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Airbnb raises $1B at $31B valuation, became profitable in 2016

342 points by sloanesturz 10y ago

sloanesturz 10y ago
A shame that they didn't raise this money through an IPO. I'm afraid of how long unicorns are staying private: it's a big bummer for their employees and early investors. It'll be a tough sell for early employees of the next batch of unicorns if Uber, Airbnb, Palantir, Dropbox, etc. stay private for 10-15 years or more!
- alehul 10y ago
  If investors are enthusiastically in disagreement about the potential of a company (both the buy + sell sides), it's probably better for the company's valuation to stay private. It blocks out any negative opinions' effect that you'd have if public via investors shorting / betting against the company. This probably leads to an overly high valuation it wouldn't hold up to on the stock market, though, (i.e. Uber) so then the company feels pressured to stay private until they can justify that overly high valuation. In Uber's case, though, they'll keep raising money at absurd valuations and keep the cycle going. Palantir is an exception: If they were public and had to disclose much information, their value would plummet, so it'll likely stay private in the foreseeable future.
  - frgtpsswrdlame 10y ago
    Isn't that bad for employees with stock options though? The market could tell them how much those options are really worth.
    - alehul 10y ago
      Completely, and a small part of why employees are cautioned on here to take salary over equity. The market telling them would be a loss of billions for the investors/founders, both on the value of their own equity and the increased equity they'd have to offer employees (many exceptions apply, but this seems to be the case particularly with startups who lack an easy path to profitability but can show substantial growth).
    - hkmurakami 10y ago
      Palantir will regularly buy its employees' equity fwiw.
      - jonknee 10y ago
        But without the market you could easily be getting ripped off selling your shares back... They're not doing it out of the goodness of their heart.
- jlgosse 10y ago
  I'm not saying this is the case with this round in particular, but it's not unheard of for early employees to take money off the table in a round like this
  - brandur 10y ago
    The company isn't compelled in any way to allow this though, and is actually disincentivized from doing so because it increases the probability of key departures as those people are able to extract some value. If you're in such a position, you better hope that your founders _really_ like you.
    - amenghra 10y ago
      Many companies have periods of time where you get an opportunity to cash out a percentage of your equity. It gives confidence to early employees that the company has their back and they aren't really disincentivized to leave because they still have a majority of their equity "locked".
    - bogomipz 10y ago
      I believe most do though, but with a right of first refusal. In which case they will buy them of direct you to their preferred buyer. Source: I have done this and my conversation with the broker for the secondary market who handles a lot of this said it is quite common and that in fact other at the same company I was at had done so. It might be frowned upon internally but you have to look out for yourself. Staying at a startup for 8+ plus years isn't very realistic for me personally.
  - maineldc 10y ago
    There was a very "insider baseball" moment in 2011 with regards to AirBNB and a well known investor "discussing" taking money off the table. Note, the investor was basically saying that if the founders get some liquidity, you should offer the same to employees. I will never forget how much that raise my esteem him. [0] So yes, if they were willing to do it in 2011, I am sure that they are doing it in this round too. [0] - https://techcrunch.com/2011/10/01/chamath-palihapitiya-airbnb-liquidity-everyone/ https://techcrunch.com/2011/10/01/chamath-palihapitiya-airbn...
- muninn_ 10y ago
  Becoming a public company has it's own set of issues, though.
  - elastic_church 10y ago
    Yeah weird how people hold up IPO as a holy grail. Its the worst thing to do if you are actually passionate about the company, if it is your labor of love. Its the best thing to do if you want to make a lot of money from your money machine and are largely apathetic about the outcome of the business itself. Easy enough to find the next MBA graduate to feign passion for you while they are just trying to sell the company.
    - imranq 10y ago
      why is this downvoted? every company I've worked at that has IPO'd companies has been, in my experience, soul-sucking.
    - muninn_ 10y ago
      Yeah I lean toward this view as well. The point of an IPO is to raise capital. But when you do this, unless you own 51% of the company or there is a small group of like-minded individuals that own 51% of the company, you can wind up losing control and instead of doing things Wall Street doesn't like, you're going to have to focus on profitability and pleasing shareholders. It's one route to take, but not the only one.
      - hagbarth 10y ago
        Yeah, but AirBnB took that route when they got private investors. They expect to get their money back with a good ROI. That would be through an IPO or acquisition, either way you loose control of your company.
        zenlikethat 10y ago
        True, you lose some control, but a small board of a private company is much easier to convince and compel on long-term vision and plans than the general public.
- rpearl 10y ago
  Dropbox and AirBnB have already been private for almost 10 years! (Palantir - 13!, Uber - 8) I was at Dropbox for a while and left in no small part because of the frustrating lack of potential liquidity on my equity.
  - rickcnagy 10y ago
    I don't know, something feels off about Palantir being around for 6227020800 (13!) years...
  - trustfundbaby 10y ago
    wow ... did you give up all your vested options? or at least buy a bit of them?
  - chii 10y ago
    i expect companies that remain private while dangling equities for it's employees to create an opportunity for them to sell privately - e.g., a liquidation event, where the buyer is an investment/VC firm that wants in. It's good for both parties - employees get a liquidation event, the VC gets foot in the door, and founders aren't diluted. I guess, though, in this case, the employee is the party without power, as they are offered a price (which is probably lowballed, since they don't have a choice) in a take it or leave it fashion...
ganfortran 10y ago
If they are already profitable, why raise money again?
- Judgmentality 10y ago
  If you can raise money on great terms, it's usually in your best interest to do so. Maybe they want to build up their war chest as they see increasing regulatory hassles, more competition, and a possible downturn in the market. I'd also guess they are expanding their scope now to more expensive endeavors, as they are building physical hotels now (and probably many other things they haven't announced yet). http://www.businessinsider.com/airbnb-builds-hotel-japan-community-samara-yoshino-2016-8 http://www.businessinsider.com/airbnb-builds-hotel-japan-com...
  - ganfortran 10y ago
    Wow, that is an interesting move. If that is the route they are going after, it is more understandable.
- 101km 10y ago
  Profitable can also mean $1.
- ucaetano 10y ago
  You can be profitable but still be burning cash in a few different ways. Profitable looks only at profit, not at cash flow, so it only means that "booked revenue in a year > booked costs in a year". Keep in mind that capital expenses are not costs, but are cash expenses. Also, some revenue in a given year might not be a cash transaction, because even if you booked it in that year, it might take much longer for you to actually get paid. Some of the ways to burn cash: (1) Expand operations: hiring people, hiring external services, leasing offices, leasing capacity, etc. All that happens far before any additional revenue comes in. (2) Capex: capital expenses (buying servers, equipment, etc.) require cold, hard cash (or debt, which "costs" more than equity for a startup, so it is better to do equity funding). (3) Working capital (current assets - current liabilities): some companies have positive (they receive the revenue cash before dispensing the costs cash) working capital, using their customers' money to expand the operations, others have negative working capital, requiring external funding to expand their operations. My guess is that (2) and (3) don't apply for AirBnB, they are not a capital-intensive business, and as they get paid when the booking is done but pay out when the guest arrives, their working capital might actually be positive. So they probably need it to expand operations.
rs86 10y ago
1b @ 30b is very weird.
maxxxxx 10y ago
