Re:Airbnb Failed – Illegal Host, Electric Shocks, Slugs, Lea...
by Dylan16807 on Friday October 21, 2022 @01:41PM
(#33290824)
They will raise their prices until they are in the normal market range.
That's different from jacking up the price "to compensate" for the losses at the start. They just have to eat the initial costs, and it will take a while for normal market profits to put them in the black.
Re:Airbnb Failed – Illegal Host, Electric Shocks, Slugs, Lea...
by MichaelZuo on Friday October 21, 2022 @02:30PM
(#33291422)
No, because money has a time value, the break even rate will be higher because a dollar today is worth more than a dollar a few months from now. It by definition will cause the rates to be higher then they otherwise would be. This might be worth paying for to be guaranteed a high trust host. But that doesn’t the change the fact that the costs are shifted around instead of being reduced overall.
Anyone who charges lower then the minimum viable will simply never break even, given that the money spent to accumulate trust has an opportunity cost.
The cheapest hotels will be priced about the same.
Low or zero trust hosts can't compete against high trust folks without a huge discount as already discussed.