PriceLabs algorithm considers a number of factors – some inputs and settings that you can control, and their data-driven analytics layered on top of it. When you review prices for a listing for the first time, PriceLabs will estimate a base price for the listing for you based on its attributes and current performance. PriceLabs then applies historic demand trends (seasonal, weekend vs. weekday), future looking supply and demand data (occupancy levels and prices for vacation rentals and hotels for future dates), and how far a date is (last minute discounting, far our premium, etc.). Reducing or increasing the base price will reduce or increase the price recommendations.
In addition, you can also set your own lowest price, highest price, last minute discount/premium customization, as well as date specific overrides (for example, to further increase prices for New Year’s eve by 20%). You can read about their pricing algorithm in more detail in their Revenue Management Starter Kit, and the details of their default discounts and premiums.