Airbnb's New Top Rated Guest Discount: More Bookings or Less Revenue?

Airbnb continues to roll out new features aimed at improving the guest experience, and one of its latest additions gives hosts another way to attract bookings. The new Top Rated Guest Discount allows eligible guests to receive an additional discount while giving participating listings extra visibility in Airbnb's search results.

At first glance, it sounds like an easy decision. Better guests and more exposure? Who wouldn't want that?

But before you turn it on, it's worth understanding how the discount actually works, and how it could affect your revenue.

What Is the Top Rated Guest Discount?

Hosts can now offer a 15% discount to guests who have consistently demonstrated positive behavior on Airbnb.

To qualify, guests must have:

• At least three reviews from previous hosts

• An average rating of 4.8 stars or higher

  
  

According to Airbnb, listings that enable this promotion may also receive:

• Increased visibility in search results

• A badge highlighting the exclusive offer to eligible guests

  
  

The idea is simple: reward trusted travelers while encouraging hosts to welcome experienced guests.

Why This Matters

Experienced Airbnb guests often make for smoother reservations. They're generally more familiar with house rules, communicate better, and are less likely to cause issues during their stay.

From a guest experience perspective, that's a win.

However, pricing strategies should never be based on occupancy alone. Every new promotion should also be evaluated based on its impact on revenue.

That's where this feature deserves a closer look.

While promotional badges can improve visibility, they're only one part of Airbnb's ranking algorithm. Optimizing your listing for search can help you gain more exposure without relying solely on discounts.

Improve your Airbnb ranking with Rankbreeze → https://171788--remotescale.thrivecart.com/rankbreeze-3-listings-29/

The Hidden Cost of Stacking Discounts

One important detail many hosts may overlook is that the Top Rated Guest Discount can stack with existing Airbnb promotions.

That includes discounts such as:

• Weekly discounts

• Monthly discounts

• Early bird discounts

• Last-minute discounts

• Custom promotions

  
  

Individually, each discount may seem reasonable. Combined, they can significantly reduce your nightly rate.

Here's an Example

Imagine your nightly rate is $400.

You decide to run a 20% Custom Promotion to increase bookings during a slower week.

Without the new feature:

• Original nightly rate: $400

• 20% promotion: $80

• Guest pays: $320

  
  

Now suppose the guest also qualifies for Airbnb's new Top Rated Guest Discount.

Airbnb applies an additional 15% discount to the already discounted rate.

The calculation becomes:

• Promotional rate: $320

• Additional 15% discount: $48

• Final nightly rate: $272

  
  

Although your intention was to offer a 20% discount, the guest is now paying 32% less than your original rate.

It Can Add Up Quickly

The impact becomes even greater when longer-stay discounts are involved.

Using the same example:

• Original nightly rate: $400

• After 20% Custom Promotion: $320

• After 15% Top Rated Guest Discount: $272

• After a 10% Weekly Discount: $244.80

  
  

Your effective nightly rate falls from $400 to $244.80.

That's a total reduction of 38.8%.

For a seven-night reservation:

• Original revenue: $2,800

• Revenue after discounts: $1,713.60

  
  

Difference: $1,086.40

While discounted bookings can certainly fill your calendar, it's important to ask whether that reservation required such a significant price reduction in the first place.

When This Feature Makes Sense

Like most Airbnb tools, there isn't a universal answer.

For some listings, the added visibility could easily offset the lower nightly rate.

We see the greatest potential for:

• New listings looking to build booking momentum

• Properties experiencing slower seasons

• Markets with higher competition

• Listings needing additional search visibility

  
  

In these situations, sacrificing some ADR may lead to stronger occupancy and improved overall revenue.

When We'd Be More Cautious

Hosts with already successful pricing strategies should evaluate the feature more carefully.

We recommend taking a closer look if your property:

• Consistently maintains high occupancy

• Performs well during peak season

• Already uses multiple Airbnb promotions

• Relies on dynamic pricing software like PriceLabs or Wheelhouse

  
  

If your calendar is already filling without additional discounts, reducing your rates further may simply decrease revenue rather than generate new demand.

Don't Measure Occupancy Alone

It's easy to focus on booking more nights, but successful revenue management looks beyond occupancy.

If you decide to enable the Top Rated Guest Discount, keep an eye on:

• Occupancy rate

• Average Daily Rate (ADR)

• Revenue Per Available Night (RevPAR)

• Booking conversion rate

• Total monthly revenue

  
  

Sometimes a lower nightly rate results in higher overall earnings. Other times, it simply means leaving money on the table.

Instead of relying on occupancy alone, tools like PriceLabs help you analyze pricing trends, automate dynamic rates, and make data-driven decisions that maximize both occupancy and profitability.

See how PriceLabs can optimize your pricing strategy → https://pricelabs.co/users/sign_up?referral=fIJaHg

Our Take

At CoStay Solutions, we view Airbnb's new Top Rated Guest Discount as another tool, not a setting that should automatically be enabled for every property.

The feature has clear advantages. Higher-quality guests and additional search visibility can absolutely create value under the right market conditions.

However, understanding how the discount interacts with your existing pricing strategy is essential before turning it on.

Every property performs differently, and the best pricing decisions are driven by data, not assumptions.

As we continue testing this feature across different markets and property types, we'll be watching one thing above all else:

Not whether it generates more bookings, but whether it generates more profitable bookings.

Until Next Time, Happy hosting!