COVID-19, social distancing and guests' preferences: impact on peer-to-peer accommodation pricing

This paper investigates how guests' preferences in peer-to-peer (P2P) accommodations changed during the COVID-19 summer season. Specifically, we test the importance of attributes that better allow for preserving the social distancing. To this end, we adopt a semi-parametric hedonic pricing model. We take the city of Madrid as a compelling case study of an important tourist destination severely hit by the crisis. We show that guests' marginal willingness to pay for social distancing characteristics has changed from August 2019 to August 2020. In particular, we find that whereas listings with kitchen amenities increase 15.2 percentage points their premium price in August 2020 with respect to the previous year, the marginal willingness to pay for size-related characteristics decreased by 2.7 percentage points. Results are robust to sample and time composition. This study provides meaningful findings of a shift in guests' tastes towards social distancing attributes on P2P accommodations.