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Airbnb S-1

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Re: Airbnb S-1

#111

Post by josephjrobison »

wholien wrote: post #12

huh > Most of our guests discover Airbnb organically, with approximately 91% of all traffic to Airbnb coming through direct or unpaid channels during the nine months ended September 30, 2020. Anyone know what % of traffic to Bookings and Expedia (and others) are paid vs unpaid? 91% unpaid seems really high, and I wonder if it's because Airbnb is so differentiated / people want to "Airbnb" a place (vs. "stay somewhere…

AirBnb took the opposite approach of Expedia, Booking, VRBO, etc. Instead of focusing on SEO and paid search like the incumbents, AirBnb focused on brand.

Great breakdown by Casey Winters on the strategies - https://news.greylock.com/four-strategies-to-win-big-with-lo... - showing that there are different strategies, and not one absolute best.

Re: Airbnb S-1

#112

Post by carlineng »

A few random observations I found interesting:

- Looks like they are significantly leaner now as a result of COVID. Cost of revenue is at an all-time low in Q3 (17% of revenue on p164). There's a lot of focus the drastic cuts to Sales and Marketing, but it looks like there's a fair amount of increased discipline across the board.

- It's interesting that Operations and support looks to be very similar in both the first 9 months of 2019 and 2020 despite having drastically different revenue numbers. They had to spend roughly the same amount (600 million) to support 30% less revenue

- Looks like China is a huge part of their future strategy, so much so that it is explicitly called out in their Executive Compensation bonus calculation (p271). I can think of exactly one other American consumer tech company that has had success in China.

Re: Airbnb S-1

#113

Post by rossdavidh »

user5994461 wrote: post #99
aliston wrote: post #84

The seesaw in revenue over the last 3 quarters is insane: 841M, 334M, 1.3B in Q1, Q2, Q3. They even posted a profit last quarter. I've gotta say, the S1 looks appealing considering how few profitable silicon valley companies there are these days. On the other hand, I have a hard time interpreting whether this is truly a profitable company since the numbers are all over the place. It also looks like Q3 tends to be the…

Q2 saw all travels being cancelled due to lockdown across the world. It's surprising the activity bounced back this quick, back to normal in Q3.

Widespread supposition is that AirBnB does better than hotels lately because: 1) when people do travel, they'd rather be at a single apartment or cabin than a many-person hotel (not saying that's well-founded, just that it's a widespread opinion) 2) some people who are now remote working decided that if they couldn't do anything in this city, they would live elsewhere for a little while.

I have, however, no hard data to back up if these are actually the reasons.

Re: Airbnb S-1

#114

Post by agentdrtran »

treis wrote: post #57
vecter wrote: post #18

Earlier quoted context omitted.

pg is surprisingly prescient in his predictions about the potential size of the opportunity. This might just be survivorship bias though, but still, one takeaway I got from the email exchanges is that pg really evaluated founders on both the idea/market opportunity and the qualities of the founders themselves: I'd recommend having the debate after meeting them instead of before. We had big doubts about this idea, but…

It's interesting that they both missed the real killer edge here. Fred said it was Etsy, Paul said it would move up into hotels. Neither are really what happened. Turns out in most places it's profitable to arbitrage long term property cost and AirBnB income. So you have a bunch of small time operators buying or leasing property and putting them on AirBnB. AFAICT that seems to be the bulk of AirBnB business. Not Etsy…

Who knew it's cheap to create hotels when you don't have to pay any of the fees/taxes hotels do?

Re: Airbnb S-1

#115

Post by user5994461 »

jfoster wrote: post #59

Has anyone done a comprehensive review of the Airbnb regulatory environment? I know there's a bunch of places where some of it has settled but also many where hosts might still be operating contrary to regulations. Would be interested in knowing how that breaks out around the world.

There's a long list of cities with what they started to do. Search for "Paris" or "London" and should find them in the document.

It's not really a problem from a financial perspective because law is lagging decades behind the real world and there's way too much money on the table for renters to care about the restrictions/bans (and there's almost zero enforcement of restrictions anyway).

