Trend forecast for 2024: Airbnb is out. The Holiday Inn is in.

The switch got underway in earnest last year, when Airbnb hosts reported that bookings were tanking — sometimes even yielding a 50 percent decrease over the previous year. The chief reason seemed to be value for money. “Airbnb got too much dip on they chip,” one X user complained. “No one is gonna continue to pay $500 to stay in an apartment for two days when they can pay $300 for a hotel stay that has a pool, room service, free breakfast & cleaning everyday. Like get real lol.”

How Airbnb is being supplanted by the twentieth-century relic known as the hotel is a good lesson in capitalism. In particular, it’s a reminder to ignore perennial promises that new market innovations will reform capitalism so that it works equally for corporations and everyone else.

To recap, Airbnb was started in 2007 by a couple of San Francisco tech bros who rented out mattresses in their apartment to make rent and decided it could be a business. I myself was an early adopter. From 2011 to 2015, I moonlighted as an Airbnb host to help pay rent on my Chicago apartment after being laid off from my job. I’d sometimes rent my entire place out for $100 a night and then stay in a ramshackle $40-a-night rental.

During that same period, Airbnb exploded in popularity and grew from a scrappy upstart to the Great Disruptor of the hospitality industry. Suddenly, it was one of the handful of tech companies leading the emergence of the so-called “sharing economy.” A host of techies, journalists, and politicians alike heralded the rise of Airbnb, Uber, Instacart and the like as a game-changing alternative to the consumption-driven, corporate-controlled ethos of the past — never mind that these were all corporations, too. The Time magazine headline “How the Gig Economy Could Save Capitalism” was typical of the utopian prognosticating from the tech-fawning center left.

In his 2016 book The Sharing Economy, NYU business professor Arun Sundararajan preferred the term “crowd-based capitalism” and said it represented an “interesting middle ground between capitalism and socialism.” He claimed that peer-to-peer networks would cause the distinction between markets and hierarchy to dissolve and that the “democratization of economic opportunity promises inclusive growth.”

But crowd-based capitalism, as it turns out, is just more capitalism. We also know now that the success of the “sharing economy” was propped up by the free flow of cheap venture capital. The plan was simply to use artificially low prices and generous incentives to establish a large customer base, and then elbow out the competition while never having to make a profit. This era, roughly 2012 to 2020, was dubbed “the golden era of the Millennial Lifestyle Subsidy” by the New York Times because ordering takeout, a ride to the airport, or a weekend in someone else’s dope loft in Seattle was cheap — until shareholders and Wall Street investors finally asked someone to pay the bill.

Now, Airbnb is in the stage that journalist Cory Doctorow has dubbed the “enshittification” of online platforms. “Once [buyers and sellers] are locked in, the surplus is handed to shareholders and the platform becomes a useless pile of shit,” writes Doctorow. What that means is that while Airbnb’s founders talk of being on an infinite time horizon to help humanity, the platform keeps charging higher fees, and is making more money — all without having to provide the baked-in services and amenities of a hotel to users or adhere to the hospitality industry’s (admittedly thin) regulations and worker protections. The company’s share price is up over 60 percent this year, based on a recent earnings report that named this year’s second quarter the most profitable one yet.

Now that they’ve got all of us hooked, Airbnb’s service itself is going into the toilet. In 2023, Airbnb is littered with ads for properties that have deceptive photos, a laundry list of demands and rules from hosts, hidden cameras, and tacked-on fees. The cluttering has made the site nearly unusable, or at least untrustworthy, causing some on social media to declare an “Airbnbust.”

Pretend you’re a masochist and want to zip to Orlando for an impulsive New Year’s excursion to a theme park and need a place to stay. At first glance, one available rental that calls itself a “Little Piece of Heaven” claims that it’s a newly constructed one-bedroom unit owned by a Christian family that’s “10 minutes to Universal theme parks” for $130 a night. Sounds decent, right?

Not if you dig deeper. The final costs are hidden until you hit the “Reserve” button. That’s when you discover that booking three nights actually costs $600, not $390 — thanks to an $80 cleaning fee, a $66 service fee, and additional taxes. What’s worse is that this so-called piece of heaven is actually just a well-disguised garage connected to someone’s house, something you wouldn’t know unless you read a recent customer review: “This place is cozy, but it’s a closed-in garage, so not very private.”

Why not instead book a room at the Rosen Inn International, a three-star hotel with a free shuttle to theme parks that you can have for a total of $350 for the duration of your stay? It’s a deal that an increasing number of travelers are taking.

The sharing economy of the twenty-first century now looks less like the capitalism of the future and more like the capitalism of the nineteenth century, when labor was fragmented and organized unions were still a dream. Author Nicholas Carr has liked it to “digital sharecropping,” where independent contractors are open to more price competition for their labor and a small minority that owns the farm — or in this case, the platform — gains most of the profits. The gains that some sharing economy workers have made in recent years are almost all the result of collective action like strikes and walkouts, or state interventions such as the expansion of minimum wage laws in New York City and France.

None of this is to romanticize the hotel industry, of course, which is susceptible to monopolies, exploits service workers with low wages and skimpy benefits, and wants to milk us for profit as much as anyone in Big Tech does. The takeaway instead is that Airbnb’s elevated talk about “community” and “infinite horizons” is just a string of marketing buzzwords — and, as ever, that no market innovation under the sun can save capitalism from itself.