4 ms·

Why airbnb needs so much cash? They are not exactly subsidizing either side of the market?

by ameyamk 10y ago

shostack 10y ago
Massive legal and lobbyist fees?
- clydethefrog 10y ago
  Yes, they also need the money to fund their lobbying and fake grassroots. One campaign cost 8 million. https://www.fastcompany.com/3059975/how-airbnb-turned-its-hosts-into-political-foot-soldiers https://www.fastcompany.com/3059975/how-airbnb-turned-its-ho...
  - mangeletti 10y ago
    > ... and fake grassroots Indeed. Btw, funny thing: fake grassroots is called "astroturfing".
    - friendlygrammar 10y ago
      wow, I never actually thought about why it's called astroturfing
hkmurakami 10y ago
Personnel costs and marketing costs as they expand to new markets. Further experimentation with vertical integration (Airbnb owning room servicing teams, or Airbnb owning actual apartments/hotels).
- toomanybeersies 10y ago
  > Airbnb owning actual apartments/hotels Wouldn't that just make them literally a hotel chain, with no disrupting difference to any any other? I'm fairly sure I can book a room online at the Hilton.
  - imjared 10y ago
    and you could call a cab too but you might use Uber if their booking process is better.
    - notyourwork 10y ago
      Correct but hotel booking process is quite diverse and all the means I have tried are fairly painless. You can call the hotel directly and book a room. You can check one of many online sites and book through them.
      - sanderjd 10y ago
        That diversity is exactly why a uniform offering from AirBnB would be so compelling.
  - lotsofpulp 10y ago
    Even funnier, because most of the brands don't even own most of their branded hotels, they're usually franchised. Hilton/Marriott/Starwood/Choice/Wyndham/Accor collecting 5% to 15% is basically the same thing as AirBnB is if you're not using someone who actually rents out part of their home.
  - SilasX 10y ago
    Concur with imjared -- Uber likewise went "full circle" and started adopting more "cab company functions" once they reached the appropriate scale: "Oh, hey, we might as well make money leasing the cars too!" "Oh hey, there's money to be made in payday advances!" [1] With that said, (per imjared) Airbnb may have some comparative advantage in the ease with which they bring this spare capacity online via a nice interface; it could become a useful platform for allowing hotels to dump extra rooms for sale, in a way that's more pleasant for users to find. [1] Lyft lets you get paid earlier for 50 cents IIRC.
  - sanderjd 10y ago
    AirBnB already owns the touch-point with customers who are looking for non-traditional places to stay. Some portion of those customers would also be open to normal hotels, and AirBnB could serve them by doing something as simple as adding another check-box in the "home type" interface. Once word got out that you can do both things in one place, there would be little reason to go through any other service and they would take an ever-larger share of all bookings. Of course, this is won't happen, because hotel operators, seeing this danger, will refuse to integrate with them. But that huge market opportunity is still there, they "just" have to build their own hotel capacity to realize it.
rezashirazian 10y ago
Self driving RVs. It's the future of the hospitality industry.
- asimuvPR 10y ago
  Not sure if this is a serious reply.
  - BurningFrog 10y ago
    It's an Uber joke. ...right?
- fitzwatermellow 10y ago
  > Self-driving RVs That is actually not a terrible idea!
  - sdesol 10y ago
    This is actually an insanely good idea, since it allows you to maximize your awake time, for enjoyment. When you are sleeping, the RV can take you to your holiday destination. Since we sleep about 8 hours a day, you can use that to gauge how far you can travel. The only issue would be road infrastructures. Road maintenance would become a serious issue, due to the extra strain of having potentially 10s of millions of RVs on the road.
    - foobarian 10y ago
      Last time I looked into RV cost of ownership numbers--which was probably when that blog post hit HN from the guy who converted a van into a RV--the RVs are really expensive to move due to fuel and wear-and-tear on the drivetrain. So even if self driving, it's probably not going to be Grand Canyon one day and Florida the next any significant fraction of the time.
- beambot 10y ago
  Not just the future of hospitality... it's the future alternative to home ownership. Think about it: You could literally wake up, do your morning routine, and then step out of the RV and into your workplace. You come back that night... and the next morning you step out into Yosemite Valley for some hiking. You just rent RV berths -- everything from campgrounds (Yosemite) to high-rises (in major cities).
georgeglue1 10y ago
The article states that around $200 million is expected to go to a repurchase or secondary sale from current employees. This seems like a nice thing that airbnb might have to regularly do from here on out. But yeah, the core of your question still stands.
pbreit 10y ago
Better to raise when you can rather than when you need to.
- notyourwork 10y ago
  I suspect the question was asking why they would need more money? At some point you have to stop raising money, start making a profit and stop diluting shares by taking on more investment money.
Tempest1981 10y ago
Is it expensive to sue various states? I saw this in the news: http://www.theverge.com/2016/9/7/12834606/airbnb-threatens-lawsuit-new-york-governor-cuomo-law http://www.theverge.com/2016/9/7/12834606/airbnb-threatens-l... "Airbnb threatens to sue New York if governor signs new law curtailing its service"

