Craigslist Killed the Newspapers – will AirBNB kill hotels? Sharing – the new business model!

I am on the lookout for new models that kill old ones. Craigslist eviscerated the revenues of newspapers and made them vulnerable. I am waiting for a new model to do the same in health. But I am sure that AirBNB and its model will kill off much of the hotel sector. Whatever happens to Airbnb – the model will persist. That is enabling us to share assets – now where we live but maybe soon our cars – expensive tools etc. We see this in Co Working – maybe co manufacturing – Co – Food Processing? Wherever an exclusive high capital asset exists, a shared alternative will emerge.

How much would a nice hotel room cost you in a really cool part of Manhattan? At least $350 a night. A grotty room maybe for $250. Can you get any hotel room in the Plateau (the most Bohemian part of Montreal)? The quick answer is no.

But if you use AirBNB – you can get a really nice place for maybe $100 in Manhattan and $70 in Montreal. As with eBay you also get the advantage of a trust mediator.

Here is the core idea – AirBNB and other sites like it – there are 3 that have just got major funding – are run along the lines of eBay. You have a flat or house or even a room in your place. You use the aggregating power of the mediator to position your place and to control the trust issues. You are a traveller. You are exposed to the content which is highly personal – with a number of trust issues dealt with by rating and how the money works. In essence good behaviour on both sides is good business. Both sides are rated.

The barrier for travellers is to get over the idea that Hotels are it. Once you do, you may never go back and the hotels – as with newspapers and Craigslist cannot compete. For they have fixed costs like a newspaper that they cannot reduce.

Who wins? Well you do. My wife intends to stay in Montreal with my daughter in the fall to help my daughter in law who will have new baby. We have found a 3 bedroom flat 100 yards away for $75 a night. More than ideal. The renter can now get a return on her place that was impossible before.

Once again the Personal Brand will trump the corporate brand – for we can truly trust a person.

Of course, as with newspapers, the best brands will be ok – But what about all those budget hotels or those mid level hotels? Armageddon I think. Others agree and have valued Airbnb at 1 billion dollars

The process of the Innovator’s Dilemma will now take place.

This is truly a game changer for all involved. Who would ever have thought?

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