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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

#91

Post by nkrisc »

gringoDan wrote: post #69
conanbatt wrote: post #57

Earlier quoted context omitted.

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.

I'm not arguing your point, but I think Craigslist's UI is very focused in scope and meets the expectations of its audience.

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

#92

Post by Zimahl »

longerthoughts wrote: post #72
matchbok wrote: post #61

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.

> they ignore regulations and simply extract wealth out of our communities Can you elaborate on this?

I'm not the person you are asking but I'll lay out how I understand this argument from what I've read about the housing market in Portland, OR, which has a big housing crisis right now.

Available housing, apartments, condos, etc, is being eaten up by short-term renters. The price of short-term rentals are more expensive than long-term rentals, but due to so much inventory not being free for long-term rentals, the price for long-term rentals has gone up a lot. This is the same inflation that we see in the expected vacation destinations but in non-traditional locations, like Portland and it's suburbs.

AirBnB is supposedly built to empower individuals to post a rental here or there. What has been found is that it has enabled and encouraged individuals and companies with large inventories to convert long-term rentals into short-term ones. And that 15% that AirBnB takes is simply passed onto the consumer - which then affects the price of long-term rentals.

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

#93

Post by jameslk »

hrez wrote: post #90
jameslk wrote: post #67

Earlier quoted context omitted.

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…

>Auto insurance doesn't expire. Every single auto insurance in US I had is a 6 or 12 month contract which expires at the end. The expiration time/date is very specific to the minute. You usually get a new contract after that which you can choose to pay premium for or loose coverage otherwise.

Yes, my bad, you are correct on that. I meant more that options don't renew. I came to edit it after I thought that through but too late I suppose.

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

#94

Post by pyrale »

longerthoughts wrote: post #72
matchbok wrote: post #61

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.

> they ignore regulations and simply extract wealth out of our communities Can you elaborate on this?

Airbnb makes no effort to control the legal aspect of people letting appartments on their site, nor do they give tax agencies the means to collect taxes. In fact, at some point, they offered their european renters to collect earnings on nameless credit cards from Gibraltar.

There is also the negative effect of renting prices going up, or having your neighbour replaced with 3-4 party organizers a month.

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

#95

Post by jaked89 »

conanbatt wrote: post #85
gringoDan wrote: post #69

Earlier quoted context omitted.

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.

Craigslist has a fantastic moat: they are insanely operationally efficient. To make more money than craigslist at a lower cost is virtually impossible. The real entrance cost to becoming a host in airbnb is not airbnb, its having a house. And a host will use airbnb or whatever to keep the appartment occupied. It can absolutely be commoditized, much like Lyft and Uber have. A service that posts your apt in multiple we…

It's irrelevant how many sites you can use to list your apartment. What matters is which site guests use.

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

#96

Post by bradleyjg »

gringoDan wrote: post #43

They'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%…

On the other hand Uber is now operating mostly aboveboard while Airbnb, at least in its single largest market (NYC), is like Napster in its second incarnation—-while it may itself not be violating any laws the overwhelming majority of its facilitated transactions are illegal. That’s a dicey thing to invest in.

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

#97

Post by xiphias2 »

gringoDan wrote: post #43

They'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%…

Peter Thiel was specifically talking about people thinking that the businesses are similar, while they're not. AirBnB has a much higher network effect, because there's a huge difference in the listings, while I don't usually care which taxi company I use.

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

#98

Post by usrusr »

conanbatt wrote: post #57
gringoDan wrote: post #43

They'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?

Same as booking.com: users won't spend a second on looking at the second largest directory and directory customers cannot afford to not be present the one end users are looking at, they will grudgingly pay. The only question is which of booking and airbnb will survive, as their market overlap keeps getting bigger. In any case, those providing the actual hospitality service seem to be getting the short and of the stick.

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

#99

Post by gammateam »

asteli wrote: post #89
conanbatt wrote: post #85

Earlier quoted context omitted.

Craigslist has a fantastic moat: they are insanely operationally efficient. To make more money than craigslist at a lower cost is virtually impossible. The real entrance cost to becoming a host in airbnb is not airbnb, its having a house. And a host will use airbnb or whatever to keep the appartment occupied. It can absolutely be commoditized, much like Lyft and Uber have. A service that posts your apt in multiple we…

I have friends who worked at Craigslist, and was astonished to hear them describe a team of IIRC 35-40 employees. They have somewhere around 50 now? Makes you wonder what those 3k+ employees at Twitter all do.

A lot of companies have an affinity towards jobs numbers, and derive benefits from the local municpality by being able to print job numbers

It simultaneously helps the organization’s tax efficiency and MAYBE something interesting gets developed

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

#100

Post by 8ytecoder »

jaked89 wrote: post #95
conanbatt wrote: post #85

Earlier quoted context omitted.

Craigslist has a fantastic moat: they are insanely operationally efficient. To make more money than craigslist at a lower cost is virtually impossible. The real entrance cost to becoming a host in airbnb is not airbnb, its having a house. And a host will use airbnb or whatever to keep the appartment occupied. It can absolutely be commoditized, much like Lyft and Uber have. A service that posts your apt in multiple we…

It's irrelevant how many sites you can use to list your apartment. What matters is which site guests use.

Sure. Unless, let's say, a company that's already used by travelers to book travel options enters the space and/or syndicates the data to hotel search engines in addition to their own website. If I can find both hotels and apartments in hotels.com, why do you think I'd use airbnb? (Assuming apartment owners don't mind listing their space in multiple sites - which is a hard problem to solve but not an impossible one. It has less churn on the supply side compared to, let's say, Uber)
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