Understanding Airbnb Room Sales and Revenue. An Empirical Investigation of Factors Affecting Sales and Revenue of Collaborative Consumption Behavior.

Abstract

The advent of a collaborative consumption behavior allowed people to coordinate an acquisition and a distribution of resources for a fee or other compensation. Airbnb is one of a most popular collaborative consumption platform which enables space owners to rent out their space to strange tourists for a financial compensation. And guests pay a fee and choose where to stay based on the information provided by space hosts in the Airbnb platform. However, little is understood about factors affecting sales and revenue in collaborative consumption behavior. In this paper, we address this question by first constructing a data set of a total 2,517 listings with 80 features including actual room sales and revenue data from Airbnb platform. Using signaling theory as a conceptual framework, we identified assessment signals and conventional signals in Airbnb platform and classified them into six different categories which are: house info, host info, utility, policy, guest feedback and host activity. Then we used data-driven approach to quantify their influences on i) percentage of room sales and ii) room sales revenue of Airbnb. We found that guest feedback, type of space and policies (price and minimum stay) have significant effect on sales and revenue while host information and host activities are not.