Have you ever dreamed of paying $300 a night to sleep in someone else’s bed while simultaneously making it impossible for actual humans to afford homes in their own cities? Well, congratulations, because that’s not just a dream—it’s the revolutionary business model behind Airbnb, the tech company that discovered you could disrupt the housing market by simply removing houses from it.
In what economists are calling “the most innovative approach to homelessness since cardboard boxes,” Airbnb has perfected the art of transforming what used to be “places where people lived” into “places where people stay for two nights while taking Instagram photos of quirky décor.” A revolutionary concept that answers the age-old question: “What if we could monetize housing scarcity?”
According to research by housing data specialist Propalt, more than a fifth of London short-term lets previously had longer-term tenants before being converted to Airbnb properties1. Further analysis predicts that “hundreds of thousands of London rental homes could disappear from the market in the coming years” as landlords realize they can make more money from tourists than from those pesky locals who insist on living in the same place for years on end.
“As tenancies become available, these properties won’t go back on the long-term market,” predicted Propalt co-founder Kieran Slinger. This brilliant strategy of reducing housing supply during a housing crisis has resulted in asking rents in London increasing almost twice as quickly compared to the rest of the UK2—a testament to Airbnb’s commitment to innovation in the field of making shelter unaffordable.
The Economics of Displacement: A Growth Industry
But let’s not focus on the negative. According to Airbnb’s own completely impartial research, the company helped generate an estimated $85 billion in economic activity across the US in 20233. That’s right—$85 billion! If you’re wondering how much of that went toward addressing the housing crises exacerbated by the platform, the answer is a robust and impressive zero dollars. But think of all the cleaning fees!
Dr. Margaret Displacement, Director of the Institute for Profitable Gentrification, explains: “For every family priced out of their neighborhood, we see an average of 4.7 tourists taking selfies in front of ‘authentic local street art’. That’s what economists call ‘disruption’—specifically, disrupting people’s ability to live in the neighborhoods they grew up in.”
The data supports this revolutionary approach. A 10-percent increase in the number of Airbnb properties in a London ward increases real rents by 0.1 percent4. While this might seem small, the effect compounds over time and is highest in one-bedroom properties—precisely the homes that might otherwise house young professionals, working-class residents, or anyone not earning tech industry salaries.
In what can only be described as a stroke of economic genius, Airbnb has discovered that the impact is even greater in areas with better quality schools. This ensures that families with children are disproportionately affected, creating what housing experts call “educational displacement synergy”—the innovative process of making good schools irrelevant to locals who can no longer afford to live near them.
Job Creation Through Housing Destruction
Perhaps the most impressive achievement in Airbnb’s economic contribution is its claim to support 1 million jobs in the US. These include such diverse positions as “professional key-under-mat placer,” “passive-aggressive house rules writer,” and “person who texts you that the cleaning crew needs another hour just as you arrive after a six-hour flight.”
“We’re not just creating jobs,” explains Airbnb CEO Brian Chesky in an interview we’ve completely fabricated. “We’re creating entirely new categories of employment, like ‘property manager who owns 57 units that used to house actual residents’ and ‘professional photographer who makes a 400 square foot apartment look like the UK’s Buckingham Palace.'”
The company proudly reports that 41% of guest spending stays within the neighborhood of their Airbnb. The remaining 59% presumably goes toward therapy for locals who can no longer afford to live in said neighborhood. This exemplifies Airbnb’s commitment to what they call “trickle-down hospitality”—the revolutionary economic theory that if you displace enough residents, eventually tourism dollars will trickle down to them in their new homes 90 minutes outside the city.
The Hotel Industry: From Disrupted to Desperate Collaborator
In a twist that proves irony isn’t dead (unlike affordable housing), hotels—once considered Airbnb’s primary victims—are now joining the platform. Reports indicate that some hotels receive up to 15% of their bookings through Airbnb5, in what industry experts describe as “if you can’t beat ’em, join the platform that’s beating you.”
“Hotels initially feared Airbnb would destroy their business model,” explains hospitality consultant Thomas Bedsheet. “Then they realized they could list their rooms on Airbnb and charge the same rates plus a mysterious ‘resort fee’ and a non-refundable ‘cleaning fee’ that’s higher than the actual room rate. It’s a win-win, except for consumers, who lose twice.”
A study by HVS Consulting & Valuation found that approximately $450 million annually is lost in hotel direct revenue due to Airbnb6, but hotels have discovered they can recoup some of these losses by simply becoming Airbnbs themselves—a strategy known in business schools as “if you can’t beat ’em, become the thing you once despised.”
Sustainability: Saving the Planet by Displacing Its Inhabitants
Always at the forefront of corporate responsibility, Airbnb committed in 2021 to operating as a net zero company by 20307—a goal that primarily addresses their direct corporate operations while conveniently ignoring the environmental impact of turning residential neighborhoods into de facto hotel districts.
“Our corporate emissions were approximately 17% lower in 2022 than in 2019,” boasts Airbnb’s sustainability report, which fails to mention the carbon footprint of displacing residents who then commute long distances to their jobs in the cities they can no longer afford to live in. This innovative approach to environmental accounting is what experts call “selective carbon counting”—the practice of taking credit for emissions reductions while ignoring emissions increases you’ve indirectly caused.
