Airbnb is now present in many tourist destinations worldwide. With the pricing power in the hands of the individual hosts, the assessment of competition is of great relevance. Despite the many studies on the drivers of Airbnb prices, there is no contribution yet on how quality affects the spatial dimensions of Airbnb markets. We aim to fill this gap with a case study of Bristol (United Kingdom). Using standard regression techniques, we find a quality-moderated spatial decay in the price effects of competition in local Airbnb markets. Thus, the price of a given listing is affected negatively by other listings within a set of radii that decrease with product differentiation. Beyond this local market boundary, the existence of other listings may increase prices, as demand is driven to the neighborhood- or city-wide markets because of the diversity of tourism accommodation.
BalaguerJPerníasJC (2013) Relationship between spatial agglomeration and hotel prices. Evidence from business and tourism consumers. Tourism Management36: 391–400.
2.
BaumJAHavemanH (1997) Love thy neighbour? Differentiation and agglomeration in the Manhattan hotel industry, 1898-1990. Administrative Science Quarterly42(2): 304–338.
3.
BaumJAMeziasSJ (1992) Localized competition and organizational failure in the Manhattan hotel industry 1898-1990. Administrative Science Quarterly37(4): 580–604.
4.
BecerraMSantalóJSilvaR (2013) Being better vs. being different: Differentiation, competition, and pricing strategies in the Spanish hotel industry. Tourism Management34: 71–79.
5.
Benítez-AuriolesB (2018) The role of distance in the peer-to-peer market for tourist accommodation. Tourism Economics24(3): 237–250.
6.
BlalISingalMTemplinJ (2018) Airbnb’s effect on hotel sales growth. International Journal of Hospitality Management73: 85–92.
7.
BorosLDudásGKovalcsikT, et al. (2018) Airbnb in Budapest: analysing spatial patterns and room rates of hotels and peer-to-peer accommodations. Geojournal of Tourism and Geosites21(1): 26–38.
8.
BullA (1994) Pricing a motel’s location. International Journal of Contemporary Management6(6): 10–15.
9.
ChamberlinE (1933) Theory of Monopolistic Competition. Cambridge, UK: Harvard University Press.
10.
ChenCFRothschildR (2010) An application of hedonic pricing analysis to the case of hotel rooms in Taipei. Tourism Economics16: 685–694.
11.
ChenYXieK (2017) Consumer valuation of Airbnb listings: a hedonic pricing approach. International Journal of Contemporary Hospitality Management29(9): 2405–2424.
12.
ChungWKalninsA (2001) Agglomeration effects and performance: a test of the Texas lodging industry. Strategic Management Journal22(10): 969–988.
13.
DavisPGarcésE (2009) Quantitative Techniques for Competition and Antitrust Analysis. Princeton, NJ: Princeton University Press.
DogruTModyMSuessC (2019) Adding evidence to the debate: quantifying Airbnb’s disruptive impact on ten key hotel markets. Tourism Management72: 27–38.
16.
DudásGBorosLKovalcsikT, et al. (2017) The visualisation of the spatiality of Airbnb in Budapest using 3-band raster representation. Geographia Technica12(1): 23–30.
17.
ErtEFleischerAMagenN (2016) Trust and reputation in the sharing economy: the role of personal photos in Airbnb. Tourism Management55: 62–73.
18.
Eugenio-MartínJLCazorla-ArtilesJMGonzález-MartelC (2019) On the determinants of Airbnb location and its spatial distribution. Tourism Economics(In Press).
19.
GanLHernandezMA (2013) Making friends with your neighbors? Agglomeration and tacit collusion in the lodging industry. Review of Economics and Statistics95(3): 1002–1017.
20.
GibbsCGuttentagDGretzelU, et al. (2018) Pricing in the sharing economy: a hedonic pricing model applied to airbnb listings. Journal of Travel and Tourism Marketing35(1): 46–56.
21.
GunterUÖnderI (2018) Determinants of Airbnb demand in Vienna and their implications for the traditional accommodation industry. Tourism Economics24(3): 270–293.
22.
GutiérrezJGarcía-PalomaresJCRomanillosG, et al. (2017) The eruption of Airbnb in tourist cities: Comparing spatial patterns of hotels and peer-to-peer accommodation in Barcelona. Tourism Management62: 278–291.
23.
GuttentagD (2015) Airbnb: Disruptive innovation and the rise of an informal tourism accommodation sector. Current Issues in Tourism18: 1192–1217.
