COVID-19 and Guests' Preferences in Short-Term Rentals: Evidence from Madrid

This paper investigates how guests' preferences in peer-to-peer accommodations changed during the COVID-19 summer season. To this end, we adopt a semi- parametric hedonic pricing model and test the importance of attributes that better allow for social distancing. We take the city of Madrid as a compelling case study of an important tourist destination severely hit by the crisis. We show that guests' marginal willingness to pay for social distancing characteristics has changed from August 2019 to August 2020. In particular, we find that whereas those listings that have kitchen amenities have a premium price of around 20.4% in August 2020, which represents a 15.2 percentage point increase with respect to the previous year, the marginal willingness to pay for size-related character- istics decreased in 2.7 percentage points. Results are robust to sample and time composition.