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Airbnb valued at $13B ahead of staff stock sale

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Re: Airbnb valued at $13B ahead of staff stock sale

#31

Post by grandalf »

JonFish85 wrote: post #28
quaunaut wrote: post #8

I always see these people commenting on how they don't see the value in Airbnb. I've gotta say, after staying at a few places, I don't see the value anywhere else. * Hilton Worldwide has yearly revenues of $9.7b. * Marriott International has yearly revenues of $11.8b. * Best Western has yearly revenues of $6b. Now, I don't know what their current revenues are. Based on how many people from all over the US I've spoken…

"Furthermore, as much as there are local law issues in places like NYC against them, I don't anticipate those lasting long or having a large effect on their revenues." If this is true, it will also apply to their competitors, right? Either the prices of Marriott will fall if/when they stop charging some crazy-expensive taxes on their guests, or AirBnb will have to start paying/charging for those taxes. One way or ano…

You are partially right, but the main value of AirBnB is that opens up a larger supply of rooms.

Hotel prices often fluctuate wildly -- a room may cost $59 one week and then a few weeks later cost $299 because a trade show is in town, etc.

Cities like New York have an insufficient supply of hotel rooms to meet demand. There are often no hotel rooms in NYC available for last-minute booking for under $400/night.

With AirBnB, even if everyone paid all the taxes, there would still be thousands of extra rooms available in NYC, many of which would be cheaper than $400 per night.

Hotels are a nice idea if you need the sheets changed every day, the room cleaned every day, porters to bring up the luggage, a pool, a front-desk to call to ask how late the pool is open, etc.

AirBnB also ads value by offering lots of other permutations. I stayed at an AirBnB in DC and was asked to put my own sheets on the bed (there were freshly laundered sheets in the closet). Upon leaving, I was asked to remove the sheets I used and put them in a basket. The 10 minutes it took me to do those things effectively saved me $100 on the stay, and yes I probably avoided $10 in taxes too.

Re: Airbnb valued at $13B ahead of staff stock sale

#32

Post by smackfu »

supergirl wrote: post #11
quaunaut wrote: post #8

I always see these people commenting on how they don't see the value in Airbnb. I've gotta say, after staying at a few places, I don't see the value anywhere else. * Hilton Worldwide has yearly revenues of $9.7b. * Marriott International has yearly revenues of $11.8b. * Best Western has yearly revenues of $6b. Now, I don't know what their current revenues are. Based on how many people from all over the US I've spoken…

what about future competition? what's to stop 100 other people starting similar websites?

The more relevant question is, what business plan is going to let someone with a similar website attract customers?

You have to find a weak point in Airbnb. Maybe focus on particular underserved cities. Maybe only allow amazing properties and aggressively poach them from Airbnb. Maybe try to enforce a common high-end experience by providing hosts with branded physical goods. Maybe piggyback on an existing hotel brand. Maybe market to the business market exclusively (worked for LinkedIn.) Just some quick ideas, and maybe not viable, but just cloning Airbnb isn't going to get you far.

Re: Airbnb valued at $13B ahead of staff stock sale

#33

Post by jliptzin »

canvia wrote: post #29
rwmj wrote: post #14

Earlier quoted context omitted.

Sadly, network effects. The same reason that eBay doesn't have any serious competitors, despite the awful experience they offer.

What's so awful about eBay? I have always been able to find pretty much exactly what I want at a reasonable price.

Try selling

Re: Airbnb valued at $13B ahead of staff stock sale

#34

Post by hnnewguy »

devinmontgomery wrote: post #25
quaunaut wrote: post #8

I always see these people commenting on how they don't see the value in Airbnb. I've gotta say, after staying at a few places, I don't see the value anywhere else. * Hilton Worldwide has yearly revenues of $9.7b. * Marriott International has yearly revenues of $11.8b. * Best Western has yearly revenues of $6b. Now, I don't know what their current revenues are. Based on how many people from all over the US I've spoken…

>Remember: These valuations aren't for what a company is currently worth. Otherwise, there's no point to investment. They valuations are for where they see the company going, and more probably, growing past. Nit pick: a valuation is what a company is currently worth. That current worth us just based on anticipated future cash flows.

>Nit pick:

This isn't a nit-pick, it's a very important point that is sometimes overlooked by the less financially-inclined.

So often people will argue for some obscene valuation based on the fact that the company is growing rapidly. Well, the whole point of a valuation model is to capture these elements and estimate a price you're willing to pay today for all that future growth.

Of course, that's way easier said than done, especially in a fast growing start-up. But these are sophisticated investors, who are trying not to leave any money on the table.

