Open AccessA Game Theory approach to Airbnb and hotels competition
Author(s) -
Juan Pedro Aznar,
Josep Maspera,
Xavier Quer
Publication year - 2019
Publication title -
european journal of tourism research
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.467
H-Index - 16
eISSN - 1314-0817
pISSN - 1994-7658
DOI - 10.54055/ejtr.v21i.362
Subject(s) - renting , profitability index , competition (biology) , business , marketing , service quality , microeconomics , revenue management , revenue , game theory , value (mathematics) , hospitality industry , industrial organization , service (business) , economics , tourism , computer science , finance , ecology , machine learning , political science , law , biology
The rapid growth of Airbnb listings has represented a challenge for hotels. While most of the existent literature has focused on empirically measuring the impact of Airbnb listings on hotels’ revenues and profitability, the present research is one of the first attempts to develop a theoretical framework based on game theory to model a hotel’s best response in terms of investment to improve the quality of service and pricing strategy. The model results suggest that hotel location, the average value of long-term rental contracts and the density of available apartments influence the hotel strategy.