They should stop calling companies like Airbnb "startups". They are big companies now and should be treated as such.
- alehul 10y ago
  Working for a company like Google, FB or even Airbnb or a questionable 'startup' is still much different than working for any other type of company. It's even markedly different than working for tech companies that would never be referred to as startups, such as Samsung, AMD or even HP. These large companies (FB, Google, etc) may no longer be bootstrapped and employees may no longer have versatile roles, but they still resemble what we'd call 'startup culture.' It seems reasonable to define a startup based on culture rather than size, though it's not so etymologically sound. edit: If you disagree, please comment why rather than downvote! This is a question I've heard people discuss extensively and would appreciate input or an opposing perspective.
  - CPLX 10y ago
    But we have a phrase for that already, those things are called "tech companies"
    - alehul 10y ago
      Then we'd have to group in rather standard, traditional Samsung-like companies though, which seem to be just as different work experiences from FB or Google as FB or Google is different from newer, smaller startups.
      - Retric 10y ago
        Samsung is not a Tech company, it's a multi-national conglomerate. It comprises numerous affiliated businesses,[1] most of them united under the Samsung brand, and is the largest South Korean chaebol (business conglomerate) https://en.wikipedia.org/wiki/Samsung https://en.wikipedia.org/wiki/Samsung Microsoft/Google are multinational companies but their core business has remained. Samsung on the other hand did food processing, textiles, insurance, securities and retail and only got into the electronics industry after close to 30 years.
curiousDog 10y ago
Does this mean they're about to IPO? I should probably interview with them ASAP then.
- sloanesturz 10y ago
  I think it's the opposite.
kilroy123 10y ago
I'm not surprised to see Airbnb became profitable. They've expanded everywhere. I nomad around and always use Airbnb, I've booked places on several continents. However, I'm definitely feeling the effects of their growing pains. For example, many people have bought places to only rent on Airbnb full-time. Most of these people suck at being an hotelier. It's clear people get lazy and are just trying to make money. Think about how many hotels you've stayed at that were less than stellar? It's hard to have a good hotel with full-time staff. It's much harder when it's just you on the side, renting some place. I've been to many horrible Airbnb's that I had to checkout of early, and go find a new place last minute. Unless, they fix this and get more people to review honestly. I think they're going to run into a lot of problems.
- dragonwriter 10y ago
  > Unless, they fix this and get more people to review honestly. I think they're going to run into a lot of problems. I don't airBnB, but a friend who does was recently berated by a host after leaving a 4-star review; that host claimed (don't know how true this is) that many hosts will refuse to rent to you again if you leave anything but a 5-star review. That and other things I've seen and heard about airBnB reviews suggest to me that there a structural problems that are likely to make it problematic for them to become honest and useful in general, even on top of the usual problems in numeric/star rated reviews that come from cultural differences in how people rate when given such a scale even when the actual substantive opinion is the same.
  - MichaelGG 10y ago
    Isn't that why AirBnB is pushing the Instant Reservation system really hard?
    - supernovae 10y ago
      Nah, that's mostly to reduce the long tail of rentals.. in some cases it takes months to turn a person into a customer and book now/instant reservation helps shorten this cycle and reduce off platform fishers/scammers.
nakedrobot2 10y ago
This feels like another example the new gilded age, where the spoils of capitalism stay at the top.
beefman 10y ago
We haven't had a recession in 8 years, and the postwar average time between recessions is 6 years.[1] The stock market's overall PE ratio is well above average.[2] With Box and Snap, the market demonstrated it is starving for tech IPOs -- even if a company is losing money and entirely based on a millennial fad. So why in the name of sweet baby Jesus would investors, founders, or anyone else delay an IPO at this point? Can anyone explain it? [1] http://www.nber.org/cycles.html http://www.nber.org/cycles.html [2] http://www.multpl.com http://www.multpl.com
- Tloewald 10y ago
  Maybe the smart money is on a market shock in the next several months and IPOs are leery of something terrible happening during the window between announcement and implementation. We do, after all, have a very strange political situation.
- harryh 10y ago
  Not an answer to your question but semi-relatedly Scott Sumner had a post this week where he predicts that recessions will be significantly rarer in the future. http://www.themoneyillusion.com/?p=32350 http://www.themoneyillusion.com/?p=32350 It's interesting to think about.
  - deleted 10y ago
    [deleted]
  - warcher 10y ago
    It is interesting, but "this time it's different" is a song I have heard before. I am deeply disconcerted at extending the time between recessions; would much prefer shallower corrections more frequently.
  - sytelus 10y ago
    These predictions are pointless. Economy is not driven by extrapolating past charts, it's driven by outlier events. The thing about outlier events is that no one can predict what they would be, except that they are bound to happen. A magnitude 9 earthquake in Northwest, fraud in big company, scandal in administration, or war with Iran - all these can totally change economic outlook.
deleted 10y ago
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xiaoma 10y ago
Have their early employees been able to cash out yet or are they basically trapped into either losing their hard earned options from work done years ago or staying still more years at the company?
- metaphorm 10y ago
  they can always exercise their options, buy the stocks, pay the taxes on them, and then just sit on illiquid assets until the IPO or their own deaths. oh...it's not a very appealing prospect you say? well, hmmm, errr, awkward.
saycheese 10y ago
Airbnb's growth as it relates to stays to per a night has been 500k since at least 2014 and as recent as mid-2016. In 2015, they stated they wanted a million stays per a night by 2016. Any reason to believe Airbnb is really growing?
mfringel 10y ago
I'll admit, I'm pretty amazed that AirBnB has succeeded. I never thought that injecting even more uncertainty into travel was a winning proposition, but they've clearly found a willing market. Perhaps a better way to look at it is "There was an underserved market that had a higher tolerance for uncertainty, and AirBnB seized the opportunity."
Tiktaalik 10y ago
I wonder if they’ll still be profitable as more and more cities become aware of the negative side effects of Airbnb use and implement various sorts of bans on types of commercial Airbnb activity. A researcher at UBC estimated that commercial operators were responsible for generating 77% of Airbnb revenue in Vancouver. The City of Vancouver is planning on legalizing Airbnb, but will ban commercial operators that rent out entire residences. This will likely significantly reduce the amount of commercially operated Airbnbs in the city and this could result in significantly less revenue that Airbnb generates from Vancouver. If this researchers’ numbers are at all reasonably accurate, and other cities have similar levels of commercial activity, and the trend of cities banning commercial operators catches on, that would be a major impact on Airbnb revenue. http://www.theglobeandmail.com/news/british-columbia/vancouvers-top-airbnb-earners-are-commercial-hosts-research/article30324477/ http://www.theglobeandmail.com/news/british-columbia/vancouv...
rpearl 10y ago
I've definitely had mixed experiences with AirBnB. When it's genuinely someone renting a spare room on the side, it tends to be a neat experience; I had several of those traveling in Australia solo and it was a good way to get to know the area. I also had positive experiences in Rome and LA with similar arrangements. When it's just landlords short-term renting a furnished apartment on the side, the experience tends to be subpar. The worst experience I had was in Chicago, when it was clearly a condo owner breaking the terms of the HOA for their building--they told us to say that we were 'just visiting' the occupants of the apartment, not to unlock the door if an actual resident was nearby, etc. The general feeling of "sneaking around" was unpleasant. It's a mixed bag--the original idea of home sharing is a great experience, but clearly not the most profitable aspect of their business. I wonder if they could figure out ways to support that better...
yueq 10y ago
