Substitution among hotels and P2P accommodation in the COVID era: A spatial dynamic panel data model at the listing level

Presenter Information

Rafael Suárez-Vega, University of Las Palmas de Gran CanariaFollow
Jorge V. Pérez-Rodríguez, University of Las Palmas de Gran CanariaFollow
Juan M. Hernandez, University of Las Palmas de Gran CanariaFollow

Location

Gran Canaria

Participation

Attend the conference at Gran Canaria in person.

Type of Submission

Paper Presentation

Short Abstract

This paper studies the demand of the Airbnb’s listings in the Canary Islands analysing not only whether peer-to-peer (P2P) accommodation substitutes or complement the traditional accommodation, but also the spatial correlation between listings. Moreover, we analyse the effect of the COVID-19 pandemic crisis in this lodging industry. To do this, we use a spatial dynamic panel data demand model for occupancy rates related to prices of Airbnb listings, prices of competitors (hotels and apartments) and the income. Results indicate that there is positive autocorrelation between occupancy rates, own-price elasticities are inelastic and positive cross-price elasticities, indicating that they are substitute goods. Income elasticity is lower than one and not statistically significant indicating that the demand for tourism in the Canary Islands is insensitive to the economic situation in the origin countries. COVID-19 effects are an increase of the elasticity and the substitution effect of hotels.