Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

Ahead of IPO, Airbnb achieves profitability for second year in a row

techcrunch.com

Post reply on HN
Print view View original

11–20 of 241 posts

Re: Ahead of IPO, Airbnb achieves profitability for second year in a row

#11

Post by the_watcher »

jedberg wrote: post #7
ianhawes wrote: post #6

Earlier quoted context omitted.

I will sell you the puts myself. You're ignoring a massive market for vacation rentals outside of major metropolitan areas that AirBnB has conquered from craigslist. The risk for regulation has passed as citizens see AirBnB as an accepted reality. Hotels aren't happy, but rightfully see AirBnB as a competitor.

> The risk for regulation has passed as citizens see AirBnB as an accepted reality. Hotels aren't happy, but rightfully see AirBnB as a competitor. I agree with your overall, but I'm not so sure I agree with this part. South Lake Tahoe just passed a voter initiative in November that bans AirBnB (and VRBO) except for a few places right next to the major hotels. It was, not surprisingly, heavily supported by the major…

South Lake Tahoe is exactly the kind of market that OP isn't talking about (if I'm reading it correctly). There are tons of places where hotels simply aren't dominant.

A good framing for me: If Airbnb were just looking to compete with hotels, this wouldn't be that exciting of a business, even if I knew they could survive. What's exciting about Airbnb is that they're looking to win in places that hotels aren't.

Re: Ahead of IPO, Airbnb achieves profitability for second year in a row

#12

Post by the_watcher »

rayvy wrote: post #2

> "For starters, Airbnb says it was profitable on an EBITDA (earnings before interest, taxes, depreciation and amortization) basis for the second year in a row in 2018." Not sure if this is financial engineering or if they're actually profitable, but I'm so curious to see how Wall St responds to this "profitability", especially since growth plays (e.g., FAANG) just cratered in Q4'18. Not to get too involved in the di…

"profitable on an EBITDA basis" is about as mainstream a finance metric there is outside of the basic GAAP metrics (and many regard EBITDA to be more reliable than GAAP).

Re: Ahead of IPO, Airbnb achieves profitability for second year in a row

#13

Post by pbreit »

justadooda wrote: post #3

I plan on shorting Airbnb once it IPOs. It will only go down in the short term. Regulations were at an all time low and will slowly ramp up. For better or for worse, these regulations will hurt Airbnb. I'd be curious to hear from anyone who seriously thinks Airbnb will be able to achieve substantial growth in the next 5 years, given the increasing likelihood of a slowdown and more regulations from large cities.

I am super bullish on AirBnB as rare company that can credibly consider a variety of humongous future aspirations. I could see it getting involved in all sorts of travel, lodging and housing industries. Very, very few companies have demonstrated the ability to combine the imagination and execution as AirBnB. I don't think the regulatory environment will be even a speed-bump on its path.

Re: Ahead of IPO, Airbnb achieves profitability for second year in a row

#14

Post by zaroth »

jedberg wrote: post #7
ianhawes wrote: post #6

Earlier quoted context omitted.

I will sell you the puts myself. You're ignoring a massive market for vacation rentals outside of major metropolitan areas that AirBnB has conquered from craigslist. The risk for regulation has passed as citizens see AirBnB as an accepted reality. Hotels aren't happy, but rightfully see AirBnB as a competitor.

> The risk for regulation has passed as citizens see AirBnB as an accepted reality. Hotels aren't happy, but rightfully see AirBnB as a competitor. I agree with your overall, but I'm not so sure I agree with this part. South Lake Tahoe just passed a voter initiative in November that bans AirBnB (and VRBO) except for a few places right next to the major hotels. It was, not surprisingly, heavily supported by the major…

I was just reading about this. Looks like the measure barely squeaked by (less than 1 percent margin) and parts of it are on hold pending a lawsuit.

I’m very conflicted about these types of bans. I have an apartment which I share with extended family, and we share the costs. Technically the way these bans are written would prevent us from doing that without somehow getting everyone’s name of the lease which would not be practical.

I wish that people would fine heavily for actual bad behavior, and let fair economic arrangements between respectful parties happen. But I also understand that enforcement is very difficult, and most people are assholes.

Re: Ahead of IPO, Airbnb achieves profitability for second year in a row

#15

Post by the_watcher »

toomuchtodo wrote: post #10
the_watcher wrote: post #8

Earlier quoted context omitted.

