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Airbnb Racks Up Hundreds of Millions in Losses Due to Coronavirus

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Re: Airbnb Racks Up Hundreds of Millions in Losses Due to Coronavirus

#101

Post by imperialdrive »

shartshooter wrote: post #49
user5994461 wrote: post #38

Earlier quoted context omitted.

They should not be tanking. Airbnb is in a highly profitable business with very high operating margin. For reference, they take 20 to 30% commission on each booking, whereas the fixed costs to run a website are ridiculously low. Even with half the bookings, it's still a cash cow.

A company growing as aggressively as AirBnB wasn't taking a 20-30% profit and paying out shareholders. They were taking that 20-30% and reinvesting back into growth. That means people, offices, tech, marketing, audits of homes, process, insurance, etc. When things look good you can run lean and focus on growth. If things start to turn you can ratchet back those costs. Unfortunately, things turned on them very fast an…

There is NO WAY they have 15K employees! edit: Wow, ok, so the number appears to be 12,736 - incredible. Well, I'm speechless.

Good for them for passing money down to staff, but my goodness, how does it make financial sense, no clue.

Re: Airbnb Racks Up Hundreds of Millions in Losses Due to Coronavirus

#102

Post by CydeWeys »

yesplorer wrote: post #95
CydeWeys wrote: post #88

Earlier quoted context omitted.

They don't. Period. That's a simple fact. No questions need asking here; they do NOT make enough money from their listings to cover all of their costs, full stop.

Then they're indeed not fit to run their business, period.

OK, so what are you going to do about it?

Re: Airbnb Racks Up Hundreds of Millions in Losses Due to Coronavirus

#103

Post by CydeWeys »

imperialdrive wrote: post #101
shartshooter wrote: post #49

Earlier quoted context omitted.

A company growing as aggressively as AirBnB wasn't taking a 20-30% profit and paying out shareholders. They were taking that 20-30% and reinvesting back into growth. That means people, offices, tech, marketing, audits of homes, process, insurance, etc. When things look good you can run lean and focus on growth. If things start to turn you can ratchet back those costs. Unfortunately, things turned on them very fast an…

There is NO WAY they have 15K employees! edit: Wow, ok, so the number appears to be 12,736 - incredible. Well, I'm speechless. Good for them for passing money down to staff, but my goodness, how does it make financial sense, no clue.

You're right, the correct number is around 13k.

Re: Airbnb Racks Up Hundreds of Millions in Losses Due to Coronavirus

#104

Post by imperialdrive »

moneymattress wrote: post #52

If you didn't know this already. "Poor" AirBnb here is simply letting customers cancel their stays without even letting hosts know and is then not paying hosts [1]. Note that a lot of these "hosts" are often small guesthouses that barely make rent and now have basically nothing for the next months. Of course you have your fair share of "rent hackers" on AirBnb but beyond that a lot of people run genuine small busines…

Airbnb was for people to make extra cash with extra space. I highly doubt people are going to be in ruin over a couple months of cancellations.

Re: Airbnb Racks Up Hundreds of Millions in Losses Due to Coronavirus

#105

Post by meowface »

qwerty456127 wrote: post #71
saltedonion wrote: post #21

This is fair. A lot of hotel groups have seen their revenue drop 75 to 90 percent. Airbnb was never profitable (I think) and this round of trip cancellations put them deeply in the red.

Why was AirBnB never profitable? How do they even loose anything? All they seemingly do is maintaining a website a small team can maintain. Obviously they also pay for an office, hosting, legal support and ads. I can only see some millions (at most) of expenses per year here. And they are extremely popular, most of the people I meet use AirBnB regularly, they are for short-term living like what Gmail is for e-mail.

Agreed. I don't know how software-based middle-man companies like Airbnb and Uber don't become insanely profitable. I'm sure we're both missing some complexities, but one would think you'd build the initial feature set and then basically be kind of done; is the rest not essentially just some UI/UX tweaks and engagement optimization over time?

As far as I can tell, the functionality offered by Airbnb and Uber hasn't changed at all since they launched over a decade ago. The only things I've noticed them add are "Airbnb Plus" and "Uber Black", which are just "pay some more for a nicer/better-looking place/car".

Of course building these apps to work as smoothly and engagement-y as possible isn't easy, and I'm sure I sound incredibly naive to many people who've worked at those companies, but my assumption would be that there'd be a lot of upfront investment and work building your one product with its one feature - connecting seekers and providers and offloading all the meatspace work to the providers (and phone manufacturers, for ridesharing) while you take a cut - and then your revenue and profit should just go up and up over time on its own.

Why isn't that what happens? I'm sure one obvious answer would be "wasteful spending and unnecessary hiring", but I have no idea if that's actually the explanation here for either company.

