A million people are coming to the Bay Area for Super Bowl weekend.
The Bay Area (from San Francisco to San Jose) has a population of 3.3 million and a severe housing shortage. Where are we going to put another million bodies??
I figured the market was ripe for price gouging. Several weeks ago, average listing rates on Airbnb showed that I could recoup a month’s rent by subletting my apartment for just one weekend.
Enterprising individual that I am, I listed my place and waited for the offers to surge in. I told my boss I might have to sleep in the office for the weekend. Maybe even rent out the floor space under my desk.
Not a single rental request came in. Instead of booking rates skyrocketing as the Big Game drew near, it appeared that prices were falling.
Turns out everyone in the Bay Area had the same greedy idea. In Santa Clara, home of Levi Stadium, there were 86% more Airbnb rentals listed this weekend than any other weekend.
Here we are, Friday before the Super Bowl. This is not bad at all:
Just for comparison, here is next weekend’s price map:
Short-term rental supply is way more elastic than demand. Demand requires commitment, planning, and airfare. Supply involves going to Airbnb’s website and filling out a form. As a result, this weekend’s rental rates are comparable to any other weekend.
The system works (to my detriment). Opportunistic rent-seekers like myself have totally ruined things for the regular rent-seekers.
Next time there’s a demand surge, I need to find a market with inflexible supply. I hear restaurants are gonna be in the weeds as they try to feed our million visitors this weekend. Maybe I’ll set up a hot dog stand on Castro Street.
Hull, B. (2005). The role of elasticity in supply chain performance. International Journal of Production Economics, 98(3), 301-314.