KwokLXieKL (2019) Pricing strategies on Airbnb: Are multi-unit hosts revenue pros?International Journal of Hospitality Management82: 252–259.
26.
LawaniAReedMMarkT, et al. (2019) Reviews and price on online platforms: Evidence from sentiment analysis of Airbnb reviews in Boston. Regional Science and Urban Economics75: 22–34.
27.
LeeSK (2015) Quality differentiation and conditional spatial price competition among hotels. Tourism Management46: 114–122.
28.
LeeSKJangS (2012) Premium or discount in hotel room rates? The dual effects of a central downtown location. Cornell Hospitality Quarterly53(2): 165–173.
29.
LordeTJacobJWeekesQ (2019) Price-setting behavior in a tourism sharing economy accommodation market: a hedonic price analysis of Airbnb hosts in the Caribbean. Tourism Management Perspectives30: 251–261.
30.
MagnoFCassiaFUgoliniMM (2018) Accommodation prices on Airbnb: effects of host experience and market demand. The TQM Journal30(5): 608–620.
31.
MartinS (2010) Industrial Organization in Context. Oxford, UK: Oxford University Press.
32.
MasieroLNicolauJLLawR (2015) A demand-driven analysis of tourist accommodation price: a quantile regression of room bookings. International Journal of Hospitality Management50: 1–8.
33.
ÖnderIWeismayerCGunterU (2018) Spatial price dependencies between the traditional accommodation sector and the sharing economy. Tourism Economics25(8): 1150–1166.
34.
Perez-SanchezVRSerrano-EstradaLMartiP, et al. (2018) The what, where, and why of Airbnb price determinants. Sustainability (Switzerland10(12): 4596.
35.
Rigall-I-TorrentRFluviàMBallesterR, et al. (2011) The effects of beach characteristics and location with respect to hotel prices. Tourism Management32(5): 1150–1158.
36.
SchamelG (2012) Weekend vs. Midweek stays: modelling hotel room rates in a small market. International Journal of Hospitality Management31: 1113–1118.
37.
ShakedJSuttonJ (1982) Relaxing price competition through product differentiation. Review of Economic Studies39(4): 252–262.
38.
SolerIPGemarG (2018) Hedonic price models with geographically weighted regression: an application to hospitality. Journal of Destination Marketing and Management9: 126–137.
TussyadiahIPPesonenJ (2016) Impacts of peer-to-peer accommodation use on travel patterns. Journal of Travel Research55(8): 1022–1040.
41.
UrtasunAGutiérrezI (2006) Hotel location in tourism cities: Madrid 1936–1998. Annals of Tourism Research33(2): 382–402.
42.
VarmaAJukicNPestekA, et al. (2016) Airbnb: Exciting innovation or passing fad?Tourism Management Perspectives20: 228–237.
43.
WachsmuthDWeislerA (2018) Airbnb and the rent gap: gentrification through the sharing economy. Environment and Planning A50(6): 1147–1170.
44.
WangDNicolauJ (2017) Price determinants of sharing economy-based accommodation rental: a study of listings from 33 cities on airbnb.com. International Journal of Hospitality Management62: 120–131.
45.
XieKKwokL (2017) The effects of Airbnb’s price positioning on hotel performance. International Journal of Hospitality Management67: 174–184.
46.
YangYMuellerNJCroesRR (2016) Market accessibility and hotel prices in the Caribbean: the moderating effect of quality-signaling factors. Tourism Management56: 40–51.
47.
YelkurRDacostaM (2001) Differential pricing and segmentation on the internet: the case of hotels. Management Decision39(4): 252–262.
48.
ZervasGProserpioDByersJW (2017) The rise of the sharing economy: estimating the impact of Airbnb on the hotel industry. Journal of Marketing Research54(5): 687–705.
49.
ZhangZChenRHanLYangL (2017) Key factors affecting the price of Airbnb listings: a geographically weighted approach. Sustainability (Switzerland)9(9): 1635.
Supplementary Material
Please find the following supplemental material available below.
For Open Access articles published under a Creative Commons License, all supplemental material carries the same license as the article it is associated with.
For non-Open Access articles published, all supplemental material carries a non-exclusive license, and permission requests for re-use of supplemental material or any part of supplemental material shall be sent directly to the copyright owner as specified in the copyright notice associated with the article.
