Abstract

https://ssrn.com/abstract=2366898
 


 



The Rise of the Sharing Economy: Estimating the Impact of Airbnb on the Hotel Industry


Georgios Zervas


Questrom School of Business, Boston University

Davide Proserpio


Marshall School of Business, University of Southern California

John Byers


Boston University - Department of Computer Science

Nov 18, 2016

Boston U. School of Management Research Paper No. 2013-16

Abstract:     
Peer-to-peer markets, collectively known as the sharing economy, have emerged as alternative suppliers of goods and services traditionally provided by long-established industries. We explore the economic impact of the sharing economy on incumbent firms by studying the case of Airbnb, a prominent platform for short-term accommodations. We analyze Airbnb's entry into the state of Texas, and quantify its impact on the Texas hotel industry over the subsequent decade. We estimate that in Austin, where Airbnb supply is highest, the causal impact on hotel revenue is in the 8-10% range; moreover, the impact is non-uniform, with lower-priced hotels and those hotels not catering to business travelers being the most affected. The impact manifests itself primarily through less aggressive hotel room pricing, an impact that benefits all consumers, not just participants in the sharing economy. The price response is especially pronounced during periods of peak demand, such as SXSW, and is due to a differentiating feature of peer-to-peer platforms -- enabling instantaneous supply to scale to meet demand.

Number of Pages in PDF File: 45

Keywords: sharing economy, Airbnb, hotels, competition, peer-to-peer markets


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Date posted: December 14, 2013 ; Last revised: November 19, 2016

Suggested Citation

Zervas, Georgios and Proserpio, Davide and Byers, John, The Rise of the Sharing Economy: Estimating the Impact of Airbnb on the Hotel Industry (Nov 18, 2016). Boston U. School of Management Research Paper No. 2013-16. Available at SSRN: https://ssrn.com/abstract=2366898 or http://dx.doi.org/10.2139/ssrn.2366898

Contact Information

Georgios Zervas (Contact Author)
Questrom School of Business, Boston University ( email )
United States
HOME PAGE: http://people.bu.edu/zg
Davide Proserpio
Marshall School of Business, University of Southern California ( email )
701 Exposition Blvd
Los Angeles, CA Los Angeles 90089
United States
HOME PAGE: http://www-bcf.usc.edu/~proserpi/
John Byers
Boston University - Department of Computer Science ( email )
Boston, MA
United States
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