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French Riviera short term accommodation

Analysis and comparison of price determinants using Airbnb and Booking.com data

Written by Augustine Le Du

Paper category

Bachelor Thesis

Subject

Business Administration>Finance

Year

2020

Abstract

Bachelor Thesis: The hedonic price model Lancaster (1966) and Rosen (1974) discussed a new non-consumer theoretical approach, considering that consumer utility is not directly given by commodities, but by the sum of its characteristic components. The model has been used in various informal studies before it was properly developed by these authors. The Hedonic price model has been used in different sectors to analyze price components. Griliches (1961) applied it to the American auto industry, comparing different index prices with the evolution of auto parts. Goodman (1978) applies this model to the housing market that compares housing prices in different regions. They found that when comparing houses with the same characteristics, houses in the city center are more expensive than houses in the suburbs. 3.2 The applied hedonic price model in the hotel industry has been used in different studies in the hotel industry because it can identify variables that affect house prices. This model is used to conduct different studies on hotel or shared accommodation prices for different locations and using different price components. Lorde et al. have used the Hedonic model. (2019) Compare the price determinants of shared accommodation in Caribbean countries. When they studied a very specific field, they enhanced the important heterogeneity of results in different countries and regions. Other papers used the Hedonic model in different locations, Portolan (2013) studied Croatia, and Monty and Skidmore (2003) studied southeastern Wisconsin with different results. It seems that the Hedonic model is more suitable for hotels than shared accommodation, and the number of papers that have used this model to analyze room prices. As a shared accommodation, the price seems to have different components, depending on the location. Gizardi et al. (2017) analyzed Rome and Milan, Andersson (2008) analyzed Singapore and Thrane (2007) focused on Oslo. Espinette et al. (2003) Investigating the prices of travel agencies in Sunny Beach tourism in Spain, which is a market very similar to the market we have seen in this article. This article can help understand the results of Espinet et al. (2003) can be extended to a very similar market. The advantage of the Hedonic price model is that it is useful for customers, accommodation providers, and policy makers. It provides customers with the prices they need to pay to access different properties in shared accommodations and hotels. In this regard, it can help them choose between these two types of accommodation based on price and available properties. Similarly, hedonic prices help suppliers develop price strategies, but they can also allow them to increase prices or increase attractiveness. 4 Data When individuals search for short-term accommodation, the search is conducted based on some attributes. With the development of search engines and multiple platforms now available to book short-term accommodation, customers can easily compare different accommodations. They can also use filters in their research to find different types of accommodation and prices according to their requirements. 4.1 Short story of platform selection platform In 2007, a large-scale design conference was held in San Francisco, and the hotel got the idea of ​​three people to rent an air cushion in their room. A few months later, Airbnb (AirBed and breakfast) was officially created by Brian Chesky, Joe Gebbia, and Nate Blecharczyk (Gallagher, 2017). “Today, Airbnb Hosts provide millions of listings in more than 220 countries and regions and more than 100,000 cities” (Airbnb, 2020). Airbnb has more than 5 million listings worldwide in 2020 (Airbnb, 2020). Booking.com was founded in 1996 in Amsterdam, the Netherlands. The goal of the platform is to match the place travelers want to go and the accommodation provided in this place through a simple online platform. Booking.com became the leader of online booking in Europe in 2005. In 2018, booking.com reported more than 27 million global listings in 227 countries (Booking.com, 2018). Very similar sites The Airbnb site is designed to facilitate guests to research their standards. Entering the website, the customer first adds his destination, travel date and number of guests. For the second time, he can add criteria (price, location, any specific facilities, services...), and the website will display a list of accommodations that meet the criteria as much as possible. Customers only need to choose between the available accommodations. In order to help his choice, guests can access the photos of the accommodation, guest information, previous guest reviews, star ratings... Booking.com is very similar to Airbnb. The customer first selects the date, location and number of guests, and then can Choose the attributes they want. The first choice of these two websites is because they have very large lists in France, so the sample we want to take will be larger. The second reason is the similarity of the websites. Consumers can easily compare the accommodation between the two websites, enter his requirements, compare prices, reviews, photos...4.2 Data collection The main research paper analyzes the weekend’s One night stay, Saturday 22 August 2020, because there are usually more tourist activities on weekends and peak seasons. August was chosen because it is the month with the highest tourist activity on the French Riviera. Read Less