HA NGOC DIEP 1

PRICING ANALYSIS

Determining a right price strategy requires the knowledgeable analysis in which the researcher should
be flexible and abilities to choose the relevant and data and applying the right math calculation as well
as suggesting hypothesis during the research.

In this assignment, I really desire to perform much more my abilities to deal with the numbers and using
the application for the quantitative analysis, however the limited time is the only one disadvantage for
me. Therefore, the basic math calculations in Excel application were used to define the relation between
price and each factor (Availabilities, neighborhoods, locations, amenities). If the time is flexible, I would
like to approach the data via the SPSS software to get the further results.

I. CORRELATION BETWEEN PRICE AND AVAILABILITY

There are 38 regions in the Great Sydney, 18 regions were selected and applied to the research,
including 10 regions with the highest number of listings and 8 regions with the lowest of listings as the
group 1 and 2, representatively.
The correlation between price and availability is totally different for each group.
Group 1: R = 0,85 means the price and availability are positive, linearly correlated (TABLE 1) while this
relation is negative within group 2 (R =-0,41, TABLE 2). The chart1 and 2 also perform the relation
between price and availability, in which the high percentage of availability leads to the high level of price
in group 1 and the low level of price in group 2.

TABLE 1: CORRELATION BETWEEN PRICE AND AVAILABILITY OF GROUP 1

Price per night ($) Availability (%)
Marrickville 122 20,7
Sydney 175 24,6
Randwick 188 20,6
North Sydney 204 26,9
Leichhardt 219 26,3
Waverley 243 19,6
Manly 280 23
Warringah 266 27,1
Woollahra 299 25,3
Pittwater 497 44,2

TABLE 2: CORRELATION BETWEEN PRICE AND AVAILABILITY OF GROUP 2

Price per night ($) Availability (%)
Fairfield 83 45,6
Bankstown 94 50,4
Camden 96 61
Holroyd 97 44,7
Strathfield 103 32,5
Liverpool 126 62,9
Campbelltown 135,5 62,1
Hunters Hill 272 31,3
CHART 1: Correlation between price and availability of 10 neighborhoods where contains the highest
number of listings
600 50
44.2
45
500
497 40

35
Price per night ($)

400

Availability (%)
26.9 27.1 30
26.3 25.3
24.6
300 23 25
20.7 20.6 299
19.6 280
266 20
243
200 219
204 15
188
175
10
100 122
Price per night
5 ($)
Availability (%)
0 0
Linear (Availability (%))
Marrickville Sydney Randwick North SydneyLeichhardt Waverley Manly Warringah Woollahra Pittwater
 CHART 2: Correlation between price and availability of 8 neighborhoods where contains the
lowest number of listings
300 70
62.9 62.1 272
61
60
250
50.4
45.6 50
200 44.7
Price per night ($)

Availability (%)
40
150 32.5 31.3
135.5
126
30
97 103
100 94 96
83
20

50
Price per night10($)
Availability (%)
0 0
Linear (Availability (%))
Fairfield Bankstown Camden Holroyd Strathfield Liverpool Campbelltown Hunters Hill

Furthermore, this relation is also considerably different for each type of room. For example, group 1, the price and availability for entire
home/apartment and private room are positive, however, the relation is stronger with entire home/apartment than private room, dedicated to
R=0,78 and 0,56, representatively. The relation is negative for group of shared room with R = -0,32 (
 CHART 3: Entire home/Apartment
600 50.0000
43.9
45.0000
500
40.0000
35.0000
400
26.9 27.4 27.1 30.0000
25.1 26.0
Price per night ($)

AVailability (%)
300 23.2 25.0000
21.5 20.9 21.1
20.0000
200
15.0000
10.0000
100
5.0000
Price per night ($)
173 217 264 251 276 317 338 317 381 539Availability (%)
0 -
le ey ck ey t ra er Linear (Availability (%))
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 CHART 4: Private room
160 50
47
45
140 134
40
120 116
35
104
99 101 101
100 31
93 30
29
Price per night ($)

Availability (%)
82
80 77 25 25
70 22
22
20 20 20 20
60
16 Price per night ($)
15
40 Availability (%)
10
Linear (Availability (%))
20
05

0 00
Marrickville Randwick Leichhardt North Sydney Warringah Waverley Manly Sydney Woollahra Pittwater
 CHART 5: Shared room
300 40.0000

35.0000
250
30.0000
200
25.0000
Price per night ($)

150 20.0000

Availability (%)
15.0000
100
10.0000
Price per night ($)
50
5.0000
Availability (%)
Linear (Availability (%))
0 -
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Conclusion, the correlation between price and availability is positive or negative depends on the type of room , the regions, the number of
listings. The more listings each region has, the correlation is more positive.
 II. THE RELATION BETWEEN PRICE AND AMENITIES.

Based on the strategic capabilities, there are two main types of capabilities, including threshold
and distinctive capabilities which strongly define the price of each listing. The more distinctive
capabilities the listings have, the higher price will be determined. For the details, the threshold
capabilities are those needed for an organization to meet the necessary requirements to compete
in given market and achieve parity with competitors in that market; the Distinctive Capabilities are
those that are required to achieve competitive advantage. Distinctive or unique capabilities that are
of value to customers and which competitors find difficult to imitate.

For example, the threshold capabilities are related to physical basic things such furniture,
machines, facilities: air conditioning, pool and gym, laptop friendly workspace, iron, dryer, washer,
etc. The distinctive capabilities are good location, great provided service, skill staffs, relations with
the customers, interactions which can be assessed in terms of providing a basis for achieving
sustainable competitive advantage.

The listings locates near the beach to the center will be sold with the higher price than the listing in
other places such as mountain, hills and rural sides.

The data of same room type (entire house/ apartment) from 6 neighborhoods of Sydney city are
selected into the analysis in which determine the relation between price and location as the below
table and chart. Six places are divided into 3 groups with two places of each: Camden and
Blacktown are the rural areas put into the first group far away the city center; Sydney and
Marrickvilla are the central of Sydney seen as the second group and the last group includes Manly
and Woollahra where have the wonderful beaches.

Group 1,2 and 3 has the lowest price, the highest price and the second highest price,
representative. This supports the above view about location is a competitive advantage for the
listing lead of the good price.

TABLE 3: THE DATA OF PRICE

GROUP Place Price per night ($)

Camden 143
GROUP 1
Blacktown 147
Sydney 217
GROUP 2
Marrickvilla 173
Manly 338
GROUP 3
Woollahra 381
 CHART 6: RLATION BETWEEN PRICE AND LOCATIONS
450

400 381

350 338

300
Price per night ($)

250
217
200 173
143 147
150

100

50

0
Camden Blacktown Marrickvilla Sydney Manly Woollahra

This stressed that the location is one of the factors decided the different price between similar
listings (Entire home/ apartment). The price might be influenced by seasonal reason in terms of the
price is rising to the highest level and lowest level in the summer time and winter time,
representatively. However, I would like to require more time to deal with the complex data in
InsideAirbnb and select the useful data and present the analysis in the next con-call.

I am confident that the research will be deeper if I get some professional guidance from the OYO’s
experts during working as a Business analyst in OYO company. Hopefully, this short analysis will
enable me to have a chance to move the another step in the recruitment path. Thank you for your
time to read my paper.