The Value of Landlord's Flexible Supply in Accommodation Market: The Case of Airbnb

Abstract

The sharing economy had a profound impact on the accommodation industry in the past decade. Most widely known is Airbnb which allows its clients sharing their idle properties anytime they are willing to accept prevailing rental prices. Using the data collected from Airbnb.com, we explore the marginal effects and the polices effects on revenue and we estimate the traveler's demand preference for listings attributes on platform. We calculate the incentive fees by predicting landlords’ behavior with logistic regression, gradient boosting and SVM. Our results indicate that moderately rated listings are more preferred by travelers, especially those which are high occupancy rate, business type and convenient to book. If required to supply more flexible time on home sharing, landlords’ expected revenue should be guaranteed at least 254 per night on weekday and 260 per night on weekend.