"If you've meticulously set up weekly, last-minute, and early-bird discounts on Airbnb, you’ve likely assumed they work together to attract the widest range of guests; however, the truth is that they are actively competing in a hidden battle where only one can win, and it may not be the one that earns you the booking."

Inside Airbnb’s Promotion Logic: The Priority Over Stacking Rule

 

Previously, we have written about the stacking logic of various OTAs, here
How promotion logic of each OTAs works and here How promotion logic of each OTAs Works Cont
 

Today, we're diving deep into a platform that does things a little differently: Airbnb. Understanding how promotions are applied on Airbnb is crucial for a successful revenue strategy, as its logic deviates from other channels.

It all comes down to two main categories of discounts and a clear "priority" system.

 

The Two Categories of Airbnb Discounts

 

Referring to the logic table provided by Airbnb, we can see two distinct groups of promotions.

 

Category 1: Prioritized Promotions (Non-Stackable Among Themselves)

This group includes the most common discounts you might set up. A key rule to remember is that if multiple promotions from this list are valid for the same date, only one will be applied per night. The one that gets applied is determined by a priority order.

• New Listing Promotion: A 20% discount for your first three bookings.
• Custom Discounts: A promotion you create for specific dates once you have at least three bookings.
• Length-of-Stay (LOS) Discounts: Discounts for weekly, monthly, or custom time frames.
• Early-Bird Discount: For reservations made 1-24 months in advance.
• Last-Minute Discount: For bookings made close to check-in, from 0-28 days out.

 

Category 2: Stackable Adjustments

 

These two powerful tools work differently. They will "stack" on top of whichever discount from Category 1 is active, or on top of the base price if no other promotion is applied.

• Seasonal Adjustment (Rule Sets): Custom pricing rules for specific date ranges, often used to increase or decrease rates based on demand. Once applied, these will override existing nightly prices.
• Non-Refundable Discount: A discount (typically 10%) offered to guests in exchange for a stricter, non-refundable cancellation policy.

 

The Core Logic: Priority Over Stacking

 

For the promotions in Category 1, Airbnb uses a "discount application priority" system to decide which one to use if a booking qualifies for more than one. The hierarchy is as follows:

 

1. New Listing Promotion (Highest Priority)
2. Custom Discounts
3. Length-of-Stay Discounts
4. Early-Bird Discount
5. Last-Minute Discount (Lowest Priority)

 

Real-World Examples

Let's break this down with a couple of clear examples.

Example 1: Length-of-Stay vs. Early-Bird

Imagine you have set up the following discounts for your property:

• An Early-Bird Discount of 30% for bookings made 2 months in advance.
• A 7-day Length-of-Stay (LOS) Discount of 20%.

 

A guest searches for a 7-night stay that is three months away. Although the booking qualifies for both the Early-Bird and LOS discounts, the guest will only receive the 20% LOS discount. This is because Length-of-Stay discounts have a higher priority (level 3) than Early-Bird discounts (level 4). The 30% Early-Bird discount will be ignored for this booking.

 

Example 2: Putting It All Together (Stacking in Action)

Now, let's see how a Category 2 adjustment works with a Category 1 promotion, based on Airbnb's own calculation model.

• Base Nightly Rate: $200
• Active Discounts:
  • A Seasonal Adjustment (Rule Set) that increases the price by 10% for a peak weekend.
  • A monthly (30-day) LOS Discount of 25%.
  • An Early-Bird Discount of 30%.

 

Here’s how the final price is calculated:

1. Apply the Stackable Adjustment First: The Seasonal Adjustment is applied to the base rate.
   • $200 + 10% increase = $210.
2. Determine the Winning Promotion: The booking qualifies for both the monthly LOS and Early-Bird discounts. Since the LOS discount has higher priority, the 25% discount is chosen.
3. Calculate the Final Price: The winning 25% discount is applied to the seasonally-adjusted price.
   • $210 - 25% discount = $157.50 per night.

 

In this scenario, the 30% Early-Bird discount is not applied, and the guest will not see it. The final price reflects the base rate, the seasonal price hike, and the highest-priority standard promotion.