Re: Airbnb Racks Up Hundreds of Millions in Losses Due to Coronavirus

#106

Post by dang »

listenallyall wrote: post #78

How does this submission drop from top 10 to 3rd page in about 20-30 minutes? Not allowed to mention anything negative about YC co's?

The opposite: we moderate HN less when YC or YC startups are involved. Obviously the trust of the community is critical and we would be dumb to risk that.

https://hn.algolia.com/?dateRange=all&page=0&prefix=false&qu...

It doesn't mean that we don't moderate such threads at all, though. We penalized this one the same way we've been penalizing almost every coronavirus story, because if we didn't, HN would have consisted of nothing but coronavirus for the past week. I don't see this story as significant or interesting enough to rise above the threshold. "$Company is losing money" is a dog-bites-man story right now, especially in that industry. No?

Re: Airbnb Racks Up Hundreds of Millions in Losses Due to Coronavirus

#107

Post by listenallyall »

dang wrote: post #106
listenallyall wrote: post #78

How does this submission drop from top 10 to 3rd page in about 20-30 minutes? Not allowed to mention anything negative about YC co's?

The opposite: we moderate HN less when YC or YC startups are involved. Obviously the trust of the community is critical and we would be dumb to risk that. https://hn.algolia.com/?dateRange=all&page=0&prefix=false&qu... It doesn't mean that we don't moderate such threads at all, though. We penalized this one the same way we've been penalizing almost every coronavirus story, because if we didn't, HN would have consiste…

Thanks for explaining.

> we've been penalizing almost every coronavirus story

Only you know the actual volume of coronavirus-related stories, and whether leaving them as-is would cover the entire top 10, entire first page, or entire first 3 pages.

However IMO the adjustment, or "penalization," being applied seems too severe. CV is obviously the most important news topic in the world right now, the situation changes extremely rapidly, making the comments section, with contributors from around the globe, highly relevant and informative. My opinion is that up-to-date CV-related content on HN has been difficult to find, and the lack of such, in favor of random, often whimsical topics, trivializes HN.

As I write this, the only CV-connected stories on page 1 are at #19: "Chloroquine, past and present" and at #28: "State projections for Covid-19." While its understandable not wanting HN to be totally dominated by CV, I think there is a better balance to be had.

Re: Airbnb Racks Up Hundreds of Millions in Losses Due to Coronavirus

#108

Post by tptacek »

listenallyall wrote: post #107
dang wrote: post #106

Earlier quoted context omitted.

The opposite: we moderate HN less when YC or YC startups are involved. Obviously the trust of the community is critical and we would be dumb to risk that. https://hn.algolia.com/?dateRange=all&page=0&prefix=false&qu... It doesn't mean that we don't moderate such threads at all, though. We penalized this one the same way we've been penalizing almost every coronavirus story, because if we didn't, HN would have consiste…

Thanks for explaining. > we've been penalizing almost every coronavirus story Only you know the actual volume of coronavirus-related stories, and whether leaving them as-is would cover the entire top 10, entire first page, or entire first 3 pages. However IMO the adjustment, or "penalization," being applied seems too severe. CV is obviously the most important news topic in the world right now, the situation changes e…

On any given day, most of the world's most important news topics aren't on the HN front page, and don't belong there. There are plenty of other sites that do a better job of reporting on the entire world.

Re: Airbnb Racks Up Hundreds of Millions in Losses Due to Coronavirus

#109

Post by listenallyall »

tptacek wrote: post #108
listenallyall wrote: post #107

Earlier quoted context omitted.

Thanks for explaining. > we've been penalizing almost every coronavirus story Only you know the actual volume of coronavirus-related stories, and whether leaving them as-is would cover the entire top 10, entire first page, or entire first 3 pages. However IMO the adjustment, or "penalization," being applied seems too severe. CV is obviously the most important news topic in the world right now, the situation changes e…

On any given day, most of the world's most important news topics aren't on the HN front page, and don't belong there. There are plenty of other sites that do a better job of reporting on the entire world.

> most of the world's most important news topics aren't on the HN front page

because they don't gain traction among the HN audience. CV has, and to a very large degree, according to dang's comment above.

Re: Airbnb Racks Up Hundreds of Millions in Losses Due to Coronavirus

#110

Post by pvg »

listenallyall wrote: post #109
tptacek wrote: post #108

Earlier quoted context omitted.

On any given day, most of the world's most important news topics aren't on the HN front page, and don't belong there. There are plenty of other sites that do a better job of reporting on the entire world.

> most of the world's most important news topics aren't on the HN front page because they don't gain traction among the HN audience. CV has, and to a very large degree, according to dang's comment above.

It's mostly because they're not what HN is for. Sometimes things that are mostly not what HN is for gain traction on HN while still being mostly not what HN is for.
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