Expedia's market cap is at 19B today. 31B is much more valuable than it.
- notahacker 10y ago
  Every time I see AirBnB's latest valuation, I compare it with Sabre (bigger, higher value hotel room inventory... and they've also got a profitable airline distribution and consulting business). SABR market cap is around $6bn
rampage101 10y ago
I helped my parents rent an AirBNB where the people owning the house were still living there but it said nothing about this in the ad. After the owner gave us the keys, a few hours later somebody opened the door, and I seriously thought it might be a robber or something. Turns out it was the son of the owner who was living there, and basically my parents were renting a single room inside of their house. It was very uncomfortable for everyone.
sperling75 10y ago
The hogging of VC funds by airbnb, uber, and many other not startups is super unhealthy for the startup ecosystem. The public markets will eventually punish these companies for valuations that lack transparency. Airbnb is on the way out with their current short term renting business in most large cities. It's illegal and the quality of service is suffering dramatically. Supply side quality is on the way down. Demand side quality is terrible too. To justify their valuation they are opening up the gates to terrible customers. I get it, they may go into other markets with all this money like the long term rental business or tours business or airline flights.. maybe hotels? Reality is they are not going to be great or better at any of these things than the current companies in those markets and certainly not by any significant degree to own the market.
- sperling75 10y ago
  If you are down voting why not offer some opinion so it can be a discussion..
  - dlubarov 10y ago
    I didn't downvote, but your claims could use some justification. What makes you think quality is declining? Personal experience? Second hand anecdotes? Media stories?
    - sperling75 10y ago
      Personal experience. It's fairly obvious if you have been using the service for any length of time in cities like SF, NYC, LA, Berlin, Paris, Barcelona, really any large city that has banned or curtailed the legal offering of the service. The result is you have a lot more people offering properties where it is banned leading to awkward situations for customers. The listings are not permanent and get removed as soon as they receive a bad review. There are no checks on host providers at all. I actually think it is not any better than craigslist at this point.
  - untilHellbanned 10y ago
    Upvoted but sadly you can't take YC prodigy and downvote. It's a lose-lose propositon kinda like staying in an airbnb. Say something nice about YC or don't say something at all.
jliptzin 10y ago
I used to use airbnb quite often (as a traveler), but I have to say it's lost its appeal for me. First, it's really not much cheaper than a hotel in most cases (some cases more expensive). Second, it's a hassle when you're on vacation to have to arrange in advance a specific time to pick up the keys to the place. Then, what happens if you happen to lose the keys (happened to me once)? What happens if it's in the middle of the night in a foreign country? This could be a nightmare. On top of that, you're expected to leave the apartment like you never stayed there or face bad reviews (even with a $100+ cleaning fee)! Seriously, one time I got stuck with a terrible review because I left a dirty pan in the sink (had to rush to the airport, I figured the $100 cleaning fee would cover what minor things I had left behind, but guess not). So now I've pretty much gone back to hotels. You can come any time of day or night, not have to worry at all about losing keys, and you can leave the place a raging mess if you have to (though I am usually a very clean person). Airbnb makes the whole travel experience far more stressful for me.
- jupiter90000 10y ago
  Maybe it depends on the place you're going; I can't find anywhere nearly comparable in price for a month stay to AirBnB options with local hotels at a location I'm going to soon. Even pretty bad hotels are at least 2.5x the price of a lower end non-shared AirBnB rental
- nojvek 10y ago
  Totally agree. I got scammed with fancy airbnb pictures a couple of times and now I don't go near it with a 100ft pole. It's totally lost its feel of welcoming host. Now it's just another hotel that's poorly run by people who want to make a quick buck. I stay to hotels even if it's slightly expensive. The level of service and quality is always guaranteed
  - bogomipz 10y ago
    That stinks. I'm a hotel person myself but I am curious did you have any recourse with AirBnB when this happened?
taytus 10y ago
And they are still being called a startup...
bedhead 10y ago
I booked a spare room in London a couple years ago in the Mayfair neighborhood, a quite expensive area. The woman who owned the flat wasn't the one in the photo, and a number of things about the flat seemed rather odd. Long story short, she was a prostitute.
- Symbiote 10y ago
  > Mayfair You can upgrade your description to "most expensive area in central London". It's the final, £400 property on the London version of the Monopoly board, and is still worthy of that position. The woman would probably prefer the term "high class escort". I think it's supposed to mean you can have a conversation afterwards. Example -- NSFW, obviously: http://www.hautegirlslondon.com/ http://www.hautegirlslondon.com/
ptenk 10y ago
My AirBnB experiences have all been poor, despite staying exclusively at 4.5/5 star reviewed properties. The lack of service isn't worth the extra savings or superior hardware. Hotels are so much more comfortable due to the constant service/follow up in case anything goes wrong.
mosselman 10y ago
So when we say '$31B valuation' what does that mean in real money? Lets say that I am the founder of airbnb, how much of that money could I get when I sold the business?
nstj 10y ago
> That's EBITDA profitability, according to the Wall Street Journal, meaning that expenses like taxes are not included [0] So it's profitable - as long as you exclude such meaningless items as "interest, tax, depreciation, amortisation". Nice. [0]: original post.
beedogs 10y ago
Another company that shouldn't be allowed to exist.
xbeta 10y ago
My experience tells me Airbnb is in big trouble. Last year around Nov, I tried to book a Lake Tahoe cabin for 2 families (1 is mine, another is a friend's) for a simple trip for our young children. I booked via Airbnb few days in advanced. The day before driving to Tahoe, we even called Airbnb to confirm that the listing is OK. The host accepted, but didn't answer to any of our questions. The next morning when we woke up, we packed everything, then out of bad habit, I opened up the app and checked again. I was caught on surprised that the host cancelled, just 4 hrs before our suppose arrival time. We were very shocked and pissed. I was booking for a friend's family and it was very embarrassed. I immediately contacted Airbnb support, and all they call do for me was to give me $100 back for my NEXT reservation. And they couldn't do anything about my existing. I thought they would put a penalty on Airbnb's host who cancelled on us in less than 24 hrs, but they said they don't have such policy. I was upset because I knew they had such policy for the renter. They also mentioned the best they can do is to find me the next 10 houses to book in the similar location, but cost 3x more as it is bit last minute. They did not anything else to help me. I was very upset and went to Homeaway.com and found something immediately, even cheaper than the original reservation I had with Airbnb. My story was a clear first-hand witness on how I believed Airbnb failed at customer service, and will be very difficult to become a successfully company.
- jeremyis 10y ago
  this is for a vacation rental. Most of Airbnbs listings are not that (Homeaway or VRBO is the leader)...
  - ricardobeat 10y ago
    What are they?
- knn 10y ago
  Sorry you had that bad experience (I would be pissed too), but the logic of (you having a singular bad experience therefore company will likely die) is next to baseless.
  - 10y ago
omurphy27 10y ago
I spent 12 months as a digital nomad in SE Asia and AirBnB was a godsend for me. If you're checking in at some place you've never been to in the middle of the night, then of course a hotel is a better option. Likewise if you can't be bothered to tidy up a bit before checking out, then a hotel is the way to go. Personally, for short stays, like a few days or a weekend, I'll go with a hotel. But for anything of a week or longer, AirBnB is terrific. Through AirBnb I was able to book very nice condo apartments, with awesome amenities (rooftop swimming pools, brand new gym facilities etc) and very gracious local hosts who showed me things I never would have been able to discover on my own. Moreover, with AirBnb I don't have to worry about landlords ripping me off like I would if I actually signed a rental contract in a foreign country. I think most of this criticism is rather petty. AirBnb isn't a hotel or hostel replacement and it isn't supposed to be.
