Since it was founded in 2008, Airbnb, Inc. has become one of the most successful pioneers of the sharing economy, transforming the travel industry around the world. By helping more than 200 million guests find individual hosts, Airbnb has shaken up the hospitality business and urban real estate markets.¹ While large hoteliers everywhere are aware that Airbnb poses a threat, few know what impact the online rental site actually has on the industry as a whole. Our investigation shows that Airbnb may not be taking away all the hotel customers you might expect, but it is changing the habits of vacation travelers. As city officials worry that the online hospitality service is cutting the supply of rental units, they have responded to the hotel chains’ calls to regulate Airbnb. Even as they fight off the perceived threat, hotel executives are imitating the upstart’s methods by offering limited-service and small-room hotels and such technological innovations as a customized mobile application.