Fuzzy metatopics predicting prices of Airbnb accommodations

Abstract

The purpose of this study is to guide pricing policies of Airbnb accommodation rentals to reduce inefficient pricing strategies through a novel application of topic modelling and a fuzzy clustering. In particular, the method proposes the application of Structural Topic Modelling, which explains a set of observations from latent topics. The associations between topics by Fuzzy C-Means Clustering are analysed to obtain new, more compact representations of topics (i.e., metatopics). This research identifies 15-metatopics related to Airbnb accommodations based on location and connectivity, enjoyment of domestic and everyday services, and the possibility of more authentic local experiences, among others. The influence of key metatopics on the price of Airbnb accommodations is determined by applying Extreme Gradient Boosting (an efficient and scalable implementation of gradient boosting framework) and Shapley Additive Explanations values. To sum up, our research provides an explicit contribution of user-generated content to promote the development of mutually beneficial relationships between guests and hosts, and detects future lines of research and practical and conceptual implications of the findings.