This paper seeks to clarify the nature of the urban vacation rental business, in particular in relation to the so-called “Sharing Economy,” by analyzing the dynamic pricing behavior of Airbnb hosts in Amsterdam. It explores Airbnb’s host “professionalization,” building on the strategic management literature showing efficient pricing behavior to be the result of an acquired capability required to interpret complex and incomplete information. Through an analysis of 11,264,907 daily observations from 32,815 units, it finds that hosts who adjust their prices more frequently outperform others in RevPAR, ADR, and occupancy. Specifically, it finds that the number of properties per host (as an indicator of Airbnb professionalization) is positively associated with RevPAR, ADR, occupancy, and number of reviews through the number of negative price changes, respectively mean negative price change, and that this effect differs depending on the level of the number of positive price changes, respectively mean positive price change. Implications for social and academic perspectives on Airbnb as “Sharing,” and research on the externalities of urban vacation rentals are discussed.
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In 2015, our calculation of Airbnb visitors to Amsterdam (550,000) was corroborated by the survey-based findings of NBTC Holland promotion (NBTC Holland Marketing 2017; Vranken and Most 2016), and with the numbers published by Airbnb in their tourist tax agreement with the City of Amsterdam (Amsterdam Marketing 2016). In 2016, our calculation of 1.1 million visitors for Amsterdam, 90.000 for Rotterdam and 88.000 for The Hague matches the total of 1.4 million claimed by Airbnb for the entire country (Sondermeijer 2017).
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Oskam, J., van der Rest, J. & Telkamp, B. What’s mine is yours—but at what price? Dynamic pricing behavior as an indicator of Airbnb host professionalization. J Revenue Pricing Manag 17, 311–328 (2018). https://doi.org/10.1057/s41272-018-00157-3
- Sharing economy
- Collaborative consumption
- Dynamic pricing
- Revenue management