Re: Airbnb S-1

#116

Post by xoxoy »

aliston wrote: post #84

The seesaw in revenue over the last 3 quarters is insane: 841M, 334M, 1.3B in Q1, Q2, Q3. They even posted a profit last quarter. I've gotta say, the S1 looks appealing considering how few profitable silicon valley companies there are these days. On the other hand, I have a hard time interpreting whether this is truly a profitable company since the numbers are all over the place. It also looks like Q3 tends to be the…

It’s similar to what you see in the broader stock market - I mean we closed at all time highs today.

But Q3 was likely an anomaly since they saw a lot of tailwinds from greater demand for homes in driving distance for easier summer vacations plus Covid was only concentrated in a few hot spots over the summer.

Now Covid is more widespread plus there’s naturally less leisure travel in the winter and still very little rebound in business travel.

Still, I think long term the biggest issue is not rebounding demand, which I think will happen, but regulatory issues. Lots of questions and scrutiny around their impact on local housing and rental prices and safety issues related to home rentals for parties.

Re: Airbnb S-1

#117

Post by leptoniscool »

raiyu wrote: post #28
hnburnsy wrote: post #23

Can anyone estimate what an investors in 2009 in Air BNB will get for an ROI post- IPO? I just looked and S&P 500 returned 426.134% with dividends reinvested through September 2020.

3,000-10,000x return approximately. Depends on later stage dilution and what the pre-money is, but still a ridiculous markup. No comparison to S&P.

wow.

Re: Airbnb S-1

#118

Post by JohnJamesRambo »

lotsofpulp wrote: post #100
treis wrote: post #57

Earlier quoted context omitted.

It's interesting that they both missed the real killer edge here. Fred said it was Etsy, Paul said it would move up into hotels. Neither are really what happened. Turns out in most places it's profitable to arbitrage long term property cost and AirBnB income. So you have a bunch of small time operators buying or leasing property and putting them on AirBnB. AFAICT that seems to be the bulk of AirBnB business. Not Etsy…

>But a new kind of "hotel" that consists of one person running a handful to a couple dozen apartments. The most important part of Airbnb is creating a hotel "chain" or "brand" without having to deal with things like zoning or licensing or insurance for hotels. While Hilton/Marriott/IHG/Hyatt/Accor/Choice/Wyndham/etc collect 10% to 20% in exchange for putting their brand on the line, Airbnb also was able to create a b…

I kind of despise Airbnbs for this reason. It's usually some clean on the surface mess that was mostly cleaned up by the previous guests. I got sick of having to wash all the dishes, take off sheets, etc when I check out (usually having to check out at 11 am or earlier, so it can be as easy as possible on the host to rent it out again!). When I vacation I want a hotel room that someone else professionally cleaned, not more chores and what feels like staying in someone's dirty house.

And we stay in some of the nicest Airbnbs, my brother is a doctor.

Re: Airbnb S-1

#119

Post by yreg »

ToFundorNot wrote: post #80
H8crilA wrote: post #34

It is so frustrating with all those recent tech startups how much they're spending on sales and marketing: https://www.sec.gov/Archives/edgar/data/1559720/000119312520... How does one figure whether the business will keep growing without blasting people's faces with ads? If so much spend on ads is required to generate revenue growth then there will either never be profits or the revenue growth will stall (and thus th…

Incidentally, half of those companies you've mentioned are in the top 50 spenders for marketing [1]. I'd hazard to say that they are all in the top 100 in global spend. [1] https://howmuch.net/articles/worlds-top-50-biggest-advertisi...

Considering their revenues they would be in top 100 ad spend even with conservative ad budgets.

However, I think H8crila meant that they did not spend that much on advertisement around the time they ipoed.

Re: Airbnb S-1

#120

Post by Germanika »

cletus wrote: post #102

I'm curious how badly the pandemic has hit and will hit AirBnB. I scanned a couple of tidbits from the S-1: - Reducing full-time employee headcount by approximately 25% (I'm curious from what/to?) - Setting expectation for the potential of no employee bonuses for 2020 and reducing executive team member salaries for six months (interesting that executive team _salary_ is getting reduced rather than bonuses, no? At thi…

You're not far off on your numbers, they laid off around 1900 people back in May, out of ~7500 employees.

I would think the IPO is happening despite the pandemic, not because of it. They had been planning to go public long before the IPO hit, so I wouldn't read into that too much. I definitely have similar reservations about the company as you do though. I get the impression the tide is generally turning against the airbnb model at least within major cities.

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