Airbnb and hotels during COVID-19: different strategies to survive

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Abstract

Purpose

The purpose of this paper is to examine the impact of the COVID-19 pandemic on the traditional hotel industry and Airbnb in nine major European cities. The author examines differences between the two business models and analyses various strategies of Airbnb hosts to cope with the crisis.

Design/methodology/approach

A detailed empirical analysis is presented based on data from STR and Inside Airbnb for the period January 2018–September 2020. To assess the impact of the pandemic on the hotel industry, year-to-year changes in various performance metrics are presented. The author also investigates the impact of the pandemic on Airbnb prices with panel data regression analysis. Using text-mining methods, signs for new use-cases are explored, including renting flats for home-office or quarantine.

Findings

The results support that Airbnb supply is more flexible. While hotel supply quickly returned to a level close to 2019, the average number of Airbnb listings was lower by more than 15%. Furthermore, the price analysis showed that Airbnb rates decreased more moderately than hotel prices. These findings suggest that a significant share of hosts pivoted from short-term accommodation provision and used their property differently, e.g. rented on a long-term basis. The analysis of listing characteristics revealed that the role of longer stays increased; however, the results do not support a shift towards advertising listings for home-office or quarantine purposes.

Originality/value

This paper presents the impact of the pandemic on the hospitality sector in a wide sample of European cities, explores the adjustment of hotels and Airbnb and provides new evidence on the differences between the business models.

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Most cited references 34

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The Rise of the Sharing Economy: Estimating the Impact of Airbnb on the Hotel Industry

Georgios Zervas, Davide Proserpio, John W. Byers (2017)

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Assessing impacts of SARS and Avian Flu on international tourism demand to Asia

Hsiao-I Kuo, Chi-Chung Chen, Wei-Chun Tseng … (2008)

The purpose of this paper is to investigate the impacts of infectious diseases including Avian Flu and severe acute respiratory syndrome (hereafter SARS) on international tourist arrivals in Asian countries using both single datasets and panel data procedures. An autoregressive moving average model together with an exogenous variables (ARMAX) model are used to estimate the effects of these diseases in each SARS- and Avian Flu-infected country, while a dynamic panel model is adopted to estimate the overall impact on the region of these two diseases. The empirical results from both approaches are consistent and indicate that the numbers of affected cases have a significant impact on SARS-affected countries but not on Avian Flu-affected countries. However, since the potential damage arising from the Avian Flu and subsequent pandemic influenza is much greater than that resulting from the SARS, the need to take the necessary precautions in the event of an outbreak of Avian Flu and pandemic influenza warrants further attention and action. Therefore, the empirical findings of this study could add to the knowledge regarding the relationship between tourism and crisis management, especially in so far as the management of transmissible diseases is concerned.