Travellersrest 10y ago
Airbnb is a "disruptor" apparently and a Unicorn. What did they disrupt? The housing market for sure in certain cities. 90 day booking restrictions for example (London), banned in Berlin etc. The Airbnb service startups now have limitations on their business plans and on the ground issues, residents abuse and legal challenges. This is disruptive and not necessarily a good thing. Airbnb has opened up new tourist routes and brought income to airlines and local businesses, so the economic contribution has been interesting. But what is the real message. "Live like a local". I know personally that even if you live in a foreign land for several years it's hard to live a like a local. Its smart marketing, the offer of shared spaces and local people. This was the shared house approach it all started with. This is long gone. Head off to airdna.co and check out the stats on whole apartments. It's a misnomer and still carries through in the press. Is it better than a hotel? Depends: If its more space and similar price then maybe, always depends on this vs location, its quality, is it really licensed or allowed, and how convenient is entry. You can of course have parties that hotels may frown on! Hotels have front desks, are quality controlled and for most business people so much more convenient with bars and breakfasts. They also tend to have well organised support and be in convenient locations, You can always use Uber to get a cheap taxi though...Uber and Airbnb, neat merger. As this thread shows all the latter can be a problem and hence the "SuperHost" status. Do Airbnb love Super Hosts? Yes of course. Reviews pay booking dividends . But Super Hosts don't always let their places all year and being smart cookies realise being paid at checkout, being charged a commission and the guest paying up to 12% extra could mean more money in their pocket if they did it direct. Many are direct marketing too and certainly doing rebookings direct. Do Airbnb see this as a problem? Of course, they want 24/7 and all the margin. This is why they hate leakage and try to force instant book and convenient cancellations. This is also guest centric and owner impossible for so many. The two are hard to equate. Booking.com's mantra "Most rooms with free cancellation" is the killer, but does NOT apply 90% of the time to their rental inventory. Clever marketing again! Airbnb also want to ensure quality inventory and no come-back. Hard with a thousands of unstandardised accommodation. Bad review police-ing is expensive! Do Airbnb want to be in the main holiday rentals seasonal space? Yes, they just bought Luxury Retreats for $200m, but even this is a slippery fish as these are mainly managers and owners who market everywhere and want/need maximum margin. It's an unusual play but maybe just paying to understand the market more. Trying to forcing any form or control on these properties may well see further industry rebellion. Add in the Trips launch and other revenue streams and you can see strategically they realise a zenith is approaching on the main models and which company needs so much litigation? Best prices? Lots of comments on this. The best price is always likely to be direct, price parity slipped out the backdoor years ago. The "Guest Service Fee" is not charged direct. Imagine paying $2000 and then seeing a further $200+ as a service fee. Look under the question mark at checkout, it's their fee not the accommodations. This is beginning to annoy people (a lot). They could often just book direct with a little searching. It may take 10 minutes, and that's $1200 per hour work! Even lawyers struggle to get that! The big brands: Expedia (inc HomeAway), Booking.com, TripAdvisor, Airbnb, essentially offer the same thing and thousands of properties are advertised on all of them simultaneously as they sit out front and use the guest fees to pay Google Search (the real controller). The smart guests are using them to identify great places and then phoning and emailing direct (using Google again) but saving money and getting more information. Ref: https://www.smarthosts.org/posts/BnTAS2ujKWfNw47TW/airbnb-s-getting-a-lot-of-negative-comments-on-a-popular https://www.smarthosts.org/posts/BnTAS2ujKWfNw47TW/airbnb-s-...
Travellersrest 10y ago
Airbnb is a "disruptor" apparently and a Unicorn. What did they disrupt? The housing market for sure in certain cities. 90 day booking restrictions for example (London), banned in Berlin etc. The Airbnb service startups now have limitations on their business plans and on the ground issues, residents abuse and legal challenges. This is disruptive and not necessarily a good thing. Airbnb has opened up new tourist routes and brought income to airlines and local businesses, so the economic contribution has been interesting. But what is the real message. "Live like a local". I know personally that even if you live in a foreign land for several years it's hard to live a like a local. Its smart marketing, the offer of shared spaces and local people. This was the shared house approach it all started with. This is long gone. Head off to airdna.co and check out the stats on whole apartments. It's a misnomer and still carries through in the press. Is it better than a hotel? Depends: If its more space and similar price then maybe, always depends on this vs location, its quality, is it really licensed or allowed, and how convenient is entry. You can of course have parties that hotels may frown on! Hotels have front desks, are quality controlled and for most business people so much more convenient with bars and breakfasts. They also tend to have well organised support and be in convenient locations, You can always use Uber to get a cheap taxi though...Uber and Airbnb, neat merger. As this thread shows all the latter can be a problem and hence the "SuperHost" status. Do Airbnb love Super Hosts? Yes of course. Reviews pay booking dividends . But Super Hosts don't always let their places all year and being smart cookies realise being paid at checkout, being charged a commission and the guest paying up to 12% extra could mean more money in their pocket if they did it direct. Many are direct marketing too and certainly doing rebookings direct. Do Airbnb see this as a problem? Of course, they want 24/7 and all the margin. This is why they hate leakage and try to force instant book and convenient cancellations. This is also guest centric and owner impossible for so many. The two are hard to equate. Booking.com's mantra "Most rooms with free cancellation" is the killer, but does NOT apply 90% of the time to their rental inventory. Clever marketing again! Airbnb also want to ensure quality inventory and no come-back. Hard with a thousands of unstandardised accommodation. Bad review police-ing is expensive! Do Airbnb want to be in the main holiday rentals seasonal space? Yes, they just bought Luxury Retreats for $200m, but even this is a slippery fish as these are mainly managers and owners who market everywhere and want/need maximum margin. It's an unusual play but maybe just paying to understand the market more. Trying to forcing any form or control on these properties may well see further industry rebellion. Add in the Trips launch and other revenue streams and you can see strategically they realise a zenith is approaching on the main models and which company needs so much litigation? Best prices? Lots of comments on this. The best price is always likely to be direct, price parity slipped out the backdoor years ago. The "Guest Service Fee" is not charged direct. Imagine paying $2000 and then seeing a further $200+ as a service fee. Look under the question mark at checkout, it's their fee not the accommodations. This is beginning to annoy people (a lot). They could often just book direct with a little searching. It may take 10 minutes, and that's $1200 per hour work! Even lawyers struggle to get that! The big brands: Expedia (inc HomeAway), Booking.com, TripAdvisor, Airbnb, essentially offer the same thing and thousands of properties are advertised on all of them simultaneously as they sit out front and use the guest fees to pay Google Search (the real controller). The smart guests are using them to identify great places and then phoning and emailing direct (using Google again) but saving money and getting more information. Ref: https://www.smarthosts.org/posts/BnTAS2ujKWfNw47TW/airbnb-s-getting-a-lot-of-negative-comments-on-a-popular https://www.smarthosts.org/posts/BnTAS2ujKWfNw47TW/airbnb-s-...
swampy61 10y ago
I'm finished with Airbnb as the places get shabbier with each booking. Linens are threadbare, kitchens have dirty/stained pots & utensils and suddenly 4-6 flight walk ups without a mention in the listing. Zero customer service to boot. I'll pay the few dollars extra for a hotel.

