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Airbnb guests seek out cleaner properties in the pandemic

AIRBNB IS IN remarkably good shape, considering that the covid-19 pandemic has devastated the travel business. The holiday-rental company made a loss in the first half of the year, but has since returned to profit. Business has held up in part thanks to more “staycations”. And the company is pressing ahead with an IPO, which is expected to raise more than $3bn. When Airbnb’s shares start trading on Thursday, the market could value the company at more than $40bn. But Airbnb’s hosts, who advertise their properties on the site, are in a more precarious position. Even where lockdown restrictions have been lifted, not all have seen bookings return. According to new research, one way for hosts to entice guests back is to clean up their act.

Researchers at the University of Nevada, Reno, and Clemson University examined bookings data on 6,460 properties listed on Airbnb in Austin, Texas between July 2018 and July 2020. (The city didn’t curb travel when covid-19 spread, meaning that any decline in bookings can be attributed to visitors’ preferences rather than restrictions.) They also used an algorithm to compile a list of words associated with cleanliness in Airbnb reviews, which was then used to assess the properties in Austin. Each one was deemed to be either perceived as clean, if enough reviewers described it as such, or not perceived as clean.

The immediate effect of covid-19 on Austin’s rental market was drastic: the number of listings dropped by around 25% at the start of the pandemic, while hosts’ income and occupancy fell by 22% and 20%, respectively, for properties still on the site. Properties perceived as clean, however, recovered much of that deficit over the summer, mitigating the earlier effect of covid-19. By July average income per clean property was even a shade higher than a year before (see chart). Overall, controlling for other factors such as the characteristics of a property and seasonal demand, this meant an average monthly loss of income of $35 for each clean property between March and July. That compares with a drop of $167 per month for those not perceived to be clean. The authors attribute this to an increased market share for hygienic accommodation, rather than an opportunistic increase in prices.

Airbnb has realised that cleanliness is next to confidence. Since October it has required its hosts around the world to adhere to strict cleaning guidelines, including using disinfectants approved by the company. Some hosts might bemoan the extra effort and expense needed to reassure guests that their accommodation is safe. But on this evidence, all that elbow grease pays off.

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Author: | Post link: https://www.economist.com/graphic-detail/2020/12/08/airbnb-guests-seek-out-cleaner-properties-in-the-pandemic
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