Airbnb is a community based on connection and belonging -- many hosts on Airbnb are everyday people who share their worlds to provide guests with the feeling of connection and being at home; Airbnb strives to connect people and places. Among our efforts to connect guests and hosts, we provide tools to enable hosts to set competitive prices, which helps improve affordability for guests while helping hosts get more bookings. We also personalize the guest experience to show them the listings that match their needs. To help inform these efforts, we combine economic modeling and causal inference techniques to understand how guests book stays based on the prices hosts set, among other factors, and how that preference varies across different guests and listings. Such understanding helps us identify opportunities for Airbnb to support the marketplace and better connect guests and hosts. For example, understanding how much guests respond to different prices helps optimize the tools that we provide to hosts, in order to enable hosts to choose and set competitive prices that further balance demand and supply. As another example, understanding heterogeneity in guest preferences helps us personalize the guest experience and better match them with the listings that meet their needs, based on how much they respond to different prices and other factors.
In two-sided marketplaces with heterogeneous products, it is important to understand the causal relationship between additional supply and marketplace outcomes, such as the total quantity transacted or transaction value in the marketplace. This paper studies a causal machine learning approach to estimating this relationship across product segments. We use the Airbnb marketplace as an example, focusing on the impact of additional listing supply on total bookings, but the methodology applies to other two-sided marketplaces. Our approach combines double/debiased machine learning with a hierarchical Bayesian framework that leverages pre-existing knowledge as priors. We construct tractable and informative features for the model by leveraging measures of product segment similarity from the geospatial literature. We find that such a model provides plausible estimates of the marketplace returns to additional supply and strong out of sample performance.
Travelers increasingly ask large language model (LLM) assistants which hotel to book, making these systems gatekeepers of property visibility -- yet what moves their recommendations is undocumented. We conduct a pre-specified algorithm audit using a randomized choice-based conjoint: across personas, prompt templates, and twelve open-weight and proprietary models, assistants choose among five hotels whose guest rating, review volume and recency, management response, chain affiliation, price, eco-certification, and list position are independently randomized. We estimate the average marginal component effect of each signal on the probability of recommendation. Guest rating and price dominate (a top rating raises selection by 31.6 percentage points; a high price lowers it by 30.0), reproducing human valence-and-price primacy but over-weighting eco-certification and ignoring management response. List position -- a content-free artifact -- shifts recommendations causally, worth about $12 per night. Stated reasons track revealed weights imperfectly. The findings ground generative engine optimization and the accountability of AI infomediaries in causal evidence.
Mirza Samad Ahmed Baig, Syeda Anshrah Gillani, Asher Ali
Personalization in two-sided marketplaces relies heavily on user-level features, yet for platforms with infrequent, high-consideration purchases, a large fraction of users lack sufficient history for effective recommendation, spanning both paid and organic channels. At Airbnb, a substantial share of search requests comes from logged-out or first-time users, with this challenge especially pronounced on paid-channel landing pages, leaving traditional user-level features unavailable for a large fraction of traffic. Privacy regulations and increasing restrictions on third-party cookies further limit identifier-based tracking for non-essential use cases. This paper introduces Proximity Features, a privacy-compliant feature system that groups users by geographic proximity using geo-IP data and an adaptive clustering algorithm, producing aggregated user-level signals for groups of approximately 1,000 nearby users without requiring a persistent individual identifier at inference time. Privacy is preserved by design: the pipeline operates on consented, aggregated data only within consent-gated privacy controls. The system is deployed in production at Airbnb, serving multiple surfaces including marketing landing pages and destination recommendation, with engagement emails integration under way. Online A/B experiments demonstrate statistically significant lifts in bookings, with the largest gains observed among users with absent or stale history.