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Learn how Armchair Airbnb expertise is beaten by MBA behavioural science


#1

I have been studying for the past couple of years at Warwick University Business school.

Part of my reason to be there was to learn what is the best advice for business based on real-world experience rather than guesswork. Here’s a quick 3-minute read of some of my lectures applied to Airnb. It essentially details how quick thinking “common sense” is often wrong. Particularly when it comes to guessing people’s behaviours.

As you lovely people are all Airbnb practitioners, I’d love to hear what frustrates you the most about friendly (or unfriendly) advice from third parties that you think is wrong?

Paul


#2

Giving you a D- here Paul, you forgot to attach anything :wink:

JF


#3

Yep, I actually wanted to read your study. Please do send a link.


#4

My bad! Here is my link…


#5

“But what it tries to explain is that running an Airbnb is more art than science”

Now that I do agree with. In fact, running an Airbnb at times mean you disregard not only science, but logic and common assumptions like my guest can read, my guest can read and retain information…

Maybe running an Airbnb could be described as more performance art, than science!

JF


#6

Strangely enough there is work by a Pine and Gilmore on the “experience economy” that would describe running an Airbnb is just like a stage performance.

They have written a book about the subject. They argue that if you get the experience “right” you would add value to your business. I’ve certainly experienced higher returns since applying some of these ideas.

I was thinking of unpacking this for another article about Airbnb next.


#7

I can’t think of any frustrating advice I’ve gotten, other than someone suggested adding a cushy upholstered chair, which there is no room for in my 315 sq ft suite.
I think designing the experience depends on your client type. If you get tourists, maybe it is good for the space to reflect the character of the location and its attractions, even to the point of a bit of kitsch. In my rental, you can drink out of mugs with the US presidential seal and play with little models of the US Capitol and other Washington DC buildings. You can go too far, however-- one good rating I got as a guest was that I had “engaged with the interactive features of the space.” Dude was an artist and you were invited to make designs with white and black rocks, draw on a chalkboard with colored chalks, etc. My business clients, however, are utilitarian – they mention the free parking right next to the entrance, the shower water pressure, and the toiletries they might have forgotten. I think one ineffable feature that is hard to package is that feeling that, as a guest, you are staying in the home, and amongst the belongings, of really cool/interesting/welcoming people whom you would want to hang out with! The reviews I treasure were someone saying they felt safe and cared for, and someone else saying it felt like family had prepared the room for them. So I’ve concluded that my “host character” is pretty much “Staying at Mom’s” which is quite genuine, even though I don’t actually meet most of my guests.


#8

I love the idea of a host character. I co-host for a lady who leaves pictures of her baby on the wall (they are pasted on). At first I thought it would put people off, but I found that people seem to be more respectful of the space compared to my other places. It has interested me so much I have based my dissertation on the behaviours of guests.

On the idea of chalk boards, I have another co-host who has a black board and loads of people write messages to me on it. To be fair I did kick it off with a funky welcome note.

I think my next article will be about the utilitarian guests. :grinning:

There are theories taught at my school that show how bargain hunters can be pretty destructive for the entire airbnb community (guests and hosts).


#9

Our evidence is anecdotal here of course but many posters would agree. Is there research to support these theories that you can easily link to or point me in the the right direction to find it myself?


#10

Edited from the draft of my next article. I hope you will still read it!

(Akerlof 2003) describes consumer suspicion can lead to the devaluation of all Airbnb in a paper called The Market for Lemons. This is a Nobel prize-winning literature so it’s a big read. To paraphrase, it’s about the car dealers of the 1970’s. I think it is still applicable for Airbnbs too. You can find it in PDF form here

His argument goes something like this.

Imagine an area where there are two types of Airbnb, good ones and bad ones. Let’s say a fair price for a good Airbnb is $100. The fair price for a poor one is $50. A pragmatic (bargain hunter) guest would conclude a fair price in the region is the average, $75.

Now the trouble is that now when bargain hunter goes looking for an Airbnb they see good ones being $25 too much and bad ones being $25 cheaper. So they see the cheap one as better. When they find that cheap means poor quality, confirmation bias kicks in: Airbnbs are bad. Repeated over and over the result is that all Airbnb’s lose business, good ones and bad ones.

Akerlof describes this as asymmetric information… the guest has no idea what a good Airbnb is before purchase so has to take a leap of faith. He concludes that regulation by a third party balances the lack of knowledge. I guess Air would argue their reviews do this. In the paper’s case, it recommends car dealers have a trade body or registration scheme as regulators.

I’d argue that guests (and nieve hosts) need to stop thinking as Airbnb as a commodity ie something that only competes on price. As hosts, we can do this by marketing the #experience and moving guests from what @dpfromva correctly describes as a utilitarian view. I think Air would agree with this too. But I will leave that for my article.

I try to leave my writing to “stew” a while so I can read and refine it before publishing.

That got a bit more academically wordy than I would have prefered but hopefully, you get the gist.


#11

I will. And I will read all your other links as well, which I haven’t yet. Very interesting, thank you.


#12

Thank you and My pleasure :grinning:


#13

@PaulRanson
Are you a student or a professor?
You write very well.


#14

That made perfect sense - thank you for the explanation!


#15

Sounds like a blogspam, reads like a blogspam, it is probably a blogspam


#16

Hi @TuMo I am a student studying at Warwick Business School. I am basing my final year on the study of Airbnb. Thank you for your kind comment!


#17

Hey @Giorgi what is blogspam?


#18

He’s been a member here longer than you have and has only made high quality contributions to the forum. I don’t see any links to a blog of his only to some of the best research anyone has posted here.

Why are you so angry?


#19

Isn’t he the bloke who was recently telling everyone on the internet that it was okay for guests to leave toilets in disgusting states? Maybe he’s angry because someone believed him and left him with a mucky loo :rofl:


#20

Being totally honest, having been around online forums since day dot, I have made a total prick of myself on several occasions, but I have to say that (having also read your previous posts) you appear to have surpassed even me. I hope for your families sake that this is indeed only your online persona.

Says he hoping he hasn’t made… yada yada :slight_smile:

JF


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