Can you predict the price of your next Airbnb?
For better or worse, Airbnb is now a permanent resident in most destinations around the world. For hosts, it offers a way to earn income from their home and for guests it provides (relatively) inexpensive accommodation and a local experience unrivalled by hotels.
But with hosts able to state their price, how can you be sure you are getting the best deal?
In order to help answer this question I analysed listings, availability and review data from Airbnb homes in Boston and Oakland to uncover trends in how hosts and guests use Airbnb, and applied machine learning to identify the features and property characteristics that help to predict listing price.
Here are 5 insights from my analysis that might help you save money on your next holiday, whenever that may be (thanks Coronavirus!).
1. These words are most commonly used to describe listings
“Quiet”, “spacious” and “restaurants” are among the top words used to describe listings of homes in both Boston and Oakland. They are commonplace, irregardless of their location.
Certain words are however location-specific and allude to the true essence of their locale. For example, “historic” and “renovated” are almost exclusively used in Boston listings whereas “cosy” and “garden” are synonymous with descriptions of Oakland homes.
A description that uses words unique to the home’s location could therefore indicate that the host is local and knows the area well. Which leads us nicely onto the second insight.
2. The majority of homes aren’t actually homes — they are full-time rental accommodation
Over 40% of the entire homes or apartments listed for rent on Airbnb in Oakland are essentially just rentals where the host spends no time in the home. Despite this proportion being lower in Boston, 1 in 2 entire homes listed are available for less than half of this coming year.
When we look at how the proportion of homes available to rent varies throughout the coming year it is clear that guests will not be short of choice. On any given day half of Oaklands Airbnb homes are on the market.
There are noteworthy drops in availability in both Boston and Oakland which unsurprisingly occur around Easter and Independence Day. What is surprising is the absence of a recovery in availability immediately afterwards. Further analysis of this trend implied that it is the result of part-time hosts returning to their homes for the holiday periods and subsequently making their homes unavailable for the remainder of the year.
The original purpose of Airbnb was to offer a platform for people to share their homes. Today though, it is having the opposite effect — disrupting the residential sector and creating a shortage of homes for local residents in cities around the world.
This analysis however shows that the extent of this monopoly varies, not just by location, but also throughout the year.
3. Watch out for price fluctuations
The variability in the price of a listing can vary according to the day of the week, what season it is, or even just randomly. When choosing a home to rent, it pays dividends to do your research and check whether the price is double the usual rate.
But price variability can also be location dependent.
From the plots above it is clear that not only are listing prices in Boston higher on average than in Oakland, but the seasonal fluctuations and price hikes are more exaggerated as well. On top of this the average listing price also exhibits a steady increase throughout the year, unlike in Oakland where prices stay relatively consistent.
Something worth bearing in mind for your next holiday. One thing is for sure though— I will be avoiding May Day in Boston this year!
4. The TV and gym facilities you won’t use will cost you more than you think
Listings offer all kinds of amenities. Everything from the essential bed sheets to the more extravagant infinity pool with built-in bluetooth sound system. But which ones have the biggest influence on the price of a listing?
Using a trained supervised machine learning model, I was able to predict the price of a listing with 70% accuracy using only information about the host’s account, property and its amenities. The most important features in this prediction included listing type, accommodation capacity and number of reviews as expected.
But also high up on the list of price influential features was having access to gym facilities, a dishwasher and even a TV.
Given that I am writing this during yet another pandemic lockdown it is hard to imagine life without TV, but going on holiday is all about exploring and experiencing new places. So if you are anything like me and you like saving money and spending as little of your holiday time indoors as possible, then avoid the listings with HDTVs and your favourite streaming services.
5. Always read the reviews
The numeric rating of a listing on Airbnb is usually a good indication of how much other people enjoyed their stay. But the words used in the reviews of homes can do a better job at providing this information, as well as a unique insight into key aspects of the home or place.
Through the use of natural language processing (NLP) I was able to identify words that were common to reviews in both Boston and Oakland, such as “clean”, “comfortable” and “quiet”. Words unique to Boston included “airport” and “small”, whereas “safe” and “family” were used almost exclusively in Oakland reviews.
Analysing the words used in reviews therefore enables you to gain a qualitative understanding of the listing, in addition to the quantitative measure provided by numeric ratings. But it can also allude to the sentiment of the reviewer.
The vast majority of reviews in Boston and Oakland have a sentiment polarity score greater than zero, which means that they are pretty positive and that the guests enjoyed their stay. So if you haven’t already been, these two places seem like a good bet for your next holiday.
If the Airbnb share price is anything to go by, it seems like our favourite home sharing platform is here to stay. So when the pandemic is but a distant memory, remember these 5 tips when planning your next trip:
- Look out for descriptions that use unique words and clearly indicate that the host knows the area well.
- Check that the home you are sharing is actually shared and not just a full-time rental.
- Keep an eye on price history and fluctuations to ensure you are getting the best deal.
- Avoid price sensitive amenities that you probably won’t use or need such as a TV or access to gym facilities (you are on holiday after all).
- Don’t rely on the rating, read the reviews and ensure they are positively worded.
With that, there is just one question left.
How will you use this information to save money on your next Airbnb holiday?
To see more about this analysis, see the link to my Github available here.