Airbnb Now Uses Analytics To Boost Bookings

In a competitive marketplace — with more startups joining the space every year — Airbnb is trying to keep its business model fresh.

To do so, it has enlisted the help of Spark, an analytics tool, with the intention of assisting its core users that list properties in knowing how to price their units on the site. With Spark, those bookings can now benefit from pricing indicators from 5 billion data points a day, The Wall Street Journal reported. The company hopes that will bring more bookings, which in turn means more revenue for the company that takes 3 percent from each deal.

“It’s a very powerful tool, but it’s more like a hobbyist sports car: If you know how to tune it, it goes very fast, but it’s not for the faint of heart,” Airbnb software engineer Hector Yee told WSJ.

Spark is the brainchild of a University of California, Berkeley project and is keeping up with the modern trends of marketplaces that are turning to analytics to drive their decision-making in order to keep up with revenue expectations. Gathering real-time data has been used in everything from the retail market to the hospitality and rental industries.

Yee said that he tested Spark by running data sets on a website to see how it could be tweaked to match the algorithm needs to benefit Airbnb’s listing customers. He explained that the home rental service’s attempts to provide its property leasers with tips on how to list their property, what their location is worth, what market prices are for that area and guidance on how a lister is more likely to get their property booked. Airbnb claims that when its formula is followed, those leasers are four times more likely to secure a booking, WSJ reported.

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