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The What, Where, and Why of Airbnb Price Determinants

Author

Listed:
  • V. Raul Perez-Sanchez

    (Building Sciences and Urbanism Department, University of Alicante, Carretera de San Vicente del Raspeig s/n, San Vicente del Raspeig, 03690 Alicante, Spain)

  • Leticia Serrano-Estrada

    (Building Sciences and Urbanism Department, University of Alicante, Carretera de San Vicente del Raspeig s/n, San Vicente del Raspeig, 03690 Alicante, Spain)

  • Pablo Marti

    (Building Sciences and Urbanism Department, University of Alicante, Carretera de San Vicente del Raspeig s/n, San Vicente del Raspeig, 03690 Alicante, Spain)

  • Raul-Tomas Mora-Garcia

    (Building Sciences and Urbanism Department, University of Alicante, Carretera de San Vicente del Raspeig s/n, San Vicente del Raspeig, 03690 Alicante, Spain)

Abstract

Breakthrough changes in the rental market have occurred with the introduction of peer-to-peer accommodation services such as Airbnb. This phenomenon is attracting tourists who contribute to the sustainability of local trade and the economic development of the city. This research enriches the current debate on the range of factors that influence Airbnb accommodation prices. To that end, a method was developed to understand the relationship between Airbnb accommodation attributes and listing prices; and to consider variables related to the properties’ location and surrounding urban environment, considering the touristic characteristics of the four Spanish Mediterranean Arc cities selected as case study. A multivariable analysis technique is used for estimating a hedonic price model that adopts the ordinary least squares and the quantile regression methods. The findings obtained for the impact of location on listing prices are contrary to previous studies. In fact, accommodation prices increase incrementally by 1.3% per kilometer from the tourist area, which in all four cases are situated in the historic area of the city. However, at the same time, accommodation prices decrease incrementally as distance from the coastline increases. Lastly, results related to how the listings’ accommodation, host, and advertising characteristics impact Airbnb prices concur with previous studies.

Suggested Citation

  • V. Raul Perez-Sanchez & Leticia Serrano-Estrada & Pablo Marti & Raul-Tomas Mora-Garcia, 2018. "The What, Where, and Why of Airbnb Price Determinants," Sustainability, MDPI, vol. 10(12), pages 1-31, December.
    • Handle: RePEc:gam:jsusta:v:10:y:2018:i:12:p:4596-:d:188018
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    References listed on IDEAS

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    Cited by:

    1. Giulia Contu & Luca Frigau & Claudio Conversano, 2023. "Price indicators for Airbnb accommodations," Quality & Quantity: International Journal of Methodology, Springer, vol. 57(5), pages 4779-4802, October.
    2. Almudena Nolasco-Cirugeda & Clara García-Mayor & Cristina Lupu & Alvaro Bernabeu-Bautista, 2022. "Scoping out urban areas of tourist interest though geolocated social media data: Bucharest as a case study," Information Technology & Tourism, Springer, vol. 24(3), pages 361-387, September.
    3. Ricardo Teruel-Gutierrez & Mariluz Maté-Sánchez-Val, 2021. "The impact of Instagram on Airbnb’s listing prices in the city of Barcelona," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 67(3), pages 737-763, December.
    4. Yifei Jiang & Honglei Zhang & Xianting Cao & Ge Wei & Yang Yang, 2023. "How to better incorporate geographic variation in Airbnb price modeling?," Tourism Economics, , vol. 29(5), pages 1181-1203, August.
    5. Benoit Faye, 2021. "Methodological discussion of Airbnb's hedonic study: A review of the problems and some proposals tested on Bordeaux City data," Post-Print hal-03407540, HAL.
    6. Yang, Yang & Mao, Zhenxing, 2020. "Location advantages of lodging properties: A comparison between hotels and Airbnb units in an urban environment," Annals of Tourism Research, Elsevier, vol. 81(C).
    7. Robert Jeyakumar Nathan & Vijay Victor & Melanie Tan & Maria Fekete-Farkas, 0. "Tourists’ use of Airbnb app for visiting a historical city," Information Technology & Tourism, Springer, vol. 0, pages 1-26.
    8. Angelo Presenza & Antonio Messeni Petruzzelli & Angelo Natalicchio, 2019. "Business Model Innovation for Sustainability. Highlights from the Tourism and Hospitality Industry," Sustainability, MDPI, vol. 11(1), pages 1-5, January.
    9. Chunfang Zhao & Yingliang Wu & Yunfeng Chen & Guohua Chen, 2023. "Multiscale Effects of Hedonic Attributes on Airbnb Listing Prices Based on MGWR: A Case Study of Beijing, China," Sustainability, MDPI, vol. 15(2), pages 1-21, January.
    10. Augusto Voltes-Dorta & Federico Inchausti-Sintes, 2021. "The spatial and quality dimensions of Airbnb markets," Tourism Economics, , vol. 27(4), pages 688-702, June.
    11. Yan Liu & Linchuan Yang & Kwong Wing Chau, 2020. "Impacts of Tourism Demand on Retail Property Prices in a Shopping Destination," Sustainability, MDPI, vol. 12(4), pages 1-14, February.
    12. Park, Sungwook & Kwon, Youngsun, 2023. "Disentangling the effects on OTT platform performance of three strategies: Pricing, M&As, and content investments," Telecommunications Policy, Elsevier, vol. 47(8).
    13. Robert Jeyakumar Nathan & Vijay Victor & Melanie Tan & Maria Fekete-Farkas, 2020. "Tourists’ use of Airbnb app for visiting a historical city," Information Technology & Tourism, Springer, vol. 22(2), pages 217-242, June.
    14. Josep Lladós-Masllorens & Antoni Meseguer-Artola & Inma Rodríguez-Ardura, 2020. "Understanding Peer-to-Peer, Two-Sided Digital Marketplaces: Pricing Lessons from Airbnb in Barcelona," Sustainability, MDPI, vol. 12(13), pages 1-19, June.
    15. Sainaghi, Ruggero & Chica-Olmo, Jorge, 2022. "The effects of location before and during COVID-19," Annals of Tourism Research, Elsevier, vol. 96(C).
    16. Meijian Yang & Enjun Xia, 2021. "A Systematic Literature Review on Pricing Strategies in the Sharing Economy," Sustainability, MDPI, vol. 13(17), pages 1-28, August.

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