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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

#141

Post by jhall1468 »

Tiktaalik wrote: post #103
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.

Vancouver brought in regulations to try to regulate Airbnb into actually behaving like the service is intended, that is to ensure that people are simply renting out other rooms in their residence and are not buying condos with the explicit purpose of renting them out full time like virtual hotels. It's abundantly clear that Airbnb has zero interest in helping Vancouver enforce these rules. Vancouver has had to strugg…

It's not Airbnb's responsibility to enforce the law. Full stop.

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

#142

Post by jhall1468 »

matchbok wrote: post #75
cycrutchfield wrote: post #66

Earlier quoted context omitted.

>extract wealth out of communities Yeah, you don’t have an axe to grind here, I’m sure.

I have an axe to grind against mini-hotels that operate without regulation that raise rents for everyone while providing massive money to a small number of interests. So yeah.

So, you're mad at Airbnb because the government isn't regulating it properly?

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

#143

Post by niij »

dawhizkid wrote: post #102
the_watcher wrote: post #70

Earlier quoted context omitted.

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" t…

Wow, didn't realize how inexpensive homes are there (vs LA, SF at least. I see 2 bedroom/2 baths for under $200k..tempting!

Compared to some of the most expensive housing in the USA? I'd bet more 2bd 2ba homes are sold <200k in the USA than the other way around by a long shot.

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

#144

Post by mlthoughts2018 »

jhall1468 wrote: post #141
Tiktaalik wrote: post #103

Earlier quoted context omitted.

Vancouver brought in regulations to try to regulate Airbnb into actually behaving like the service is intended, that is to ensure that people are simply renting out other rooms in their residence and are not buying condos with the explicit purpose of renting them out full time like virtual hotels. It's abundantly clear that Airbnb has zero interest in helping Vancouver enforce these rules. Vancouver has had to strugg…

It's not Airbnb's responsibility to enforce the law. Full stop.

Demonstrating compliance with the law can be and often is a legal requirement itself.

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

#145

Post by kwikiel »

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.

Airbnb actually disrupted them https://growthhackers.com/growth-studies/airbnb

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

#147

Post by toomanyrichies »

jeremyis wrote: post #136
bradleyjg wrote: post #104

Earlier quoted context omitted.

In NYC, Airbnb’s largest market, with tiny exceptions, it is illegal to rent out an entire apartment (i.e. host not present) for less than 30 days.

I don't think NYC is Airbnb's largest market.

The New York Times claims NYC is Airbnb's largest US market[1]. And CityLab claims NYC is Airbnb's 3rd-largest market worldwide.[2] However, with respect to whether "the overwhelming majority of its facilitated transactions are illegal":

Speaking strictly for NYC (the town I live + Airbnb host in), I think the more relevant metric is- what percent of Airbnb's revenue comes from the illegal kind of rental (i.e. rentals of the entire unit for more than 90 days of the year) vs the legal kind (whole-unit rentals totaling less than 90 days per year, as well as shared-unit rentals of any length)? According to Gothamist, 75% of its NYC revenue came from whole-unit rentals.[6] How much of that was legal is anyone's guess, but this is one reason why Airbnb was fighting tooth and nail to stop the recent city council legislation.[7]

NB- Another reason is that, once the city collects hosting data, it will likely use its housing inspection mandate to shut down most if not all Airbnb rentals in the city (not just illegal ones) at the behest of the local hotel employee's union. But that's me speculating, so take it with a grain of salt.

Keep in mind that Airbnb made $140 million in NYC in 2018[3], had $2.5 billion in 2017[4], and over $1B in revenue in Q3 of 2018 alone[5]. So the percentage of revenue it contributes is likely between 4-4.5%. If this went away overnight, the company would probably be fine as long as the damage ended there. But there's no guarantee of that, since other cities are considering similar legislation and are looking to see what the outcome of the above battle will be.

In the end, NYC will probably succeed in approving a permit system similar to San Francisco's, which will be enough to get the city the information it needs to shut down any Airbnb host it wishes.

[1] https://www.nytimes.com/2018/07/18/nyregion/new-york-city-ai...

[2] https://www.citylab.com/equity/2018/03/what-airbnb-did-to-ne...

[3] https://www.bloomberg.com/news/articles/2018-07-24/airbnb-s-...

[4] https://www.reuters.com/article/us-airbnb-results/airbnb-had...

[5] https://www.pymnts.com/earnings/2018/airbnb-third-quarter-re...

[6] http://gothamist.com/2018/06/28/city_council_takes_on_airbnb...

[7] https://ny.curbed.com/2018/7/19/17590164/airbnb-nyc-law-prop...

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

#148

Post by bleu-ble-bleu22 »

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.

Here in Utah, Ksl.com does the majority of classified transactions. Craigslist was late to market and never caught on. Source: https://www.theatlantic.com/technology/archive/2017/04/ksl-c...

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

#149

Post by bradleyjg »

toomanyrichies wrote: post #147
jeremyis wrote: post #136

Earlier quoted context omitted.

I don't think NYC is Airbnb's largest market.

The New York Times claims NYC is Airbnb's largest US market[1]. And CityLab claims NYC is Airbnb's 3rd-largest market worldwide.[2] However, with respect to whether "the overwhelming majority of its facilitated transactions are illegal": Speaking strictly for NYC (the town I live + Airbnb host in), I think the more relevant metric is- what percent of Airbnb's revenue comes from the illegal kind of rental (i.e. rental…

> whole-unit rentals totaling less than 90 days per year, as well as shared-unit rentals of any length

The multiple dwelling law does not allow any whole units to be rented for less than 30 days. There’s no exception for less than 90 days in a year total.

From the MDL: A ‘class A’ multiple dwelling is a multiple dwelling that is occupied for permanent residence purposes… ‘Permanent residence purposes’ shall consist of occupancy of a dwelling unit by the same natural person or family for thirty consecutive days or more and a person or family so occupying a dwelling unit shall be referred to herein as the permanent occupants of such dwelling unit.

Per your own link that means 75% of nyc Airbnb revenue is derived from facilitating illegal transactions.

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

#150

Post by shaklee3 »

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.

Many of the exact same properties are on VRBO.com already, so Airbnb doesn't even have a lock on their own properties.
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