The Host Canceled My Reservation! Impact of Host Cancelations on Occupancy Rate in the P2P Context: A Signaling Theory Perspective

Abstract

The business of hosts in peer-to-peer (P2P) accommodation sharing has become an important source of revenue for individuals in many economies. However, there is a dearth of studies on hosts, specifically on the factors that affect host performance (i.e., occupancy rates). Drawing on the signaling theory and the source credibility theory and using a dataset of 41 610 reviews of 7004 Airbnb listings, we investigated the impact of cancelation rate—that conspicuously signals how many times a host has canceled a pre-existing reservation—on the host occupancy rate. Furthermore, we investigate the role of source credibility signals in reducing the impact of host cancelations. The results show that host signals of reputation, responsiveness, and expertise minimize the negative effect of cancelations on the occupancy rate. Theoretically, we advance the academic literature on credibility signals in P2P platforms and their moderating role on host performance. Managerially, the study helps P2P hosts in understanding the role of signals on occupancy rate.