Optimal distinctiveness of short-term rental property design

Abstract

The short-term rental market remains highly competitive, requiring that hosts should identify effective strategies to position their products for desirable performance. This study investigates the optimal balance beyond dyadic choice between differentiating from or conforming to competitors, in the dimensions of properties’ functional and aesthetic design. We hypothesize U-shaped distinctiveness-performance relationships considering high legitimacy pressure and low strategy effectiveness in the short-term rental context. Moreover, the moderating effects of factors including online review volume and listing age are examined. Analyzing a sample of 99,757 Airbnb listings in Texas, the findings reveal different patterns of product positioning between functionality and aesthetics. The moderate degree of distinctiveness in functionalities leads to the worst performance while in aesthetics generating the best outcome. This study contributes to the hospitality literature by introducing and testing optimal distinctiveness within the short-term rental market. The findings also provide positioning guidance for short-term rental listings under different conditions.