Price Determinants of Airbnb Listings: Evidence from Hong Kong

Abstract

Price determinants of Airbnb listings is still in its infancy and Asian markets are underexplored. Based on existing literature, this article examines the impacts of five groups of explanatory variables on Airbnb price in Hong Kong: listing attributes, host attributes, rental policies, listing reputation, and listing location. Hedonic price regression highlights that: (a) compared with previous studies, the effect of room type on Airbnb price is exceptionally high in Hong Kong, due to the "the luxury of spaciousness" in this overpopulated city; (b) contradictory to previous findings, hosts' listings count have a negative effect on Airbnb listing price in Hong Kong, which can be explained by external (Hong Kong's fiercely competitive environment for multilisting Airbnb hosts) and internal (multilisting hosts' trade-off between booking opportunity and listing price) factors; (c) in Hong Kong, only low-end Airbnb rentals benefit from locational factors, indicating the heterogeneous effects of location on Airbnb pricing. These findings shed new light from previous studies and the authors provide possible explanations from theoretical and practical perspectives.