April 21, 2016 – “Sharing economy” markets have flourished recently, particularly within the field of travel and tourism. Taxi services such as Uber, dining services such as Eatwith and accommodation services such as Airbnb offer an alternative for people seeking low-cost services and direct interactions with the local community.
The prominent appearance of sellers’ photos on sharing economy platforms, such as Airbnb, triggered a team of researchers from the Robert H. Smith Faculty of Agriculture, Food and Environment at The Hebrew University of Jerusalem, to investigate whether and how consumers’ decisions are affected by personal photos of Airbnb hosts.
“While the effect of product attributes such as apartment size and location is rather obvious, consumers’ responsiveness to seller attributes such as reputation and personal photos has yet to be studied,” said Professor Aliza Fleischer, the Yekutiel X. Federmann Chair in Hotel Management in the Department of Environmental Economics and Management at Hebrew University.
The research, which appear in the journal Tourism Management, comprised two complementary studies:
In the first study, researchers collected the revealed data of all Airbnb’s listings in Stockholm, Sweden, including property size and location, pictures of the property, price, and customer reviews. They presented the personal photos of the Airbnb hosts to 600 research participants and evaluated their first impression of the photos. They performed hedonic price analysis – a model that estimates the extent to which each of the factors comprising the selling good affects the price – combined with ratings of the hosts’ trustworthiness and attractiveness as perceived from their personal photos.
The study found that hosts who are perceived from their photos as more trustworthy enjoy a price premium over their counterparts who are perceived as less trustworthy. In other words, the more trustworthy the host is perceived to be from his/her photo, the higher the price of the listing and the probability of its being chosen.
Surprisingly, the research also found that online-review scores had no effect on listing price or likelihood of consumer booking. The researchers suggested this may be the result of exaggerated reviews that neutralized their effect.
“Unlike Facebook or LinkedIn, the person is not the ‘selling product’ here. On Airbnb the focus is on the property and its attributes, but even so — we found that the profile pictures of the hosts are critical to their business success,” said Dr. Eyal Ert from the Department of Environmental Economics and Management at Hebrew University.
In the second study, researchers conducted a controlled experiment, where participants were presented with a series of made-up Airbnb profiles, using photos of actors.
The study found that the level of hosts’ perceived trustworthiness, mainly as inferred from their photos, directly affects consumers’ choices. Its effect is stronger than that of other visual attributes, and visual-based trust has a stronger impact on consumers’ choice than reputation.
Another interesting point that was found is that the participants were not aware of the important role the photos play in their choice. When asked what were the important factors affecting their decision, very few mentioned the facial photographs of the hosts.
With the rapid growth of the sharing economy, especially in tourism-related services, there is a need to further investigate the trust mechanisms upon which this economy is built, say the researchers.
“The results of our research imply a strong need for trust in sharing economy platforms. Different rules and consumer decision-making are at play here, and a fuller examination of these is still needed to shed light on how this economy really operates,” said Professor Fleischer.