Airbnb response to leaked plans: we fight hotel price gouging

Airbnb responded to the American Hotel and Lodging Associations (AHLA) leaked plans, to combat the home-sharing platform, by releasing their own three-part report.

According to the report, consumers have long been accustomed to paying exorbitant rates for hotel rooms when trying to visit a community for a big event or during a popular weekend or holiday. While some price fluctuation can be attributed to basic supply and demand forces and is appropriate, there have been countless examples of hotels engaging in blatant price gouging. Thankfully, Airbnb now offers consumers a new, more affordable option and has the potential to serve as the antidote to hotel price-gouging.

It goes on to say, Hotel owners and executives believe Airbnb threatens their ability to price gouge consumers. On April 17, the New York Times reported:

“Airbnb has brought hotel pricing down in many places during holidays, conventions and other big events when room rates should be at their highest and the industry generates a significant portion of its profits, said Vijay Dandapani, chief executive of the Hotel Association of New York City, which works with the American Hotel and Lodging Association.”

Airbnb states it has prepared the report in an effort to contribute more information and data to the discussion about hotel price gouging and the hospitality sector in key markets in the US. The report is divided into three parts:

Part One: ​Price Gouging is Rampant

Part One examines the hotel industry’s ability and willingness to price-gouge consumers, with examples of price gouging in communities across the US.

Part Two: ​Hotels are Desperate to Keep Price Gouging

In Part Two, we analyze the industry’s recent financial success and stated concerns about losing its ability to price-gouge as home sharing grows in popularity.

Part Three: ​Airbnb Saves Millions for Consumers

Part Three introduces evidence indicating how Airbnb can offer consumers affordable options by comparing average hotel rates to average Airbnb rates on key nights such as New Year’s Eve and major events such as the Super Bowl, the Boston Marathon, and the Indianapolis 500. The analysis indicates that Airbnb users on these nights have saved a combined total of more than $16 million compared to what they would have spent had they been in a hotel.

It concludes by saying, in a dynamic economy, supply and demand forces will impact the price of a hotel room or an Airbnb listing. Some fluctuation is natural and appropriate. But for too long, hotels have had nearly unchecked power to raise rates and price gouge consumers at will. While more research into this matter is necessary, it is clear that Airbnb has given consumers more affordable accommodation options and left hotel industry officials deeply concerned about their ability to price gouge consumers in the years ahead.

Read the full report here