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I think you missed the point about the local vs international services. AirBNB has potential competitors, but effectively those competitors need to have an int
by treis 9y ago
I think you missed the point about the local vs international services. AirBNB has potential competitors, but effectively those competitors need to have an international or at least national scope. AirBnB makes most of its money on tourists that will use their service over an over again in a different city. Most people will use something like ChicagoAirBnB.com once when they go to Chicago for their vacation that year. Thus, ChicagoAirBnB.com would need to make their entire customer acquisition cost back in one transaction. That's far less viable than AirBnB which can spread it out over dozens of transactions. AirBnB's problem (if it has one) is that there's dozens of competitors with that scope in the online travel industry. They are just missing the supply.
Compare with ride sharing. In that case, your business is almost entirely local. Someone that uses ChicagoUber will likely use it for as long as they live in Chicago. So you can spend $20 (or $100, or $200) to acquire that customer and make it back over time. The result is that Uber has to defend their turf against theoretically thousands of competitors across the globe.
- Spivak 9y ago> tourists that will use their service over an over again in a different city This is the part that I don't think follows. Why would they? There are a million different travel sites and people do their homework. There's nothing preventing people from using different booking sites for each trip. I see an advantage in having a large portfolio of hosts but I don't think they will ever be at the point of charging a premium because they have lock-in.
- valuearb 9y agoExcept that the Uber app works in every city and has lots of drivers in every city. Most People aren’t going to download the app for some local company to test if they have drivers. They know Uber works and that it will work when they travel. Brand matters and Ubers works.
- remotorboater 9y agouber ride is worth what, 25% of $10-20 airbnb is worth 10-15% of $50-500 the fact that you can use uber in other cities doesnt matter. it only matters in your home city. the travel platform however needs to be ubiquitous it is too easy to compete with uber and almost impossible to compete with airbnb 1 city vs 100 cities...