible to the guest.

That is the difference I care about.

If I am going to give the guest a discount anyway, I would rather give Airbnb the opportunity to show them that they are getting one.

I Still Want PriceLabs to Move the Price

I do not want to replace dynamic pricing with Airbnb discounts.

I want both.

Maybe PriceLabs has Tuesday at $230 today. Demand changes and tomorrow it moves the night to $245. A few days later the market softens and the price moves again.

That is exactly what dynamic pricing is supposed to do.

I want the underlying price to continue moving based on the market. Then, when I decide I want an additional incentive for the Airbnb guest, I can place a discount on top of that rate.

This is why I do not think of the two systems as competing with each other.

PriceLabs is managing the value of the night.

Airbnb is helping me present an offer.

Sometimes PriceLabs Pushes the Price Higher Than You Expect

There is another side to this that came up in the discussion.

Sometimes a host looks at the PriceLabs rate and thinks, “There is no way someone is paying that.”

And sometimes the host may be right.

PriceLabs is working from data. It can see market behavior, demand, booking patterns, events, seasonality, and comparable listings. That is extremely useful.

But it does not know your property the way you do.

Maybe your home is in a slightly weaker location than the comparable properties. Maybe the interior is more dated. Maybe parking is difficult. Maybe there is construction nearby. Maybe an amenity is temporarily unavailable. Maybe there is simply something about the property that affects perceived value but is difficult for pricing software to understand.

That is why I always tell hosts to set their minimum and maximum prices at levels they are actually comfortable with.

You know your property better than PriceLabs does.

PriceLabs knows the data better than you do.

The goal is to use both.

Your Minimum and Maximum Are Your Guardrails

I do not believe in handing complete control of pricing to software.

If there is a number below which you are not comfortable accepting a reservation, your minimum should reflect that.

If there is a number that you genuinely believe your property cannot justify, your maximum should reflect that as well.

The idea is to give PriceLabs enough room to respond to the market without allowing it to move your rates into territory you are uncomfortable with.

That also makes your discount strategy much easier.

If the underlying PriceLabs rate already exists inside a range you are comfortable with, you can then decide whether a separate Airbnb promotion makes sense without constantly fighting the pricing software.

A Bigger Last-Minute Discount Is Not Always a Bad Thing

This is where I differ from people who look at a 20% or 25% discount and immediately assume it is too aggressive.

You cannot judge the discount without looking at the price it is coming from.

Suppose PriceLabs has pushed a night to $350.

The date is now three days away, and based on your knowledge of the property and the market, you would be very happy to receive $275 for that night.

In that situation, I do not have a problem using a larger last-minute Airbnb discount to bring the final guest price closer to where I want it.

That is completely different from taking an already-low $220 rate and discounting it another 25%.

The discount percentage by itself does not tell you whether the pricing decision is good or bad.

The final guest price is what matters.

Look at the Final Number, Not Just the Percentage

Hosts sometimes become uncomfortable when they see a large percentage attached to a promotion.

But 25% off an aggressive dynamic rate may still produce an excellent nightly rate.

At the same time, 10% off an already-underpriced night can be a poor decision.

So I would rather work backwards.

What will the guest actually pay?

Does that price make sense for this property?

Does it make sense for these dates?

How close are we to check-in?

What is the market doing?

Would I be happy to receive a reservation at that final price?

If the answer is yes, I care much less about whether the discount happens to say 10%, 20%, or 25%.

But Constant Large Discounts Are a Sign to Check Your Settings

There is an important exception.

If you are constantly applying 20%, 25%, or 30% discounts simply to get PriceLabs back down to what you consider a realistic rate, then I would not keep solving that problem with Airbnb promotions.

I would go back into PriceLabs.

Your base price may need work. Your maximum may be too high. Your seasonal settings may be too aggressive. Your comparable listings may not represent the property correctly.

A native Airbnb discount should be an additional pricing lever.

It should not become a permanent correction for a PriceLabs setup you do not trust.

PriceLabs Is a Tool, Not the Final Authority

This is probably the bigger lesson.

Dynamic pricing does not eliminate the need for the host to think.

PriceLabs can process far more market data than most of us could ever analyze manually. That is its strength.

But there will always be information you have that the software does not.

You know the actual condition of the home. You know its weaknesses. You know what guests mention. You know whether the photos make the property look better or worse than it does in person. You know whether a local event really drives demand for your type of property or simply creates a lot of noise in the market.

All of that belongs in the pricing decision.

So I would never look at a PriceLabs rate and say, “The software says $300, therefore the property is worth $300.”

PriceLabs gives me information and automation.

I still make the decision.

Why I Want the Discount Inside Airbnb

Once I decide that I am willing to discount the stay, I prefer giving Airbnb the promotion whenever possible because Airbnb controls the storefront.

It controls what the guest sees in search. It controls how prices are presented. It controls which native promotions receive additional treatment and when crossed-out pricing or other promotional elements appear.

That is valuable.

If I reduce the rate entirely through an external system, Airbnb may simply receive a lower number.

If I create an eligible promotion inside Airbnb, I am giving the platform more information: this is my normal dynamic rate, and this is an additional offer I am making to the guest.

If Airbnb wants to highlight that offer, I want to give it the opportunity to do so.

This Does Not Mean Artificially Inflating Your Rates

I also want to be very clear about what I am not suggesting.

I am not saying to raise your PriceLabs rates just so you can create a fake 30% discount.

Your underlying price still has to make sense.

It should reflect your property, your market, your booking window, the season, your pacing, your comparable listings, and what guests are realistically willing to pay.

The strategy is not to inflate the price and then pretend to discount it.

The strategy is to let dynamic pricing establish a reasonable underlying rate and then use Airbnb’s native discount tools as an additional layer when there is a legitimate reason to offer one.

How I Prefer to Set It Up

For me, the roles are very clear.

PriceLabs manages the underlying dynamic rate. I let it react to demand and move prices as the market changes.

I set the minimum and maximum. Those are my guardrails because I know the property and what I am comfortable accepting.

My PMS handles synchronization. It keeps the operation connected across the different channels.

Airbnb handles the additional Airbnb discount. When I want to create a promotion for an Airbnb guest, I would rather create it where the guest is actually shopping.

That gives me dynamic pricing without giving up control, and it gives Airbnb the chance to actually merchandise the discount.

That is ultimately why I prefer this approach.

I am not choosing between PriceLabs and Airbnb discounts.

I am using each one for a different job.