342 points by sloanesturz 10y ago

A shame that they didn't raise this money through an IPO. I'm afraid of how long unicorns are staying private: it's a big bummer for their employees and early investors. It'll be a tough sell for early employees of the next batch of unicorns if Uber, Airbnb, Palantir, Dropbox, etc. stay private for 10-15 years or more!

alehul 10y ago
If investors are enthusiastically in disagreement about the potential of a company (both the buy + sell sides), it's probably better for the company's valuation to stay private. It blocks out any negative opinions' effect that you'd have if public via investors shorting / betting against the company. This probably leads to an overly high valuation it wouldn't hold up to on the stock market, though, (i.e. Uber) so then the company feels pressured to stay private until they can justify that overly high valuation. In Uber's case, though, they'll keep raising money at absurd valuations and keep the cycle going. Palantir is an exception: If they were public and had to disclose much information, their value would plummet, so it'll likely stay private in the foreseeable future.
- frgtpsswrdlame 10y ago
  Isn't that bad for employees with stock options though? The market could tell them how much those options are really worth.
  - alehul 10y ago
    Completely, and a small part of why employees are cautioned on here to take salary over equity. The market telling them would be a loss of billions for the investors/founders, both on the value of their own equity and the increased equity they'd have to offer employees (many exceptions apply, but this seems to be the case particularly with startups who lack an easy path to profitability but can show substantial growth).
  - hkmurakami 10y ago
    Palantir will regularly buy its employees' equity fwiw.
    - jonknee 10y ago
      But without the market you could easily be getting ripped off selling your shares back... They're not doing it out of the goodness of their heart.
jlgosse 10y ago
I'm not saying this is the case with this round in particular, but it's not unheard of for early employees to take money off the table in a round like this
- brandur 10y ago
  The company isn't compelled in any way to allow this though, and is actually disincentivized from doing so because it increases the probability of key departures as those people are able to extract some value. If you're in such a position, you better hope that your founders _really_ like you.
  - amenghra 10y ago
    Many companies have periods of time where you get an opportunity to cash out a percentage of your equity. It gives confidence to early employees that the company has their back and they aren't really disincentivized to leave because they still have a majority of their equity "locked".
  - bogomipz 10y ago
    I believe most do though, but with a right of first refusal. In which case they will buy them of direct you to their preferred buyer. Source: I have done this and my conversation with the broker for the secondary market who handles a lot of this said it is quite common and that in fact other at the same company I was at had done so. It might be frowned upon internally but you have to look out for yourself. Staying at a startup for 8+ plus years isn't very realistic for me personally.
- maineldc 10y ago
  There was a very "insider baseball" moment in 2011 with regards to AirBNB and a well known investor "discussing" taking money off the table. Note, the investor was basically saying that if the founders get some liquidity, you should offer the same to employees. I will never forget how much that raise my esteem him. [0] So yes, if they were willing to do it in 2011, I am sure that they are doing it in this round too. [0] - https://techcrunch.com/2011/10/01/chamath-palihapitiya-airbnb-liquidity-everyone/ https://techcrunch.com/2011/10/01/chamath-palihapitiya-airbn...
muninn_ 10y ago
Becoming a public company has it's own set of issues, though.
- elastic_church 10y ago
  Yeah weird how people hold up IPO as a holy grail. Its the worst thing to do if you are actually passionate about the company, if it is your labor of love. Its the best thing to do if you want to make a lot of money from your money machine and are largely apathetic about the outcome of the business itself. Easy enough to find the next MBA graduate to feign passion for you while they are just trying to sell the company.
  - imranq 10y ago
    why is this downvoted? every company I've worked at that has IPO'd companies has been, in my experience, soul-sucking.
  - muninn_ 10y ago
    Yeah I lean toward this view as well. The point of an IPO is to raise capital. But when you do this, unless you own 51% of the company or there is a small group of like-minded individuals that own 51% of the company, you can wind up losing control and instead of doing things Wall Street doesn't like, you're going to have to focus on profitability and pleasing shareholders. It's one route to take, but not the only one.
    - hagbarth 10y ago
      Yeah, but AirBnB took that route when they got private investors. They expect to get their money back with a good ROI. That would be through an IPO or acquisition, either way you loose control of your company.
      - zenlikethat 10y ago
        True, you lose some control, but a small board of a private company is much easier to convince and compel on long-term vision and plans than the general public.
rpearl 10y ago
Dropbox and AirBnB have already been private for almost 10 years! (Palantir - 13!, Uber - 8) I was at Dropbox for a while and left in no small part because of the frustrating lack of potential liquidity on my equity.
- rickcnagy 10y ago
  I don't know, something feels off about Palantir being around for 6227020800 (13!) years...
- trustfundbaby 10y ago
  wow ... did you give up all your vested options? or at least buy a bit of them?
- chii 10y ago
  i expect companies that remain private while dangling equities for it's employees to create an opportunity for them to sell privately - e.g., a liquidation event, where the buyer is an investment/VC firm that wants in. It's good for both parties - employees get a liquidation event, the VC gets foot in the door, and founders aren't diluted. I guess, though, in this case, the employee is the party without power, as they are offered a price (which is probably lowballed, since they don't have a choice) in a take it or leave it fashion...

ganfortran 10y ago

If they are already profitable, why raise money again?

