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Use of dynamic pricing strategies by Airbnb hosts

Use of dynamic pricing strategies by Airbnb hosts PurposeThe purpose of this paper is to provide a comprehensive analysis of dynamic pricing by Airbnb hosts.Design/methodology/approachThis study uses attribute and sales information from 39,837 Airbnb listings and hotel data from 1,025 hotels across five markets to test different hypotheses which explore the extent to which Airbnb hosts use dynamic pricing and how their pricing strategies compare to those of hotels.FindingsAirbnb is a unique and complex platform in terms of dynamic pricing where hosts make limited use of dynamic pricing strategies, especially as compared to hotels. Notwithstanding their limited use, hosts who own listings in high-demand leisure markets, manage entire places, manage more listings and have more experience vary prices the most.Practical implicationsThis study identified a great need for Airbnb to encourage dynamic pricing among its hosts, but also warned of the potential perils of dynamic pricing in the sharing economy context. The findings also demonstrated challenges for hotel managers interested in actionable information related to Airbnb as a competitor.Originality/valueThis is the first Airbnb study to use a comprehensive set of data over a continuous period in multiple markets to look at a number of listing and host factors and determine their relation with dynamic pricing strategies. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png International Journal of Contemporary Hospitality Management Emerald Publishing

Use of dynamic pricing strategies by Airbnb hosts

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Publisher
Emerald Publishing
Copyright
Copyright © Emerald Group Publishing Limited
ISSN
0959-6119
DOI
10.1108/IJCHM-09-2016-0540
Publisher site
See Article on Publisher Site

Abstract

PurposeThe purpose of this paper is to provide a comprehensive analysis of dynamic pricing by Airbnb hosts.Design/methodology/approachThis study uses attribute and sales information from 39,837 Airbnb listings and hotel data from 1,025 hotels across five markets to test different hypotheses which explore the extent to which Airbnb hosts use dynamic pricing and how their pricing strategies compare to those of hotels.FindingsAirbnb is a unique and complex platform in terms of dynamic pricing where hosts make limited use of dynamic pricing strategies, especially as compared to hotels. Notwithstanding their limited use, hosts who own listings in high-demand leisure markets, manage entire places, manage more listings and have more experience vary prices the most.Practical implicationsThis study identified a great need for Airbnb to encourage dynamic pricing among its hosts, but also warned of the potential perils of dynamic pricing in the sharing economy context. The findings also demonstrated challenges for hotel managers interested in actionable information related to Airbnb as a competitor.Originality/valueThis is the first Airbnb study to use a comprehensive set of data over a continuous period in multiple markets to look at a number of listing and host factors and determine their relation with dynamic pricing strategies.

Journal

International Journal of Contemporary Hospitality Management – Emerald Publishing

Published: Jan 8, 2018

References

  • Strategic and tactical price decisions in hotel revenue management
  • Dynamic pricing strategies: evidence from European hotels
  • Dynamic room pricing model for hotel revenue management systems
  • Dynamic pricing for hotel revenue management using price multipliers