Are consumers loyal to home-sharing services? Implications for hosts, room-sharing sites, and hotels
Tuesday, May 07, 2019
"Competition promotes innovation."
That’s what I believe in the business world. That statement is probably a true reflection of what is going on among hotels, Airbnb, and online travel agents (OTAs).
Last week, for example, almost every hotelier was talking about Marriott getting into the short-term residential business. In fact, Marriott had expressed its interest in the home-sharing business back in May 2018. But now, the world’s largest hotel chain is finally ready to compete head-to-head with home-sharing giant Airbnb.
I tend to agree that Airbnb and Marriott each want what the other offers, because when Airbnb is getting into the traditional hotel business, hotels are also entering the short-term residential business. Not only do they both offer similar products — accommodation services for the travelers who are away from home, but their customers also demonstrate similar loyalty behaviors when it comes to repeat purchases of the same service or with the same service provider.
According to one of my recent studies, for instance, consumers can also be loyal to a listing as well as the host who manages the listing on a room-sharing website, just like what they would do to hotels and other hospitality/tourism products. The details of the study include:
The background — different levels of customer loyalty
In a retail setting, consumers can develop loyalty towards a product, a salesperson who sells the product, a store where the product is found, or the brand of a store that sells the product. One level of customer loyalty might or might not spillover to another level.
In this study, a special research interest was put on studying two levels of customer loyalty towards home-sharing services, including the level of the service product itself (a listing) and the level of the service provider (the host who manages the listing).
Particularly, consumers’ actual repeat purchase behaviors were measured as the critical indicator for consumer loyalty. Through our analysis, related businesses will be able to develop effective marketing strategies to promote repeat purchase behaviors among travelers according to the levels where they build loyalty.
The three research questions
1. What are the effects of host attributes on the likelihood of travelers’ repurchasing with the same host and the same listing?
2. Are travelers who have stayed with a home-sharing host/listing before more likely to re-purchase with the same host and/or the same listing, respectively?
3. As the frequency of past stays with the home-sharing host/listing increases, would certain host attributes become more (or less) salient in influencing repeat purchase with the host and/or of the listing?
The research settings
We adopted econometrics-based data analytics approaches (ordinary least squares regressions and probability regressions with random effect estimations) to analyze a real-time, large-scale, and granular dataset collected from Xiaozhu.com, a dominant home-sharing website in mainland China. The dataset included the individual travelers’ activities with 473 listings managed by 135 hosts in Shanghai from August 2012 to August 2016.
The dependent variables were "repeat purchase with a host" and "repeat purchase of a listing."
The independent variables included "host attributes," such as "average time in minutes that a host takes to confirm or reject a reservation request," "acceptance rate," "listing capacity," as well as "frequency of past stays with the host" and "frequency of past stays with the listing."
The controlled variables included: "size of a listing," "number of bedrooms," "number of living rooms," "number of bathrooms," "number of beds," "number of kitchens," "number of balconies," and "number of guests allowed."
Repeat purchase with a host
Acceptance rate and listing capacity, as well as the travelers’ frequency of past stays with a host, significantly influence a traveler’s repeat purchase behaviors with the host. When travelers’ frequency of past stays with a host increases, those host attributes being analyzed become less important in their repeat-purchase decisions.
Repeat purchase of a listing
The likelihood of a traveler’s repeat purchase of a listing would increase as (a) the host shortens the confirmation time and increases the acceptance rate or (b) the traveler’s frequency of past stays with the listing increases.
The implications: Ways to promote customer loyalty
For the hosts who manage one or more home-sharing listings
Referring to our findings, hosts should highlight the importance “signals” that can drive travelers’ repeat-purchase behaviors in their profile and during the communication process with the travelers. They may also work on improving their acceptance rate and lowering the confirmation time.
For home-sharing websites
They are encouraged to promote the hosts and listings with those desirable attributes identified in this study by featuring them as "recommended hosts and listings" in a traveler’s search results. It is also time for home-sharing websites to roll out loyalty programs that reward their hosts and frequent travelers.
Hoteliers are also highly encouraged to carefully review the study for possible implications that are relevant to their daily operations and product development. Hoteliers can embrace the trend of "relationship bonding" as they develop a new product-service mix that appeals to the travelers who repeatedly stay in home-sharing facilities instead of hotels.
Access to the study
This study was published in the International Journal of Contemporary Hospitality Management, which I worked with another two researchers, Karen Xie at University of Denver and Jiang Wu at Wuhan University in China.
Free access to the PDF file of this study is available on Emerald Insight for the first 50 clicks.
Do you believe travelers would feel addicted to home-sharing stays, like what are offered on Airbnb? What can hotels do to stay innovative and win travelers’ hearts?
- Travel, Hospitality & Event Management
- Business Management, Services & Risk Management
- Facilities & Grounds
- Recreation & Leisure
- Science & Technology
- The dangers of mixing up 5.56x45mm NATO and .223 Remington rounds
- How to properly sight in a rifle with a scope
- Breaking down barriers to make career and technical pathways accessible for everyone
- 8 exercises for strengthening your business writing
- Battery issues: Understanding your RV’s electrical systems
- The advantages of using a .45-70 cartridge
- You can’t be what you can’t see
- 10 negative employee behaviors that undermine success
- Avoid unnecessary layers of governance
- A complete list of 22 cybersecurity tips every user must follow: How many boxes can you check?
- 4 COVID-19-related changes that could outlast the pandemic
- How hard do you make your customers work to buy something from you?
- Why phased-in marketing is the right way to resume a top-selling product message
See your work in future editions
Your content, Your Expertise,
Your Industry Needs YOUR Expert Voice & We've got the platform you needFind Out How