Airbnb has terrified the hotel industry so much, it just agreed to a $17.2b merger

The sharing economy is scaring the hotel industry.

1447742867166Two giant US-based hospitality companies with extensive operations in Australia are uniting to form the world’s biggest hotel chain. And it’s difficult to avoid the conclusion that they are doing so to combat the threat of Airbnb.

Marriott International announced overnight it is buying Starwood Hotels, owner of the Westin, Sheraton and W brands, for $US12.2 billion ($17.2 billion).

The deal, if approved by regulators and stockholders, would create one hell of a monster in the hotel business, an entity with 1.1 million rooms in more than 5,500 hotels in over 100 countries. By way of comparison, accommodation marketplace Airbnb has said it already has 1.5 million rooms and full house listings in more than 190 countries.

Here’s way to look at this deal: Starwood is being acquired at a price that works out to roughly half an Airbnb. The sharing economy startup was last valued at about $US25 billion in the private markets, according to a media report, which is incredible when you consider it was only founded in 2008 (and had trouble securing initial funding at the time)

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