i don't see how a whole new company can exist to fill in the gap of what airbnb's price slider filter can fix in 2 seconds
This splits AirBnBs marketing on two fronts: high end and low end. This either doubles their marketing cost or halves their marketing budget for each audience. Take your pick.
A company focused on low cost listings only has to market to one audience, which results in significantly cheaper marketing cost, which means better profitability, which means longer staying power, which means eventually they own a large percentage of the low end market.
Game Over.
Imagine AirBnB and the low cost company both exist as you imagine. Now suppose AirBnB buys the low cost company and doesn’t change their marketing at all. Of course marketing ROI for each of the two segments doesn’t change. Compare this to the case where AirBnB operates in the two segments without buying low cost company. How are these cases different?
No.
Game over^2.
Edit: Marriott, across all of its brands, had nearly $23B in revenue last year. They're clearly doing something right by segmenting their brand.
I think grandparent post has a good point, I'm also one of the people looking for something cheaper, and most airbnb's are often out of my price range.