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Airbnb takes a bite out of the hotel market

Posted by Kevin Hartnett  January 13, 2014 01:36 PM

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Craigslist sunk the classified business and Amazon has put bookstores into bankruptcy. Now a trio of researchers at Boston University wants to know- is Airbnb going to make Marriott and Sheraton go the way of Borders and Blockbuster?

Airbnb is a pillar of the so-called "sharing economy," and it facilitates short-term rentals between home owners with a guest room (or a whole house or apartment) to spare and travelers looking for less expensive or homier alternatives to hotels. Since it began operating in 2008, Airbnb has processed more than 10 million bookings. In order to figure out what effect, if any, all those peer-to-peer transactions have had on the hotel industry, Georgios Zervas, Davide Proserpio, and John W. Byers analyzed hotel revenue data in Texas from 2008-2013: They compared revenue data from Texas cities where Airbnb operates to cities where it does not (or had not yet started operating), and also compared revenue totals from different segments, like business, luxury, and budget hotels. All told, they found that for every 1 percent increase in the number of Airbnb bookings, there is a .05 percent decrease in hotel revenue. They found that low-end hotels are especially vulnerable to being replaced by Airbnb accommodations, while hotels that cater to business and luxury travelers have less to worry about. And, if the hotel lobby decides to mount an offensive against Airbnb, the BU researchers have a recommendation: Push for laws that prohibit people from renting out houses they don't actually live in.

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About brainiac Brainiac is the daily blog of the Globe's Sunday Ideas section, covering news and delights from the worlds of art, science, literature, history, design, and more. You can follow us on Twitter @GlobeIdeas.
Brainiac blogger Kevin Hartnett is a writer in Columbia, South Carolina. He can be reached here.

Leon Neyfakh is the staff writer for Ideas. Amanda Katz is the deputy Ideas editor. Stephen Heuser is the Ideas editor.

Guest blogger Simon Waxman is Managing Editor of Boston Review and has written for WBUR, Alternet, McSweeney's, Jacobin, and others.

Guest blogger Elizabeth Manus is a writer living in New York City. She has been a book review editor at the Boston Phoenix, and a columnist for The New York Observer and Metro.

Guest blogger Sarah Laskow is a freelance writer and editor in New York City. She edits Smithsonian's SmartNews blog and has contributed to Salon, Good, The American Prospect, Bloomberg News, and other publications.

Guest blogger Joshua Glenn is a Boston-based writer, publisher, and freelance semiotician. He was the original Brainiac blogger, and is currently editor of the blog HiLobrow, publisher of a series of Radium Age science fiction novels, and co-author/co-editor of several books, including the story collection "Significant Objects" and the kids' field guide to life "Unbored."

Guest blogger Ruth Graham is a freelance journalist in New Hampshire, and a frequent Ideas contributor. She is a former features editor for the New York Sun, and has written for publications including Slate and the Wall Street Journal.

Joshua Rothman is a graduate student and Teaching Fellow in the Harvard English department, and an Instructor in Public Policy at the Harvard Kennedy School of Government. He teaches novels and political writing.


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