Factors influencing prices on accommodation sharing platforms: The effects of host’s experience and market demand

Francesca Magno, Fabio Cassia, Marta Ugolini

Abstract


Purpose. Accommodation sharing is one of the major trends shaping the hospitality industry and Airbnb is the most prominent sharing platform driving this growth. Previous studies have shown that Airbnb accommodations are successful because they are perceived by tourists as outperforming budget hotels/motels’ service quality while being less expensive. Hence, perceived price convenience is one of the main strengths of Airbnb accommodations. Only a few studies have examined the determinants of these prices and they have provided a static view, thus overlooking the evolution of prices over time. The purpose of this study is to fill this gap by considering the impact of the changes in the level of a host’s accumulated experience and the effect of the variations in the level of market demand.

Methodology. Data from all Airbnb listings for accommodations available in the city of Verona on four booking dates in 2016 were collected and analysed through regression analysis.

Findings. The results highlight that price is significantly related to the level of a host’s accumulated experience and to the level of market demand on a specific booking date. The findings also provide support for the effects of several other determinants suggested by previous studies.

Practical implications. This study may assist hosts in setting the prices for their accommodations. Other stakeholders affected by the rise of accommodation sharing may benefit from the in-depth understanding of pricing dynamics on accommodation sharing platforms.

Originality/value. This is one of the few studies that have addressed factors influencing prices on accommodation sharing platforms and, to our knowledge, the first to consider the effects of variations in host’s experience and in market demand.

Keywords


Sharing economy; Airbnb; pricing; hospitality; online reviews; tourism

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