Amazing what a company can do when they ignore regulations and simply extract wealth out of our communities. 80% of their profit comes from huge corporate listings yet they advertise themselves as a "home-sharing" site. Nonsense.
Ahead of IPO, Airbnb achieves profitability for second year in a row
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Re: Ahead of IPO, Airbnb achieves profitability for second year in a row
#62Earlier quoted context omitted.
> 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?
Also, isn't EVERY analyst predicting a recession sometime between now and 2 years from now? In the event of one, vacation rentals are the first thing people cut back on.
Airbnb's defense is that they'll be offering alternatives to hotels (in both business travel and as cheaper vacation options).
Re: Ahead of IPO, Airbnb achieves profitability for second year in a row
#63Can anyone here speak to AirBnb's continued growth. Rumors say it's plateaued and even public articles suggest the same
https://skift.com/2018/11/14/airbnbs-growth-is-slowing-amid-...
Re: Ahead of IPO, Airbnb achieves profitability for second year in a row
#64Earlier quoted context omitted.
> 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?
>You're ignoring a massive market for vacation rentals outside of major metropolitan areas that AirBnB has conquered from craigslist. But it’s still at the end of the day just a real estate play. If AirBnB wants to make another dollar, they have to list another property. They can’t just jack the prices like Netflix because they have serious competition on every front. There’s no services they are launching which will…
They've started exploring helping people add ADUs and will almost certainly investigate how they can continue to increase their supply. That said, on the high end, they absolutely can continue to increase prices, and that's probably a much stronger lever than most think.
Re: Ahead of IPO, Airbnb achieves profitability for second year in a row
#65Earlier quoted context omitted.
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.
That can be true at the same time that "winning markets like South Lake Tahoe aren't the markets most critical to their growth" is true.
Re: Ahead of IPO, Airbnb achieves profitability for second year in a row
#66Amazing what a company can do when they ignore regulations and simply extract wealth out of our communities. 80% of their profit comes from huge corporate listings yet they advertise themselves as a "home-sharing" site. Nonsense.
>extract wealth out of communities
Yeah, you don’t have an axe to grind here, I’m sure.
Re: Ahead of IPO, Airbnb achieves profitability for second year in a row
#67Earlier quoted context omitted.
That sounds like hedging a bad idea with another bad idea. Options expire, so not only do you have to be right that the stock will go down, but you also have to be right that it will go down before your options expire. The further away the expiration, the higher you'll be paying for implied volatility. This sounds like a terrible strategy for a hunch that regulations are going to eventually impact Airbnb at some fuzz…
I couldn't help but notice that by that logic auto insurance is a bad idea. Not only you have to be right that you get into an accident. But also you have to get into that accident before contract expires. Would he pay premium for the options? - Sure. But that buys something. Limiting the loss vs shorting for example. Besides shorting isn't exactly free either.
Auto insurance is risk management, not investing. Auto insurance doesn't expire. OP can keep being wrong for years, buying options over and over until they're no longer liquid. I guess you can do that with any stock. The market already prices that in (implied volatility as I mentioned).
The point is, you don't use options for investment decisions where you don't know the timing of when you'll be right, unless you're hedging another investment.
Re: Ahead of IPO, Airbnb achieves profitability for second year in a row
#68Earlier quoted context omitted.
I am pretty sure what the parent is saying is to buy puts in lieu of shorting. There is no hedging here, just limiting downside.
Yes I'm aware, since they suggested puts instead of calls. I'm not sure what your point is since my argument applies in either case. It's much less probable to be right about both price and timing. You won't have unlimited losses, but you will likely be wrong and lose money, unless you're the one writing the regulations.
> It's much less probable to be right about both price and timing
But that's priced into any analysis of the puts. If you're just arguing that speculation in general isn't prudent, then I'm with you, but you can't really say that a particular bet would be a "terrible strategy" (if you mean that in a negative EV sense?) when we don't know what the prices will be.
Re: Ahead of IPO, Airbnb achieves profitability for second year in a row
#69They're often considered similar businesses, but intuitively it seems to me that, long-term, Airbnb will be valued higher than Uber and other ridesharing companies. Home rentals seem to be simpler market to operate in than coordinating real-time supply and demand between drivers & riders. Additionally, Uber seems to be facing issues on the driver side of the business - they have a $650 driver acquisition cost & a 12%…
What im not sure about is Airbnb's moat. They have a great brand name and all, but their service is very limited: 15% is a very large cut to take on these transactions. What prevents another company from doing the same at 12% and costing 50% to operate?
Nothing prevents another company from doing that, but all of the hosts & guests are already on Airbnb. Two-sided marketplaces are very difficult to start, but once they have some momentum, it's even more difficult to unseat them.
Look at Craigslist - terrible UI, hundreds of startups have tried to challenge it in the past 15+ years, and yet it's still my go-to when I need to sell some old furniture.
Re: Ahead of IPO, Airbnb achieves profitability for second year in a row
#70Has anyone bought a property to exclusively rent via AirBnB? Looking to buy something with this in mind.
Several of my friends bought places in Palm Springs to do this in 2012-2015. They've made an absolute killing so far. But who knows what will happen if another recession comes.
I grew up there and my dad owns a real estate brokerage. I can confirm that this is pretty common, and it's a great example of Airbnb making a market that has existed longer than I've been alive (vacation rentals in a resort city) orders of magnitude more accessible to the average person. I've seriously considered (to the point of starting to model it) buying something that can credibly be called "walking distance" to the Coachella venue and seeing how much of the of the mortgage in that month (two Coachellas + Stagecoach) + the tennis tournament in March.