New research from the University of Denver’s Daniels College of Business finds that Airbnb hosts’ service quality significantly declines as the number of listings they manage increases. The research was published in a special issue of the International Journal of Contemporary Hospitality Management in July 2017.
“It is no longer surprising to see mega-hosts on Airbnb who manage more than one listing, full time, in modern cities like San Francisco and New York,” says lead study author Karen Xie, assistant professor at the Fritz Knoebel School of Hospitality Management.
“We see a warning sign though: there is a diminishing sales performance per listing as the number of listings managed by a host increases. Essentially, the hosts who decide to expand on Airbnb would face a ‘trade-off’ between quality and quantity. Expansion on Airbnb would not only hurt the overall payoff of the listing portfolio but would also influence the healthy and viable growth of this peer-to-peer accommodation sharing community. “
The article, “The impacts of quality and quantity attributes of Airbnb hosts on listing performance,” focused on the city of Austin, Texas, and found that although the majority of hosts (87.74 percent) manage only one listing, a significant portion of Austin hosts (12.26 percent) manage multiple listings. The authors also found that the effects of favorable host service attributes (response rate, being a local host, being a super host and being a verified host) on listing sales declined when hosts managed a higher number of listings. For their analysis, the authors used a dataset of 4,608 Airbnb hosts with 5,805 active listings.
The findings of this research have clear implications for sharing economy businesses such as Airbnb and HomeAway. The service quality of product providers is a critical factor in sustaining healthy and viable business growth, especially for peer-to-peer, short-term, rental startup companies. As these companies expand and scale their users, balancing the quantity of listings managed while incentivizing hosts to improve quality should be their core message.