Re: Airbnb valued at $13B ahead of staff stock sale

#35

Post by rokhayakebe »

smackfu wrote: post #19
quaunaut wrote: post #8

I always see these people commenting on how they don't see the value in Airbnb. I've gotta say, after staying at a few places, I don't see the value anywhere else. * Hilton Worldwide has yearly revenues of $9.7b. * Marriott International has yearly revenues of $11.8b. * Best Western has yearly revenues of $6b. Now, I don't know what their current revenues are. Based on how many people from all over the US I've spoken…

Remember when you are looking at hotel chain valuations that they generally don't own the hotels, but just franchise the brand. There are other large companies involved that own the hotels.

Expand, please.

Re: Airbnb valued at $13B ahead of staff stock sale

#37

Post by smackfu »

rokhayakebe wrote: post #35
smackfu wrote: post #19

Earlier quoted context omitted.

Remember when you are looking at hotel chain valuations that they generally don't own the hotels, but just franchise the brand. There are other large companies involved that own the hotels.

Expand, please.

The hotel business has the separate concepts of "operator" and "owner". The operator is the brand you know. The owner is some property ownership company that contracted a particular operator to build and run their property. The branding is so thorough that you generally don't see any indication of the actual owner, except in the rare cases where a property changes brands.

Just take a look at this list of the top 25 hotel owners: http://nreionline.com/research/real_estate_top_hotel_owners_...

A few are the brands themselves, since they are the owner/operator for some properties. But many are companies you have never heard of that own hundreds of hotels.

Re: Airbnb valued at $13B ahead of staff stock sale

#38

Post by DanBlake »

troels wrote: post #7

I wonder how common it is for investors to allow a partial cashout of employee stockholders like this? And how are they going to distribute the cash? pro-rata?

Its extremely common around the later stages (D and up)

Logic is this : At that stage of a business, you want founders who are looking for a IPO or billion dollar business. If that founder still has a mortgage on his house, he is going to indirectly steer the company in more 'safe' ways to ensure his nestegg retains value. If you just give that founder a few million, hes no longer motivated by that initial cash payment and only has the moon to shoot for now.

Re: Airbnb valued at $13B ahead of staff stock sale

#39

Post by JonFish85 »

grandalf wrote: post #31
JonFish85 wrote: post #28

Earlier quoted context omitted.

"Furthermore, as much as there are local law issues in places like NYC against them, I don't anticipate those lasting long or having a large effect on their revenues." If this is true, it will also apply to their competitors, right? Either the prices of Marriott will fall if/when they stop charging some crazy-expensive taxes on their guests, or AirBnb will have to start paying/charging for those taxes. One way or ano…

You are partially right, but the main value of AirBnB is that opens up a larger supply of rooms. Hotel prices often fluctuate wildly -- a room may cost $59 one week and then a few weeks later cost $299 because a trade show is in town, etc. Cities like New York have an insufficient supply of hotel rooms to meet demand. There are often no hotel rooms in NYC available for last-minute booking for under $400/night. With A…

"Hotel prices often fluctuate wildly -- a room may cost $59 one week and then a few weeks later cost $299 because a trade show is in town, etc."

You don't think this will happen with AirBnb, similar to "surge pricing" with Uber? Continuing with supply & demand, at times of great demand, prices will rise no matter if it's a hotel or AirBnb, even if there is a great deal more supply, there will always be huge bursts of demand (trade shows, what-have-you).

AirBnb would seem to flesh out the low-to-mid-range end of the market. If money isn't an object, there are places to stay in NYC (I think--I'm not at that level, myself!). But if you're looking to stay in NYC comfortably for fairly cheap, AirBnb exists with offerings that fit that, albeit they may be illegal (right now). I just question whether that market is "worth" more than the major chains (based on valuations, which I know is a shaky number to use).

Re: Airbnb valued at $13B ahead of staff stock sale

#40

Post by rokhayakebe »

smackfu wrote: post #21
rmsaksida wrote: post #5

Earlier quoted context omitted.

Same here. Aside from taking care of transactions, which is easy to imitate, I don't see what sets Airbnb apart from other vacation rental websites. They are not fundamentally different. Yes, they have a large userbase, but that's easily threatenable considering their fees and lack of distinction. I must be missing something.

A website like this lives and dies on their inventory more then their userbase. AirBnB doesn't have a listing fee, which differentiated them from traditional vacation rental places like VRBO. How is a competitor going to get a competitive inventory?

http://www.vrbo.com/info/list-your-property?

I think their pricing is similar to ABB

Also Homeway has a large inventory, I believe, but a lower market cap: 3B vs 10B.

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