Price surges are no new experience for Americans. When something is in high demand, it’s going to be a lot more expensive. We see this most often with hotels, who raise their pricing during whatever time it is for them to shine, pretty much as high as they can.
So, when do you think all the hotels book up in Omaha, Nebraska? The answer might surprise you. It’s not for concerts, sporting events, or even over the summer, but Omaha fills with about 40,000 visitors for Berkshire Hathaway’s shareholder meeting. Since the first meeting in 1980, hotels have caught on to this and started raising prices— some well over $400 for the night!
Buffett— who we all love for being the frugal billionaire that he is— briefly threatened to move his meeting to Dallas in future years back in 2014, but for the time being urged those attending to check out Airbnb instead; an online business where residents from all over can rent out their homes. The concept of a “sharing economy” has been on the rise over the last decade, probably mostly from millennials. Essentially, individuals can just borrow or rent something thats owned by someone else— something that comes in handy especially with the price of something is especially high, and might go unused sometimes.
It doesn’t come as much of a surprise that when Buffett talked, people listened. Prior to the 2015 shareholders meeting, more than 1,700 Omaha residencies were listed on Airbnb. Now, total Airbnb listings in Omaha are about 5,000. Airbnb does still surge their pricing, following basic supply and demand, but its 60% surge is minuscule compared to hotels 200% surge.
This probably came as a surprise for pretty much everyone, as the Oracle of Omaha typically praises his hometown sometimes calling it “the cradle of capitalism”— but Buffett insists it isn’t personal.
“I want to protect my cubs, make sure shareholders are well taken care of,” Buffett said. He went on to refer to himself as a bit of a mother bear. Still, that didn’t stop others from speaking out against him. The Nebraska Hotel & Motel Association criticized ‘local citizens’ promoting businesses in San Francisco rather than local hotels. Still, the numbers indicate that more people were interested in what Buffet had to say.