Judgmentality 10y ago
If you can raise money on great terms, it's usually in your best interest to do so. Maybe they want to build up their war chest as they see increasing regulatory hassles, more competition, and a possible downturn in the market. I'd also guess they are expanding their scope now to more expensive endeavors, as they are building physical hotels now (and probably many other things they haven't announced yet). http://www.businessinsider.com/airbnb-builds-hotel-japan-community-samara-yoshino-2016-8 http://www.businessinsider.com/airbnb-builds-hotel-japan-com...
- ganfortran 10y ago
  Wow, that is an interesting move. If that is the route they are going after, it is more understandable.
101km 10y ago
Profitable can also mean $1.
ucaetano 10y ago
You can be profitable but still be burning cash in a few different ways. Profitable looks only at profit, not at cash flow, so it only means that "booked revenue in a year > booked costs in a year". Keep in mind that capital expenses are not costs, but are cash expenses. Also, some revenue in a given year might not be a cash transaction, because even if you booked it in that year, it might take much longer for you to actually get paid. Some of the ways to burn cash: (1) Expand operations: hiring people, hiring external services, leasing offices, leasing capacity, etc. All that happens far before any additional revenue comes in. (2) Capex: capital expenses (buying servers, equipment, etc.) require cold, hard cash (or debt, which "costs" more than equity for a startup, so it is better to do equity funding). (3) Working capital (current assets - current liabilities): some companies have positive (they receive the revenue cash before dispensing the costs cash) working capital, using their customers' money to expand the operations, others have negative working capital, requiring external funding to expand their operations. My guess is that (2) and (3) don't apply for AirBnB, they are not a capital-intensive business, and as they get paid when the booking is done but pay out when the guest arrives, their working capital might actually be positive. So they probably need it to expand operations.

rs86 10y ago

1b @ 30b is very weird.

maxxxxx 10y ago

They should stop calling companies like Airbnb "startups". They are big companies now and should be treated as such.

alehul 10y ago
Working for a company like Google, FB or even Airbnb or a questionable 'startup' is still much different than working for any other type of company. It's even markedly different than working for tech companies that would never be referred to as startups, such as Samsung, AMD or even HP. These large companies (FB, Google, etc) may no longer be bootstrapped and employees may no longer have versatile roles, but they still resemble what we'd call 'startup culture.' It seems reasonable to define a startup based on culture rather than size, though it's not so etymologically sound. edit: If you disagree, please comment why rather than downvote! This is a question I've heard people discuss extensively and would appreciate input or an opposing perspective.
- CPLX 10y ago
  But we have a phrase for that already, those things are called "tech companies"
  - alehul 10y ago
    Then we'd have to group in rather standard, traditional Samsung-like companies though, which seem to be just as different work experiences from FB or Google as FB or Google is different from newer, smaller startups.
    - Retric 10y ago
      Samsung is not a Tech company, it's a multi-national conglomerate. It comprises numerous affiliated businesses,[1] most of them united under the Samsung brand, and is the largest South Korean chaebol (business conglomerate) https://en.wikipedia.org/wiki/Samsung https://en.wikipedia.org/wiki/Samsung Microsoft/Google are multinational companies but their core business has remained. Samsung on the other hand did food processing, textiles, insurance, securities and retail and only got into the electronics industry after close to 30 years.

curiousDog 10y ago

Does this mean they're about to IPO? I should probably interview with them ASAP then.

sloanesturz 10y ago
I think it's the opposite.

kilroy123 10y ago

I'm not surprised to see Airbnb became profitable. They've expanded everywhere. I nomad around and always use Airbnb, I've booked places on several continents. However, I'm definitely feeling the effects of their growing pains. For example, many people have bought places to only rent on Airbnb full-time. Most of these people suck at being an hotelier. It's clear people get lazy and are just trying to make money. Think about how many hotels you've stayed at that were less than stellar? It's hard to have a good hotel with full-time staff. It's much harder when it's just you on the side, renting some place. I've been to many horrible Airbnb's that I had to checkout of early, and go find a new place last minute. Unless, they fix this and get more people to review honestly. I think they're going to run into a lot of problems.

dragonwriter 10y ago
> Unless, they fix this and get more people to review honestly. I think they're going to run into a lot of problems. I don't airBnB, but a friend who does was recently berated by a host after leaving a 4-star review; that host claimed (don't know how true this is) that many hosts will refuse to rent to you again if you leave anything but a 5-star review. That and other things I've seen and heard about airBnB reviews suggest to me that there a structural problems that are likely to make it problematic for them to become honest and useful in general, even on top of the usual problems in numeric/star rated reviews that come from cultural differences in how people rate when given such a scale even when the actual substantive opinion is the same.
- MichaelGG 10y ago
  Isn't that why AirBnB is pushing the Instant Reservation system really hard?
  - supernovae 10y ago
    Nah, that's mostly to reduce the long tail of rentals.. in some cases it takes months to turn a person into a customer and book now/instant reservation helps shorten this cycle and reduce off platform fishers/scammers.

nakedrobot2 10y ago

This feels like another example the new gilded age, where the spoils of capitalism stay at the top.

beefman 10y ago

We haven't had a recession in 8 years, and the postwar average time between recessions is 6 years.[1] The stock market's overall PE ratio is well above average.[2] With Box and Snap, the market demonstrated it is starving for tech IPOs -- even if a company is losing money and entirely based on a millennial fad. So why in the name of sweet baby Jesus would investors, founders, or anyone else delay an IPO at this point? Can anyone explain it? [1] http://www.nber.org/cycles.html http://www.nber.org/cycles.html [2] http://www.multpl.com http://www.multpl.com

Tloewald 10y ago
Maybe the smart money is on a market shock in the next several months and IPOs are leery of something terrible happening during the window between announcement and implementation. We do, after all, have a very strange political situation.
harryh 10y ago
Not an answer to your question but semi-relatedly Scott Sumner had a post this week where he predicts that recessions will be significantly rarer in the future. http://www.themoneyillusion.com/?p=32350 http://www.themoneyillusion.com/?p=32350 It's interesting to think about.
- deleted 10y ago
  [deleted]
- warcher 10y ago
  It is interesting, but "this time it's different" is a song I have heard before. I am deeply disconcerted at extending the time between recessions; would much prefer shallower corrections more frequently.
- sytelus 10y ago
  These predictions are pointless. Economy is not driven by extrapolating past charts, it's driven by outlier events. The thing about outlier events is that no one can predict what they would be, except that they are bound to happen. A magnitude 9 earthquake in Northwest, fraud in big company, scandal in administration, or war with Iran - all these can totally change economic outlook.

deleted 10y ago

[deleted]

xiaoma 10y ago

Have their early employees been able to cash out yet or are they basically trapped into either losing their hard earned options from work done years ago or staying still more years at the company?

metaphorm 10y ago
they can always exercise their options, buy the stocks, pay the taxes on them, and then just sit on illiquid assets until the IPO or their own deaths. oh...it's not a very appealing prospect you say? well, hmmm, errr, awkward.

saycheese 10y ago

Airbnb's growth as it relates to stays to per a night has been 500k since at least 2014 and as recent as mid-2016. In 2015, they stated they wanted a million stays per a night by 2016. Any reason to believe Airbnb is really growing?

mfringel 10y ago

I'll admit, I'm pretty amazed that AirBnB has succeeded. I never thought that injecting even more uncertainty into travel was a winning proposition, but they've clearly found a willing market. Perhaps a better way to look at it is "There was an underserved market that had a higher tolerance for uncertainty, and AirBnB seized the opportunity."

