Concerns about crime and safety have a dramatic impact on the behavior of Airbnb customers, according to new research co-authored by Liad Wagman, Ph.D., Dean of the RPI Lally School of Management. 

In an analysis of nearly 5 million reviews left by Airbnb guests, Wagman and his colleagues found that a short-term rental property’s occupancy rate and rental price dropped by significant amounts after a guest left a review mentioning safety concerns at or around the property: occupancy rates fell by anywhere from 1.5 to 2.4 percent, while average nightly prices dropped by roughly 1.5 percent. 

These negative safety reviews influenced the behavior not only of potential future customers, but also of the people who wrote them. A customer who mentioned concerns about crime and safety in the neighborhood around a property, for instance, became 60 percent less likely to ever use Airbnb again.  

“To see the effect of these dynamics play out in action is always fascinating to me," Wagman said. “Given that humans have different preferences, and that information transmittal is imperfect, it’s unsurprising that the effect of self-experience is larger than that of reading a critical review that resulted from it.” 

Worries about safety within a property — say, a broken step or a slippery tub — also reduced customers’ willingness to return to the platform, but by a more modest amount. 

The study also found that when people with neighborhood safety concerns did return to the platform, they tended to book properties in areas with lower rates of crime. 

The study, co-authored by Aron Culotta of Tulane, Ginger Zhe Jin of the University of Maryland, and Yidan Sun of Binghamton University, was published in the journal Marketing Science. 

Overall, the researchers found that safety-oriented reviews were rare: only about 0.5 percent of customer reviews mentioned safety concerns. But those reviews tend to be more negative in sentiment than the typical customer review, giving them an outsize impact on the behavior of subsequent would-be customers. 

The findings illustrate a delicate balancing act digital platforms have to perform, particularly those that rely heavily on user reviews: while highlighting negative experiences can help consumers make more informed choices, too much emphasis can drive customers away completely.  

The team ran several simulations calibrated by their empirical analysis to test how these dynamics play out in the market. They found that if a platform suppressed negative safety reviews completely, customers might assume that safety information was being hidden, and become more wary of using the platform in general. 

Conversely, while more transparency around safety issues could lead to fewer bookings of impacted properties in the short term, in the long run such a policy could boost user trust and draw more people to the platform, offsetting the short-term losses. 

“Platforms with the competitive space to focus on long-term objectives may benefit from a higher level of transparency, which can be facilitated by making information that is relevant to their buyers’ decision-making more readily available,” Wagman said. “Doing so facilitates trust and helps incentivize sellers to work to improve the quality of their offerings, as well as help shape sellers' decisions to enter a market (e.g., offer their listings) in the first place.”