Why airbnb needs so much cash? They are not exactly subsidizing either side of the market?

by ameyamk 10y ago

Why airbnb needs so much cash? They are not exactly subsidizing either side of the market?

shostack 10y ago

Massive legal and lobbyist fees?

clydethefrog 10y ago
Yes, they also need the money to fund their lobbying and fake grassroots. One campaign cost 8 million. https://www.fastcompany.com/3059975/how-airbnb-turned-its-hosts-into-political-foot-soldiers https://www.fastcompany.com/3059975/how-airbnb-turned-its-ho...
- mangeletti 10y ago
  > ... and fake grassroots Indeed. Btw, funny thing: fake grassroots is called "astroturfing".
  - friendlygrammar 10y ago
    wow, I never actually thought about why it's called astroturfing

hkmurakami 10y ago

Personnel costs and marketing costs as they expand to new markets. Further experimentation with vertical integration (Airbnb owning room servicing teams, or Airbnb owning actual apartments/hotels).

toomanybeersies 10y ago
> Airbnb owning actual apartments/hotels Wouldn't that just make them literally a hotel chain, with no disrupting difference to any any other? I'm fairly sure I can book a room online at the Hilton.
- imjared 10y ago
  and you could call a cab too but you might use Uber if their booking process is better.
  - notyourwork 10y ago
    Correct but hotel booking process is quite diverse and all the means I have tried are fairly painless. You can call the hotel directly and book a room. You can check one of many online sites and book through them.
    - sanderjd 10y ago
      That diversity is exactly why a uniform offering from AirBnB would be so compelling.
- lotsofpulp 10y ago
  Even funnier, because most of the brands don't even own most of their branded hotels, they're usually franchised. Hilton/Marriott/Starwood/Choice/Wyndham/Accor collecting 5% to 15% is basically the same thing as AirBnB is if you're not using someone who actually rents out part of their home.
- SilasX 10y ago
  Concur with imjared -- Uber likewise went "full circle" and started adopting more "cab company functions" once they reached the appropriate scale: "Oh, hey, we might as well make money leasing the cars too!" "Oh hey, there's money to be made in payday advances!" [1] With that said, (per imjared) Airbnb may have some comparative advantage in the ease with which they bring this spare capacity online via a nice interface; it could become a useful platform for allowing hotels to dump extra rooms for sale, in a way that's more pleasant for users to find. [1] Lyft lets you get paid earlier for 50 cents IIRC.
- sanderjd 10y ago
  AirBnB already owns the touch-point with customers who are looking for non-traditional places to stay. Some portion of those customers would also be open to normal hotels, and AirBnB could serve them by doing something as simple as adding another check-box in the "home type" interface. Once word got out that you can do both things in one place, there would be little reason to go through any other service and they would take an ever-larger share of all bookings. Of course, this is won't happen, because hotel operators, seeing this danger, will refuse to integrate with them. But that huge market opportunity is still there, they "just" have to build their own hotel capacity to realize it.

rezashirazian 10y ago

Self driving RVs. It's the future of the hospitality industry.

asimuvPR 10y ago
Not sure if this is a serious reply.
- BurningFrog 10y ago
  It's an Uber joke. ...right?
fitzwatermellow 10y ago
> Self-driving RVs That is actually not a terrible idea!
- sdesol 10y ago
  This is actually an insanely good idea, since it allows you to maximize your awake time, for enjoyment. When you are sleeping, the RV can take you to your holiday destination. Since we sleep about 8 hours a day, you can use that to gauge how far you can travel. The only issue would be road infrastructures. Road maintenance would become a serious issue, due to the extra strain of having potentially 10s of millions of RVs on the road.
  - foobarian 10y ago
    Last time I looked into RV cost of ownership numbers--which was probably when that blog post hit HN from the guy who converted a van into a RV--the RVs are really expensive to move due to fuel and wear-and-tear on the drivetrain. So even if self driving, it's probably not going to be Grand Canyon one day and Florida the next any significant fraction of the time.
beambot 10y ago
Not just the future of hospitality... it's the future alternative to home ownership. Think about it: You could literally wake up, do your morning routine, and then step out of the RV and into your workplace. You come back that night... and the next morning you step out into Yosemite Valley for some hiking. You just rent RV berths -- everything from campgrounds (Yosemite) to high-rises (in major cities).

georgeglue1 10y ago

The article states that around $200 million is expected to go to a repurchase or secondary sale from current employees. This seems like a nice thing that airbnb might have to regularly do from here on out. But yeah, the core of your question still stands.

pbreit 10y ago

Better to raise when you can rather than when you need to.

notyourwork 10y ago
I suspect the question was asking why they would need more money? At some point you have to stop raising money, start making a profit and stop diluting shares by taking on more investment money.

Tempest1981 10y ago

Is it expensive to sue various states? I saw this in the news: http://www.theverge.com/2016/9/7/12834606/airbnb-threatens-lawsuit-new-york-governor-cuomo-law http://www.theverge.com/2016/9/7/12834606/airbnb-threatens-l... "Airbnb threatens to sue New York if governor signs new law curtailing its service"