Dynamic pricing in Airbnb: Individual versus professional hosts

Dynamic pricing is a strategic revenue management tool used by various businesses to optimize profits, and sharing economy lodging has become an interesting context for its use. However, hosts managing multiple listings and nonprofessional hosts have structural and managerial differences. This paper explores the relevance of the degree of professionalization of Airbnb hosts and its relationships with pricing strategies and listing performance. The longitudinal (2016-2019) study analyzes two icons of Italy, Rome and Milan and includes more than 1.2 million observations. The findings show that both the listing performance and the average intensity of price variability tend to increase with the degree of professionalization (number of listings). At the same time, the impact of price variability on performance remains solid regardless of the number of listings. Thus, the study suggests that time-varying pricing is an important and relatively accessible strategy for both professional and nonprofessional hosts.

Automated summary

The study explores the impact of professionalization level of Airbnb hosts on pricing strategies and listing performance. Findings suggest that both listing performance and price variability tend to increase with the degree of professionalization, while the effect of price variability on performance remains consistent regardless of the number of listings. Time-varying pricing is considered an important and relatively accessible strategy for hosts of all professional levels.