Some of the hotel industry's current good fortune can be explained by basic supply and demand. For a long time, the supply of hotel rooms was low, and it's since rebounded much more slowly than demand for hotel rooms. So occupancy, and room rates, and the revenue made off each room, have gone up. What's confusing is how hotels and Airbnb have managed to ride seemingly concurrent waves of demand without experiencing any destructive interference. Hotels are slowly trying to integrate more Airbnb-like services into their holdings, and Airbnb is steadily trying to become slightly more hotel-like in its offerings. "They're bound to get more similar over time from both sides," says Arun Sundararajan, professor at New York University's Stern School of Business. Right now, though, Airbnb and traditional hotels are still far enough apart that not only have they avoided a collision, they're both managing to thrive. In fact, it's even possible that the popularity and hype around Airbnb have helped hotels a bit, simply by driving new interest to the market for short-term accommodations. Get the full story at