Bad reviews push Airbnb hosts to rethink their positioning, study finds

A new study from The University of Manchester has revealed that bad reviews often push Airbnb hosts to change the way they position their properties, sometimes with surprising results.

The research, carried out with colleagues from the University of Oxford and the University of Alberta, looked at more than 80,000 Airbnb hosts across major U.S. cities. It found that when guests left negative reviews, hosts were much more likely to switch the category of their property—for example, moving a listing from "loft" to "apartment," or from "tiny house" to "cottage."

The study shows that these changes often happen not because hosts are constantly fine-tuning their positioning, but because they are reacting to complaints—in other words, hosts don't usually rethink how their properties are categorized unless something goes wrong.

The article, titled "Right on Cue? Category-Switching in Online Marketplaces," is published in the Strategic Management Journal.

"Negative reviews are powerful—they don't just influence potential guests, but they also make hosts question whether they've positioned their property in the right category," said Dr. Karl Taeuscher from Alliance Manchester Business School, the lead author of the research. "If customers say a listing isn't what they expected, hosts often switch category in the hope of avoiding more complaints."

The research found that the effect is strongest in categories where customers have diverse and sometimes conflicting expectations. For example, a "villa" or "loft" may mean very different things to different people, while a "houseboat" or "tent" comes with more obvious expectations. In these ambiguous categories, hosts were particularly likely to reposition their property after receiving poor feedback.

Interestingly, when hosts did make a switch, they usually chose categories that were close to their original one. Few hosts took the risk of moving their property into a completely different type. Instead, they tended to opt for categories that accommodate a wider range of features.

The study highlights how small businesses and individuals, like most Airbnb hosts, often don't have the time or resources to constantly rethink their positioning strategies—instead, they tend to act only when problems arise.

The findings matter beyond Airbnb. Many online platforms, from Amazon to Etsy, rely on categories to help customers navigate. If businesses use categories that don't quite fit, it can create mismatches between what buyers expect and what they get. This study suggests that finding the right category requires businesses to be receptive to customer feedback and open to revising their initial choice.

"Categories play a central role in how consumers form expectations about products and services, and choosing a category that sets realistic expectations is an important aspect of any positioning strategy. When businesses get the category wrong, it can hurt their customers' experience - but our research shows that negative customer feedback can help them to recognize these mismatches and adjust their positioning," says Dr. Karl Taeuscher.