I have conflicting thoughts on this. In the US, it's true that in the near term regulations are likely to get more, rather than less onerous at the local and state level. At the federal level, I don't anticipate any changes in either direction until at least 2020, but probably longer, as this is the kind of issue that is generally hyperlocal as opposed to splitting entirely on party lines (the cynical view is that it…

The places where Airbnb has left to grow are more likely to enact legislation restricting their operation. The low hanging fruit is already picked.

I disagree with this completely, but I'll admit that reasonable people can disagree about that.

Re: Ahead of IPO, Airbnb achieves profitability for second year in a row

#16

Post by adventured »

It's going to be interesting to watch Airbnb IPO at just below the valuation of Priceline.com / Booking Holdings, while Priceline has 3x the revenue and 50-100x the profit. That's a helluva bet on Airbnb still having immense growth left in the tank, as the IPO valuation is already pulling at least five or six years of growth forward.

Re: Ahead of IPO, Airbnb achieves profitability for second year in a row

#17

Post by dominotw »

justadooda wrote: post #3

I plan on shorting Airbnb once it IPOs. It will only go down in the short term. Regulations were at an all time low and will slowly ramp up. For better or for worse, these regulations will hurt Airbnb. I'd be curious to hear from anyone who seriously thinks Airbnb will be able to achieve substantial growth in the next 5 years, given the increasing likelihood of a slowdown and more regulations from large cities.

I've been exclusively living on airbnb for past 6 months and I've paid "Occupancy taxes" [1] on all of them. My impression was that states are now in friendly tax relationship than an antagonistic one with airbnb.

Regulations are positive for airbnb not negative.

1. https://www.airbnb.com/help/article/654/what-is-occupancy-ta...

Re: Ahead of IPO, Airbnb achieves profitability for second year in a row

#18

Post by jedberg »

the_watcher wrote: post #11
jedberg wrote: post #7

Earlier quoted context omitted.

> The risk for regulation has passed as citizens see AirBnB as an accepted reality. Hotels aren't happy, but rightfully see AirBnB as a competitor. I agree with your overall, but I'm not so sure I agree with this part. South Lake Tahoe just passed a voter initiative in November that bans AirBnB (and VRBO) except for a few places right next to the major hotels. It was, not surprisingly, heavily supported by the major…

South Lake Tahoe is exactly the kind of market that OP isn't talking about (if I'm reading it correctly). There are tons of places where hotels simply aren't dominant. A good framing for me: If Airbnb were just looking to compete with hotels, this wouldn't be that exciting of a business, even if I knew they could survive. What's exciting about Airbnb is that they're looking to win in places that hotels aren't.

Yes and no. There are three big hotels, but VRBO and AirBnB have been the dominant way to get housing in Tahoe forever, unless you're a gambler.

Re: Ahead of IPO, Airbnb achieves profitability for second year in a row

#19

Post by user5994461 »

justadooda wrote: post #3

I plan on shorting Airbnb once it IPOs. It will only go down in the short term. Regulations were at an all time low and will slowly ramp up. For better or for worse, these regulations will hurt Airbnb. I'd be curious to hear from anyone who seriously thinks Airbnb will be able to achieve substantial growth in the next 5 years, given the increasing likelihood of a slowdown and more regulations from large cities.

Having worked at the main competitors, I wouldn't advise to do that.

It is a fantastic business with a fat 20 to 30% margin on every booking. There is plenty of market left to capture, between mouth to mouth rentals and what used to go on craiglist, or never wanted to go on craiglist because it wasn't trustworthy.

Re: Ahead of IPO, Airbnb achieves profitability for second year in a row

#20

Post by dominotw »

ohazi wrote: post #9
ianhawes wrote: post #6

Earlier quoted context omitted.

I will sell you the puts myself. You're ignoring a massive market for vacation rentals outside of major metropolitan areas that AirBnB has conquered from craigslist. The risk for regulation has passed as citizens see AirBnB as an accepted reality. Hotels aren't happy, but rightfully see AirBnB as a competitor.

> vacation rentals outside of major metropolitan areas that AirBnB has conquered from craigslist. Last time I looked, many/most vacation rentals are multiply listed on VRBO, etc. Is there a reason to think that AirBnB is stickier than the other vacation rental sites?

> Is there a reason to think that AirBnB is stickier than the other vacation rental sites?

1. Has more volume of listings.

2. There are much cheaper options on airbnb than other sites like VBRO.

3. More trustworthy and better brand recognition.

Post reply on HN