Airbnb in Paris: what impact on the hotel industry?

Summary In many cities around the world, short-term accommodation platforms have become an alternative for tourists. These new players, led by Airbnb, are disrupting the market, raising concerns from the hotel industry and public authorities. Using data from hotels and Airbnb in Paris, this paper proposes a new methodology to measure the competitive pressure Airbnb is exerting on the hotel industry. The results indicate that an increase in the number of Airbnb bidders near a hotel leads the hotel to lower its price. This effect is amplified on weekend nights.