[matte_black]

When a marketing budget that once served a uniform segment splits to serve multiple segments, you must either divide the budget amongst segments or increase the budget to support the previous standard of marketing activity for a segment.

[ghaff]

Yes but, if you serve multiple segments vs. just one, you presumably can amortize your marketing dollars over more volume. (And if you're not increasing volume by going after more segments, those new segments obviously aren't working out for you.)

[matte_black]

In this case the low end market becomes a drain on AirBnB because the ROI is not nearly as high as their high end market. However the ROI would be acceptable to a smaller player. Is it worth for AirBnB to dilute their brand at this critical juncture just to hold on to as wide a market as possible?

No.