• It keeps the nightly prices for your vacation rental competitive as demand in your area changes.
• When Airbnb Smart Pricing is turned on, the price for your holiday home will automatically update: as check-in data approaches (Lead-time), if more people are searching for your holiday home (Market popularity), as you move into or out of high season (Seasonality), if you get a lot of views and bookings (Listing popularity), if you add certain amenities (e.g. WiFi) and as you get more positive reviews.
• Vacation rental owners can set a minimum price and a maximum price to establish boundaries they’re comfortable with.
• Fees (e.g. cleaning fees) are applied to stays in the same way whether Smart Pricing is on or off.
• The goal of Smart Pricing is to increase the chance, that your vacation rental is getting booked on Airbnb.

(Source: via @Airbnb – Get the full story at https://blog.atairbnb.com/smart-pricing/ )