Pricing Rental Tourist Accommodation: Airbnb in Barcelona

Abstract

Digital marketplaces are rapidly flourishing, especially in travel and tourism services. Airbnb is providing one of the most evident examples of this successful evolution. Prices are a crucial factor to understand the business model and the economic performance in hospitality businesses. This chapter studies how prices are formed in Airbnb, focusing the analysis on a wide sample of accommodations listed in Barcelona (Spain). Contextual factors, lodging amenities and some hosts' attributes critically influence pricing in the digital platform. The accommodations located closer to the main tourist amenities concentrate most of the supply of rental services whereas consumer preferences for privacy and host identification give rise to higher prices. The research also confirms that commercial hosts exacerbate the upward movement of rental prices in the central districts of the city.