Tiktaalik 10y ago

I wonder if they’ll still be profitable as more and more cities become aware of the negative side effects of Airbnb use and implement various sorts of bans on types of commercial Airbnb activity. A researcher at UBC estimated that commercial operators were responsible for generating 77% of Airbnb revenue in Vancouver. The City of Vancouver is planning on legalizing Airbnb, but will ban commercial operators that rent out entire residences. This will likely significantly reduce the amount of commercially operated Airbnbs in the city and this could result in significantly less revenue that Airbnb generates from Vancouver. If this researchers’ numbers are at all reasonably accurate, and other cities have similar levels of commercial activity, and the trend of cities banning commercial operators catches on, that would be a major impact on Airbnb revenue. http://www.theglobeandmail.com/news/british-columbia/vancouvers-top-airbnb-earners-are-commercial-hosts-research/article30324477/ http://www.theglobeandmail.com/news/british-columbia/vancouv...

rpearl 10y ago

I've definitely had mixed experiences with AirBnB. When it's genuinely someone renting a spare room on the side, it tends to be a neat experience; I had several of those traveling in Australia solo and it was a good way to get to know the area. I also had positive experiences in Rome and LA with similar arrangements. When it's just landlords short-term renting a furnished apartment on the side, the experience tends to be subpar. The worst experience I had was in Chicago, when it was clearly a condo owner breaking the terms of the HOA for their building--they told us to say that we were 'just visiting' the occupants of the apartment, not to unlock the door if an actual resident was nearby, etc. The general feeling of "sneaking around" was unpleasant. It's a mixed bag--the original idea of home sharing is a great experience, but clearly not the most profitable aspect of their business. I wonder if they could figure out ways to support that better...

yueq 10y ago

Expedia's market cap is at 19B today. 31B is much more valuable than it.

notahacker 10y ago
Every time I see AirBnB's latest valuation, I compare it with Sabre (bigger, higher value hotel room inventory... and they've also got a profitable airline distribution and consulting business). SABR market cap is around $6bn

rampage101 10y ago

I helped my parents rent an AirBNB where the people owning the house were still living there but it said nothing about this in the ad. After the owner gave us the keys, a few hours later somebody opened the door, and I seriously thought it might be a robber or something. Turns out it was the son of the owner who was living there, and basically my parents were renting a single room inside of their house. It was very uncomfortable for everyone.

sperling75 10y ago

The hogging of VC funds by airbnb, uber, and many other not startups is super unhealthy for the startup ecosystem. The public markets will eventually punish these companies for valuations that lack transparency. Airbnb is on the way out with their current short term renting business in most large cities. It's illegal and the quality of service is suffering dramatically. Supply side quality is on the way down. Demand side quality is terrible too. To justify their valuation they are opening up the gates to terrible customers. I get it, they may go into other markets with all this money like the long term rental business or tours business or airline flights.. maybe hotels? Reality is they are not going to be great or better at any of these things than the current companies in those markets and certainly not by any significant degree to own the market.

sperling75 10y ago
If you are down voting why not offer some opinion so it can be a discussion..
- dlubarov 10y ago
  I didn't downvote, but your claims could use some justification. What makes you think quality is declining? Personal experience? Second hand anecdotes? Media stories?
  - sperling75 10y ago
    Personal experience. It's fairly obvious if you have been using the service for any length of time in cities like SF, NYC, LA, Berlin, Paris, Barcelona, really any large city that has banned or curtailed the legal offering of the service. The result is you have a lot more people offering properties where it is banned leading to awkward situations for customers. The listings are not permanent and get removed as soon as they receive a bad review. There are no checks on host providers at all. I actually think it is not any better than craigslist at this point.
- untilHellbanned 10y ago
  Upvoted but sadly you can't take YC prodigy and downvote. It's a lose-lose propositon kinda like staying in an airbnb. Say something nice about YC or don't say something at all.

jliptzin 10y ago

I used to use airbnb quite often (as a traveler), but I have to say it's lost its appeal for me. First, it's really not much cheaper than a hotel in most cases (some cases more expensive). Second, it's a hassle when you're on vacation to have to arrange in advance a specific time to pick up the keys to the place. Then, what happens if you happen to lose the keys (happened to me once)? What happens if it's in the middle of the night in a foreign country? This could be a nightmare. On top of that, you're expected to leave the apartment like you never stayed there or face bad reviews (even with a $100+ cleaning fee)! Seriously, one time I got stuck with a terrible review because I left a dirty pan in the sink (had to rush to the airport, I figured the $100 cleaning fee would cover what minor things I had left behind, but guess not). So now I've pretty much gone back to hotels. You can come any time of day or night, not have to worry at all about losing keys, and you can leave the place a raging mess if you have to (though I am usually a very clean person). Airbnb makes the whole travel experience far more stressful for me.

jupiter90000 10y ago
Maybe it depends on the place you're going; I can't find anywhere nearly comparable in price for a month stay to AirBnB options with local hotels at a location I'm going to soon. Even pretty bad hotels are at least 2.5x the price of a lower end non-shared AirBnB rental
nojvek 10y ago
Totally agree. I got scammed with fancy airbnb pictures a couple of times and now I don't go near it with a 100ft pole. It's totally lost its feel of welcoming host. Now it's just another hotel that's poorly run by people who want to make a quick buck. I stay to hotels even if it's slightly expensive. The level of service and quality is always guaranteed
- bogomipz 10y ago
  That stinks. I'm a hotel person myself but I am curious did you have any recourse with AirBnB when this happened?

taytus 10y ago

And they are still being called a startup...

bedhead 10y ago

I booked a spare room in London a couple years ago in the Mayfair neighborhood, a quite expensive area. The woman who owned the flat wasn't the one in the photo, and a number of things about the flat seemed rather odd. Long story short, she was a prostitute.

