Platform Home Sharing on Jeju Island

Abstract

The sharing economy has been heralded as a social movement that is transforming consumer behavior norms. The purpose of this study was to empirically define the presence of platform home sharing on Jeju Island and to analyze this new market within the theory of revealed preferences to see if platform home sharing is driven by economic or social-experiential considerations. Are platform home sharing guests on Jeju Island exhibiting social or utilitarian consumer behavior through their purchase decisions? Web scraping and data mining techniques were employed to obtain a reliable data set, and multivariate regression analysis was employed to estimate the most important determinants in platform home sharing businesses in the local context. In order to further explore the relationships between property listing characteristics and the number of reviews as the dependent variable, classification and regression trees were employed to account for the nonlinearity of the data. The results show that platform home sharing on Jeju Island is widespread across the entire island with heavier concentrations on the northeast side and a thinner distribution on the south west side. Consequently, latitudinal coordinates were more effective determinants of demand than longitudinal. Among the 31 listing property types. "houses" which are priced below 140,000 KRW per night are more likely to be rented than any other type. Furthermore, the host speaking additional languages to Korean is perceived as an asset in terms of the number of reviews. English and Russian are better determinants of demand than other foreign languages. The platform home sharing guests are most strongly motivated by low cost and entire properties, rather than shared spaces. Shared rooms were revealed as least preferred among the guests with less than 10% of the total listings. Entire homes, however, occupied more than 50% of the entire population in terms of listings and 60% of the number of reviews. This shows that the new market of platform home sharing on Jeju Island is driven by traditional economic forces of maximizing satisfaction and minimizing cost, and not the alternative social and or experiential collaborative consumption motivations commonly associated with the Sharing Economy. Further inferential analyses on hosts who list multiple properties as well as sensitivity analyses on the efficacy of satisfaction as a determinant of demand were performed. The analysis yielded that hosts who list multiple properties did not directly receive a higher average number of reviews, however, they did receive a lower overall level of satisfaction. As the presence of platform home sharing on Jeju island continues to grow, policy makers and hoteliers would benefit from understanding a new potential source of competition in the market for tourism accommodation. Several implications are discussed in terms of the analyses as well as limitations and directions for future research on platform home sharing.