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But that's exactly the point. Only way for AirBnB to grow would be that gap that AirBnB is occupying to grow. This could be created by an increase in "the mar

by Naritai 10y ago

But that's exactly the point. Only way for AirBnB to grow would be that gap that AirBnB is occupying to grow. This could be created by an increase in "the market for people staying places when they travel", or a shrinking of the market for "the market for people staying in hotels". That 100% of the growth is coming from the former is very suspect.

dlss 10y ago
If true, it would also mean there was an increase in bookings on AirBnb relative to hotels. Which would imply: > Option 1. They didn't lose market share across the board, and instead cherry picked non-representative markets for their 13 region hotel comparison. (from higher up this comment chain)
ghaff 10y ago
And it's easier for me to believe that the market for, say, app-summoned cars is more elastic than the market for renting a room while traveling. In the former case, you're competing with a bunch of alternatives that you're happy to substitute given a better/cheaper option. Maybe you take less public transportation or don't ask for a ride or don't drive yourself and use Uber. AirBnB, on the other hand... Yes, some people will travel more/stay longer given cheaper lodgings but there are a lot of other costs associated with travel (including, for most, vacation time) so it's harder for me to believe that AirBnB will dramatically increase lodging days to the same degree that Uber could potentially increase taxi or private car-like service miles.
- GFischer 10y ago
  You would be surprised. I've personally increased lodging days a lot due to AirBnB being cheaper (and subjectively better) than hotels. Also, AirBnB doesn't only compete with hotels... a lot of the market share in my country (Uruguay) was actually taken from real estate agencies for short-term vacation rentals, not hotels. Edit: same in Portugal and Ireland, see https://news.ycombinator.com/item?id=12732874 https://news.ycombinator.com/item?id=12732874
  - ghaff 10y ago
    >Also, AirBnB doesn't only compete with hotels... a lot of the market share in my country (Uruguay) was actually taken from real estate agencies for short-term vacation rentals, not hotels. That's not market elasticity though. That's shifting from one booking agency to another. When my family rented a vacation home we used various small vacation home services. I have no doubt we'd consider using AirBnB today if we still had the place. I don't doubt that lower prices, where they exist, make a difference at the margins. I'm just skeptical that the effect is big. And, as the business traveler that I am most of the time, I mostly want predictability and a 24-hour desk from a hotel.
bandrami 10y ago
The US hotel industry had about $200 billion in revenues in 2015. Airbnb processed about $200 million in payments, or 0.1% of the hotel industry's revenue. At that scale, doubling or tripling your revenue doesn't even appear as noise to the hotel industry.
- user5994461 10y ago
  Thus AirBnB is two orders of magnitude smaller than booking.com and hotels.com

by Naritai 10y ago

dlss 10y ago

If true, it would also mean there was an increase in bookings on AirBnb relative to hotels. Which would imply: > Option 1. They didn't lose market share across the board, and instead cherry picked non-representative markets for their 13 region hotel comparison. (from higher up this comment chain)

ghaff 10y ago

And it's easier for me to believe that the market for, say, app-summoned cars is more elastic than the market for renting a room while traveling. In the former case, you're competing with a bunch of alternatives that you're happy to substitute given a better/cheaper option. Maybe you take less public transportation or don't ask for a ride or don't drive yourself and use Uber. AirBnB, on the other hand... Yes, some people will travel more/stay longer given cheaper lodgings but there are a lot of other costs associated with travel (including, for most, vacation time) so it's harder for me to believe that AirBnB will dramatically increase lodging days to the same degree that Uber could potentially increase taxi or private car-like service miles.

GFischer 10y ago
You would be surprised. I've personally increased lodging days a lot due to AirBnB being cheaper (and subjectively better) than hotels. Also, AirBnB doesn't only compete with hotels... a lot of the market share in my country (Uruguay) was actually taken from real estate agencies for short-term vacation rentals, not hotels. Edit: same in Portugal and Ireland, see https://news.ycombinator.com/item?id=12732874 https://news.ycombinator.com/item?id=12732874
- ghaff 10y ago
  >Also, AirBnB doesn't only compete with hotels... a lot of the market share in my country (Uruguay) was actually taken from real estate agencies for short-term vacation rentals, not hotels. That's not market elasticity though. That's shifting from one booking agency to another. When my family rented a vacation home we used various small vacation home services. I have no doubt we'd consider using AirBnB today if we still had the place. I don't doubt that lower prices, where they exist, make a difference at the margins. I'm just skeptical that the effect is big. And, as the business traveler that I am most of the time, I mostly want predictability and a 24-hour desk from a hotel.

bandrami 10y ago

The US hotel industry had about $200 billion in revenues in 2015. Airbnb processed about $200 million in payments, or 0.1% of the hotel industry's revenue. At that scale, doubling or tripling your revenue doesn't even appear as noise to the hotel industry.

user5994461 10y ago
Thus AirBnB is two orders of magnitude smaller than booking.com and hotels.com