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0 pointsWowfunhappy3y ago0 comments

> But a new host might not get any guests if they don't have a review on this site, and if the guests avoid them, then no one will review them.

The new host needs to price their listing substantially below competitors, to the point where some poor bloke is willing to take a risk, in order to build up a review base.

0 comments

MichaelZuo3y ago

But then won't they have to jack up the price, after earning a sufficient threshold of trust, to compensate for the huge losses their making at the beginning?

i.e. price their beds the same as hotels, or higher?

9887473y ago

No, they can't do that, because, you know, competition. Basically, those few weeks/months of below market rate prices are the cost of bootstrapping your business. Of course, if, over time, you acquire stellar reputation, then you probably can price yourself slightly higher than competitors based on that. But that's very unstable state.

MichaelZuo3y ago

Competition from who? Every established, high trust, host will charge at least the minimum viable rate to break even.

Anyone who charges lower then the minimum viable will simply never break even, given that the money spent to accumulate trust has an opportunity cost.

The cheapest hotels will be priced about the same.

Low or zero trust hosts can't compete against high trust folks without a huge discount as already discussed.

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0 pointsWowfunhappy3y ago0 comments

> But a new host might not get any guests if they don't have a review on this site, and if the guests avoid them, then no one will review them.

The new host needs to price their listing substantially below competitors, to the point where some poor bloke is willing to take a risk, in order to build up a review base.

0 comments

MichaelZuo3y ago

But then won't they have to jack up the price, after earning a sufficient threshold of trust, to compensate for the huge losses their making at the beginning?

i.e. price their beds the same as hotels, or higher?

9887473y ago

MichaelZuo3y ago

Competition from who? Every established, high trust, host will charge at least the minimum viable rate to break even.

Anyone who charges lower then the minimum viable will simply never break even, given that the money spent to accumulate trust has an opportunity cost.

The cheapest hotels will be priced about the same.

Low or zero trust hosts can't compete against high trust folks without a huge discount as already discussed.

1 more reply

j / k navigate · click thread line to collapse