Airbnb, Hotels, and Localized Competition

Maximilian Schaefer and Kevin Ducbao Tran

Bristol Economics Discussion Papers from School of Economics, University of Bristol, UK

Abstract: Using data from Paris in 2017, we estimate demand for short-term accommodations, explicitly accounting for localized variation in demand across the city. Our counterfactual simulations show that Airbnb increases total consumer surplus by 924 million euros, affords Airbnb hosts a surplus of 21 million euros, while reducing total hotel profits by 778 million euros, resulting in an overall welfare gain of 167 million euros. Airbnb’s value to consumers is highest when demand is high and hotels operate close to capacity constraints. The impact of Airbnb on consumers and hotels is heterogeneous across the city: Hotels in outer districts would gain most from a ban of Airbnb. Conversely, consumer surplus would be reduced the most from a ban of Airbnb in these outer districts.

Date: 2026
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