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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

#211

Post by dazc »

Gustomaximus wrote: post #176
warp_factor wrote: post #113

I'm a regular user of Airbnbs AND hotels. I usually prefer staying in hotels and will look for Airbnb only as a second choice. Reasons are: - Price is usually higher on Airbnb. - Airbnb crazy fees for multiple people, cleaning scam, outrageous service fees etc. - Inconvenience to not have a 24H reception where I can get my keys. The real genius of Airbnb is that they convinced a lot of people that they shouldn't look…

I think the other thing with Airbnb vs hotels; 1) I find with Airbnb I'm more likely to get lower quality from expectations to what is received. 2) Hotels are better are redressing issues whereas AirBnB doesn't seem to care, and you can't really say to Airbnb I want another room type thing on the spot either. 3) For price, I think it's cheaper for groups most of the time. When traveling alone for work I'd say I use i…

If you need to give a brutally honest review on AirBnB make sure you have another account standing by.

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

#212

Post by svarnypetr »

asdfasgasdgasdg wrote: post #165
wilg wrote: post #139

Earlier quoted context omitted.

Which is worse on cities, Uber or Airbnb? (My gut says Airbnb.)

What's bad for cities is not building enough housing for people who want to be there. That includes people who want to be there for a short time. Airbnb is bad for some city stakeholders, but good for other ones (e.g. people who want to rent out their apartment while they're away on vacation).

That assumes you have an infinite city. However, unless you want to destroy the historical center of the city with skyscrapers, you do not have unlimited space for the housing to grow.

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

#213

Post by dazc »

foobiekr wrote: post #164
parent5446 wrote: post #158

Earlier quoted context omitted.

Good hotel still have pools, can be located outside of downtown, and sometimes even in-room kitchens (if that's what you want). They also have maid service, room service, and a front desk. The only advantage you get from an AirBnB is a unique facade, paired with having to clean up after yourself and possible fire and health code violations.

I lived in a hotel for a month. It was hell. That was before the AirBnB era and at a time when VRBO wasn't really an option and was inconvenient. I agree that for simple stays - check in, do stuff, stay a day or two, leave - hotels are great. But for long periods, AirBnb can be much, much better. For me the line is: are you staying long enough to need to do laundry or where you will get to the point don't want to eat…

I agree that, for periods of a week or more, AirBnB can be a better option but...the chances of encountering problems are significantly higher. My worst experiences thus far have all involved noisy, disruptive neighbours.

In a hotel, you can address this problem quite easily. With AirBnB, you have to just live with it.

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

#214

Post by martin_bech »

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?

I have a vacation house, which I rent out. Normal booking fees for these houses are 30%. I have a different arrangement, but thats the default.

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

#215

Post by netcan »

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%…

Agreed.

Adding to that, I'd say that a big part of how "monetizing labour" compares to "monetizing capital" is, in simple terms, that monetizing capital (homes) has more too to maneuver. Ironically, labour (drivers) is the more commodified market.

Uber is a market maker in a world with hard price competition on both ends: drivers and passengers.

Since "rentals" is more variable, a 5-10% change in price/cost/income is tolerable. You can redecorate a rental, for example, to affect its value. Seasonality can shift price by a lot. Etc. This generally lends better to a thick, market-liberal layer.

It's a slight irony (again) that this is the end point. Airbnb was innovative. It changed my travel habits immediately. But, conceptually it's just a holiday rentals site. Nothing new apart from quality and scale. One rental's ROI will be very different from another's. One consumer's choice will be very different from another's. It's a differentiation market. Diverse product, flexible prices.

For an Uber customer/contactor, both the app and the drivers are commodities. What Uber probably needs to do is ruthless efficiency, low marginal costs. Not many SV-startup style companies have that mentality, so hard road ahead.

Also, being capital-oriented, Airbnb gets better over the long term. At this stage, much of Airbnb's stock comprises properties bought or leased specifically to be an Airbnb business.

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

#216

Post by yesiamyourdad »

nostrademons wrote: post #22
ohazi wrote: post #9

Earlier 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?

That hasn't been my experience. The other way around has - most VRBO listings are cross-listed on AirBnB, but AirBnB has a large superset of VRBO listings. As a guest, that makes me want to go to AirBnB over VRBO, because I know they'll always have selection, while if I go to VRBO I see largely the same listings I would've on AirBnB. My experience is that as long as you go to a tourist destination (like Hawaii, Croat…

I believe that this is because historically VRBO had a listing fee but they didn't have a booking fee and didn't take a cut of the booking. AirBnB I believe takes only a cut of the booking, so it costs nothing to have a listing and you price your booking taking the cut in mind. The economics work better for a place that rents sporadically. HomeAway pivoted VRBO after the buyout to have both a listing fee and a booking fee.

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

#217

Post by dageshi »

venantius wrote: post #192
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%…

The main thing is that Airbnb has a global economy of scale - having more hosts in Japan actually does benefit their guests who reside in New York year-round. Competitors to Airbnb similarly must achieve global scale in order to compete in a serious way. There are one or two meaningful exceptions (China, possibly the US domestic market), but essentially any Airbnb competitor must achieve global scale in order to be a…

I think those competitors at a global scale already exist in the form of the big hotel booking sites like agoda/booking.com, they have the global scale and global customer volume to directly compete with airbnb in this space and for them it's just adding another offering that compliments the offering they already have.

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

#218

Post by dageshi »

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.

Big hotel booking sites like booking.com/agoda already have the customers and the world wide logistics for handling this stuff, I can see them becoming direct competitors to airbnb in this space.

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

#219

Post by smueller1234 »

briandear wrote: post #177
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?

15% is a small cut. Ever sold inventory on Booking.com or Expedia? It’s a lot more than 15%. Plus AirBnB actually collects the money for you and you are paid on the day of check in. I own a small hotel in France and AirBnB is far more profitable and easy to use than Booking or Expedia. The marketing value alone is worth far more than 15% — but that 15 also includes credit card fees as well. It’s a great deal.

The standard commission rates for booking.com are 15% in fact. There are ways to push that up due additional marketing (preferred status takes it to to 18% and had requirements on average review scores last I checked).

So I don't know where you're getting your impression from that booking charges more than those 15 percent, but you may wish to recheck your numbers.

Can't comment on ease of use on the supplier side.

Source: I know that because I used to work there, ran the infrastructure eng and prod teams.

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

#220

Post by ric2b »

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.

So ebay doesn't have to prevent people from selling illegal guns? YouTube doesn't have to prevent people from illegally distributing copyrighted material?
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