Customized Regression Model For Airbnb Dynamic Pricing

Authors:
Peng Ye Airbnb
Julian Qian Ant financial
Jieying Chen Airbnb
Chen-Hung Wu Airbnb
Yitong Zhou Airbnb
Spencer De Mars Airbnb
Frank Yang Airbnb
Li Zhang Airbnb

Introduction:

This paper describes the pricing strategy model deployed at Airbnb, an online marketplace for sharing home and experience.

Abstract:

This paper describes the pricing strategy model deployed at Airbnb, an online marketplace for sharing home and experience. The goal of price optimization is to help hosts who share their homes on Airbnb set the optimal price for their listings. In contrast to conventional pricing problems, where pricing strategies are applied to a large quantity of identical products, there are no “identical” products on Airbnb, because each listing on our platform offers unique values and experiences to our guests. The unique nature of Airbnb listings makes it very difficult to estimate an accurate demand curve that’s required to apply conventional revenue maximization pricing strategies.

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