The impact of the opening of the Hong Kong express rail link on local airbnb short-term rentals in Hong Kong

Abstract

High-speed rail has not only made life more convenient for individuals, but it has also had a significant effect on metropolitan areas. This study aims to further our understanding of Airbnb's distinctive function within urban operational mechanisms by examining the impact of the Hong Kong Rail Link (XRL) in Hong Kong's opening on the short-term rental platform as well as the market's response to changes in high-speed rail construction. Regression Discontinuity Design (RDD) model and quantitative research techniques were used in this study's analysis. We have found that the introduction of the high-speed rail has had a major influence on the Airbnb industry by gathering and examining housing data from Airbnb for the years 2016 and 2019. Firstly, the high-speed rail's introduction has led to considerable changes in the distribution of housing prices across different Areas of Hong Kong. We have observed a substantial increase in price disparities between Hong Kong Island, Kowloon, and the New Territories. This phenomenon is closely related to the increased travel flexibility facilitated by high-speed rail, which subsequently affects the supply and demand of accommodations. Secondly, the policy of high-speed rail construction has also brought about changes in the number of Airbnb listing reviews. An increase or decrease in the number of reviews directly reflects tourists' interest and satisfaction with accommodations, thereby affecting the market competitiveness of these accommodations. The findings of this paper have important implications for policy makers and industry practitioners. The government can use these data to adjust relevant policies to effectively respond to market changes and promote the balance between housing supply and demand. Industry practitioners can use these findings to develop more effective business strategies and enhance the market competitiveness of their listings. Investors can also benefit from these discoveries by gaining a more accurate understanding of market demand, thereby enabling them to make informed investment decisions.