The company has launched pilot programs to help hosts make their homes more energy efficient, ensuring that tourists can enjoy environmentally friendly accommodations in neighborhoods where locals can no longer afford to live efficiently or otherwise. This commitment to “sustainable displacement” represents a bold new frontier in corporate greenwashing.
“Sustainability isn’t just about reducing carbon emissions,” explains environmental consultant Dr. Greenly Washing. “It’s also about sustaining profit growth while appearing to care about the planet. Airbnb has mastered this delicate balance.”
The Social Media Paradox: Pictures of Places You Can’t Afford to Live
On social media, Airbnb has built an impressive presence, with 5.6 million Instagram followers and 16 million Facebook followers8. Their strategy leverages user-generated content of beautiful spaces that, ironically, would be affordable housing if they weren’t being rented to tourists.
“Our Instagram features high-quality pictures of beautiful homes that would make anybody want to pack their bag and experience Airbnb’s rentals,” explains their marketing strategy. Unmentioned is the fact that these same images make locals want to weep as they scroll through photos of apartments they can no longer afford while commuting two hours to their jobs.
Airbnb’s social media success exemplifies what psychologists call “displacement porn”—the practice of deriving pleasure from viewing spaces that have been removed from local housing markets. With every like and share, users unknowingly endorse the very process that’s making urban housing increasingly unattainable.
Stock Performance: The Market Value of Making Housing Unaffordable
Despite its impressive contribution to housing crises worldwide, Airbnb’s stock hasn’t performed particularly well, falling 26.46% over the past 12 months9. This puzzling disconnect between the company’s ability to transform entire cities and its inability to maintain shareholder value suggests that perhaps making housing unaffordable isn’t the bulletproof business model investors once thought.
“The market is finally recognizing that a business predicated on removing housing from housing markets might face some regulatory headwinds,” explains financial analyst Jessica Bubble. “It turns out that when you make it impossible for people to live in cities, those people use their remaining political power to elect officials who might crack down on your business model. Who could have predicted such a thing?”
Cities worldwide are indeed implementing stricter regulations on short-term rentals10, with New York intensifying enforcement against entire-apartment short-term rentals and Barcelona aiming to phase out short-term rental units by 2028. This growing regulatory response represents what business strategists call “the consequences of your own actions coming home to roost, except they can’t find affordable roosts anymore because they’ve all been converted to Airbnbs.”
The Future: Innovative Solutions to Problems You Created
As regulatory pressures mount, industry experts are questioning the sustainability of Airbnb’s business model. In response, the company is exploring innovative pivots that would allow it to continue profiting from housing scarcity while appearing to address it.
One such initiative is “AirbnHomeless,” a revolutionary program that would allow displaced residents to rent tents in the backyards of Airbnb properties. “It’s a circular economy solution,” explains fictional Airbnb executive Sarah Disruption. “First, we help landlords convert affordable housing into short-term rentals, displacing residents. Then, we help those displaced residents pay to camp in the yards of the very homes they used to live in. Everyone wins, especially us!”
Another forward-thinking solution is “AirbnBunker,” which would convert unused underground spaces into “authentic local living experiences” for both tourists and displaced residents. “Why choose between housing tourists and housing locals when you can stack them vertically?” asks urban planning disruptor Michael Density. “Tourists get the apartments, locals get the basements and utility closets. It’s a win-win space optimization strategy.”
The Unexpected Twist: The Sustainability Paradox
The ultimate irony in Airbnb’s story is that its long-term success depends on the very communities it’s helping to transform. As cities lose their local character and become homogenized tourist zones filled with keypad-entry doors and IKEA furniture, they risk losing the “authentic” appeal that attracted visitors in the first place.
“People travel to experience local culture,” explains tourism researcher Dr. Amanda Authentic. “But when locals can no longer afford to live in tourist areas, that culture disappears, replaced by a generic ‘global tourist aesthetic’ of Edison bulbs, reclaimed wood, and inspirational wall quotes. Airbnb is essentially killing the very thing it sells.”
This phenomenon, known as “authenticity depletion,” represents perhaps the most significant threat to Airbnb’s future. Once you’ve displaced all the locals who created the vibrant neighborhoods tourists want to experience, what remains is just a theme park version of a city—all Instagram backdrop, no substance.
In this light, the true disruption of Airbnb isn’t to the hotel industry but to the concept of cities themselves. By transforming urban centers from places where people live into places where people visit, Airbnb has inadvertently created a new kind of urban space: cities without citizens, neighborhoods without neighbors, and communities without community.
And that might be the most profitable disruption of all—until it isn’t.
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References
- https://www.standard.co.uk/homesandproperty/renting/renting-in-london-landlords-airbnb-b1120844.html ↩︎
- https://www.forbes.com/sites/garybarker/2020/02/21/the-airbnb-effect-on-housing-and-rent/ ↩︎
- https://news.airbnb.com/economic-impact-2023-us/ ↩︎
- https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3945571 ↩︎
- https://hoteltechreport.com/news/airbnb-hotels-impact ↩︎
- https://globaledge.msu.edu/blog/post/57383/how-airbnb-disrupts-the-hotel-industry ↩︎
- https://news.airbnb.com/an-update-on-environmental-sustainability-at-airbnb/ ↩︎
- https://keyhole.co/blog/airbnb-social-media-strategy/ ↩︎
- https://tradingeconomics.com/abnb:us ↩︎
- https://www.reddit.com/r/AirBnB/comments/1h9t70e/unsustainable_business_model_what_will_happen_to/ ↩︎
