There is more to Airbnb's success than just a better deal than a room. Something that makes little sense is that a 200 room hotel, let alone the hotel industry, should be able to crush Airbnb on price in any local market. The Airbnb operator has little operational efficiency, aside marketing and IT (provided by Airbnb) in comparison. Taxation (my hometown taxes rooms at 17%) might be some of it, but it seems much larger than that.