A Study of Airbnb in London: The Effect of the Covid-19 Pandemic on the Strategies of Hosts and the Consequential Impact on Economic Returns.

The outbreak of the Covid-19 pandemic destabilised all industries, severely impacting tourism and hospitality. As a result, the peer-to-peer (P2P) accommodation sector, originally on a growth trajectory, was suddenly hit with massive losses. By focusing on the impact of the pandemic on Airbnb in London, the aim of this thesis is to quantify the economic effects of the individual strategies adopted by hosts to respond to the evolving demand trends. The empirical analysis is based on a dataset of Airbnb listings in London broken down at the property-by-month level (i.e., the unit of analysis), with observations covering the period from January 2019 to December 2020. More specifically, this thesis attempts to conduct a structured analysis of the overall impact of the pandemic on the tourism and hospitality industry, on the accommodation sector and, more specifically, on Airbnb, focusing on the platform's responses to the crisis and on the evolution of travel patterns. The study follows with a descriptive analysis of Airbnb in London, with particular attention paid to the change in demand and consequential change in supply. In order to assess the impact of the pandemic, year-to-year changes in various metrics are presented, including variations in the Average Daily Rate (ADR), the Revenue Per Available Night (RevPAN) and the Occupancy Rate. Finally, an econometric model, and more specifically a difference-in-differences model, is used to assess the impact on economic performance of the strategies adopted by hosts in response to changes in demand. The model allows for the evaluation of the most successful strategies during a period of demand crisis. This study was considered particularly worthwhile and novel bearing in mind that little is known about the impact of Covid-19 on peer-to-peer accommodation, and the effects of host strategies on economic performance. The study has both theoretical and practical implications since, on one hand, it provides insights into the evolution of demand trends in peer-to-peer accommodation and, on the other, it may lead to improved crisis management strategies by understanding what the most effective responses to the pandemic have been.