Symbiote 10y ago
> Mayfair You can upgrade your description to "most expensive area in central London". It's the final, £400 property on the London version of the Monopoly board, and is still worthy of that position. The woman would probably prefer the term "high class escort". I think it's supposed to mean you can have a conversation afterwards. Example -- NSFW, obviously: http://www.hautegirlslondon.com/ http://www.hautegirlslondon.com/

ptenk 10y ago

My AirBnB experiences have all been poor, despite staying exclusively at 4.5/5 star reviewed properties. The lack of service isn't worth the extra savings or superior hardware. Hotels are so much more comfortable due to the constant service/follow up in case anything goes wrong.

mosselman 10y ago

So when we say '$31B valuation' what does that mean in real money? Lets say that I am the founder of airbnb, how much of that money could I get when I sold the business?

nstj 10y ago

> That's EBITDA profitability, according to the Wall Street Journal, meaning that expenses like taxes are not included [0] So it's profitable - as long as you exclude such meaningless items as "interest, tax, depreciation, amortisation". Nice. [0]: original post.

beedogs 10y ago

Another company that shouldn't be allowed to exist.

xbeta 10y ago

My experience tells me Airbnb is in big trouble. Last year around Nov, I tried to book a Lake Tahoe cabin for 2 families (1 is mine, another is a friend's) for a simple trip for our young children. I booked via Airbnb few days in advanced. The day before driving to Tahoe, we even called Airbnb to confirm that the listing is OK. The host accepted, but didn't answer to any of our questions. The next morning when we woke up, we packed everything, then out of bad habit, I opened up the app and checked again. I was caught on surprised that the host cancelled, just 4 hrs before our suppose arrival time. We were very shocked and pissed. I was booking for a friend's family and it was very embarrassed. I immediately contacted Airbnb support, and all they call do for me was to give me $100 back for my NEXT reservation. And they couldn't do anything about my existing. I thought they would put a penalty on Airbnb's host who cancelled on us in less than 24 hrs, but they said they don't have such policy. I was upset because I knew they had such policy for the renter. They also mentioned the best they can do is to find me the next 10 houses to book in the similar location, but cost 3x more as it is bit last minute. They did not anything else to help me. I was very upset and went to Homeaway.com and found something immediately, even cheaper than the original reservation I had with Airbnb. My story was a clear first-hand witness on how I believed Airbnb failed at customer service, and will be very difficult to become a successfully company.

jeremyis 10y ago
this is for a vacation rental. Most of Airbnbs listings are not that (Homeaway or VRBO is the leader)...
- ricardobeat 10y ago
  What are they?
knn 10y ago
Sorry you had that bad experience (I would be pissed too), but the logic of (you having a singular bad experience therefore company will likely die) is next to baseless.
- 10y ago

omurphy27 10y ago

I spent 12 months as a digital nomad in SE Asia and AirBnB was a godsend for me. If you're checking in at some place you've never been to in the middle of the night, then of course a hotel is a better option. Likewise if you can't be bothered to tidy up a bit before checking out, then a hotel is the way to go. Personally, for short stays, like a few days or a weekend, I'll go with a hotel. But for anything of a week or longer, AirBnB is terrific. Through AirBnb I was able to book very nice condo apartments, with awesome amenities (rooftop swimming pools, brand new gym facilities etc) and very gracious local hosts who showed me things I never would have been able to discover on my own. Moreover, with AirBnb I don't have to worry about landlords ripping me off like I would if I actually signed a rental contract in a foreign country. I think most of this criticism is rather petty. AirBnb isn't a hotel or hostel replacement and it isn't supposed to be.

Travellersrest 10y ago

Airbnb is a "disruptor" apparently and a Unicorn. What did they disrupt? The housing market for sure in certain cities. 90 day booking restrictions for example (London), banned in Berlin etc. The Airbnb service startups now have limitations on their business plans and on the ground issues, residents abuse and legal challenges. This is disruptive and not necessarily a good thing. Airbnb has opened up new tourist routes and brought income to airlines and local businesses, so the economic contribution has been interesting. But what is the real message. "Live like a local". I know personally that even if you live in a foreign land for several years it's hard to live a like a local. Its smart marketing, the offer of shared spaces and local people. This was the shared house approach it all started with. This is long gone. Head off to airdna.co and check out the stats on whole apartments. It's a misnomer and still carries through in the press. Is it better than a hotel? Depends: If its more space and similar price then maybe, always depends on this vs location, its quality, is it really licensed or allowed, and how convenient is entry. You can of course have parties that hotels may frown on! Hotels have front desks, are quality controlled and for most business people so much more convenient with bars and breakfasts. They also tend to have well organised support and be in convenient locations, You can always use Uber to get a cheap taxi though...Uber and Airbnb, neat merger. As this thread shows all the latter can be a problem and hence the "SuperHost" status. Do Airbnb love Super Hosts? Yes of course. Reviews pay booking dividends . But Super Hosts don't always let their places all year and being smart cookies realise being paid at checkout, being charged a commission and the guest paying up to 12% extra could mean more money in their pocket if they did it direct. Many are direct marketing too and certainly doing rebookings direct. Do Airbnb see this as a problem? Of course, they want 24/7 and all the margin. This is why they hate leakage and try to force instant book and convenient cancellations. This is also guest centric and owner impossible for so many. The two are hard to equate. Booking.com's mantra "Most rooms with free cancellation" is the killer, but does NOT apply 90% of the time to their rental inventory. Clever marketing again! Airbnb also want to ensure quality inventory and no come-back. Hard with a thousands of unstandardised accommodation. Bad review police-ing is expensive! Do Airbnb want to be in the main holiday rentals seasonal space? Yes, they just bought Luxury Retreats for $200m, but even this is a slippery fish as these are mainly managers and owners who market everywhere and want/need maximum margin. It's an unusual play but maybe just paying to understand the market more. Trying to forcing any form or control on these properties may well see further industry rebellion. Add in the Trips launch and other revenue streams and you can see strategically they realise a zenith is approaching on the main models and which company needs so much litigation? Best prices? Lots of comments on this. The best price is always likely to be direct, price parity slipped out the backdoor years ago. The "Guest Service Fee" is not charged direct. Imagine paying $2000 and then seeing a further $200+ as a service fee. Look under the question mark at checkout, it's their fee not the accommodations. This is beginning to annoy people (a lot). They could often just book direct with a little searching. It may take 10 minutes, and that's $1200 per hour work! Even lawyers struggle to get that! The big brands: Expedia (inc HomeAway), Booking.com, TripAdvisor, Airbnb, essentially offer the same thing and thousands of properties are advertised on all of them simultaneously as they sit out front and use the guest fees to pay Google Search (the real controller). The smart guests are using them to identify great places and then phoning and emailing direct (using Google again) but saving money and getting more information. Ref: https://www.smarthosts.org/posts/BnTAS2ujKWfNw47TW/airbnb-s-getting-a-lot-of-negative-comments-on-a-popular https://www.smarthosts.org/posts/BnTAS2ujKWfNw47TW/airbnb-s-...

Travellersrest 10y ago

swampy61 10y ago

I'm finished with Airbnb as the places get shabbier with each booking. Linens are threadbare, kitchens have dirty/stained pots & utensils and suddenly 4-6 flight walk ups without a mention in the listing. Zero customer service to boot. I'll pay the few dollars extra for a hotel.