Platform versus Pipeline Business Models: Are Airbnb and Marriot Right to Move into Each Other’s Turf?

The general view is that platforms are somehow in a winner-takes-it-all market and therefore justify enormous valuations, especially when compared with their pipeline counterparts. However, to continue its fast growth, Airbnb diverted from its pure peer-to-peer (P2P) strategy and has been adding owned room capacity. At the same time, Marriott added P2P platform-sourced rooms to its marketing and distribution channels. The question the senior management of both companies needs to address is what it takes for them to be successful in each other’s turfs.