5 ms·

When AirBnB finally does IPO, who will want to buy it? What more growth could possibly come out amidst the increasing regulation?

wtvanhest 9y ago
I guess we will wait to find out. If all they do is execute and get to slow growth, cash flow is still worth a lot of money, just at a lower multiple than fast growing cash flow. IMO, experiences, business travel and even hotel booking are all viable growth models going forward.
vkou 9y ago
If you are optimistic about AirBnB as a business, outside of its ability to exploit legal loopholes: The same kind of growth that any new, deep pocketed entrant in the hospitality industry might have - it would just have to come at the expense of incumbents. In 30 years, an investor like that may hope that AirBnB might look more like Hilton Worldwide, then what it is today.
- brd 9y ago
  AirBnB is already worth more than Hilton. I think that's part of the point parent is trying to make.
  - vkou 9y ago
    Hilton owns ~800,000 suites across ~4,000 cities. This is great, but if travel were to drop by 20%, you'd now be paying for and maintaining empty rooms. The AirBnB network has ~3,000,000 suites across 60,000 cities. Even if they were to comply with all local laws, they would still have margins, and room to grow, and would weather downturns better then traditional hotel chains ('Sharing economy' means that they aren't stuck paying mortgages on rooms they can't rent during a recession.) They can also expand into the traditional hotel chain business, by building or buying properties.
    - ipsum2 9y ago
      > 'Sharing economy' means that they aren't stuck paying mortgages on rooms they can't rent during a recession. I'm not sure I understand, why is this not the case?
      - Naritai 9y ago
        It's the hosts who are stuck paying mortgages on rooms they can't rent, not AirBNB. To AirBNB a recession just shows up as a decline in the number of transactions on the site.
    - refurb 9y ago
      My understanding is that Hilton doesn't own any of the properties, they simply manage them under the Hilton name for their owners.[1] The practice of franchising is popular within the hospitality industry among most major hotel chains, as the parent company does not have to pay for the maintenance and overhead costs of franchised properties. [1]https://en.wikipedia.org/wiki/Hilton_Worldwide#Franchising https://en.wikipedia.org/wiki/Hilton_Worldwide#Franchising
      - dragonwriter 9y ago
        > My understanding is that Hilton doesn't own any of the properties Your own source says that 70% (by rooms) was franchised as of 2013, which suggests 30% is Hilton owned.
    - skinnymuch 9y ago
      Hilton definitely doesn’t own a lot of those hotels or suites.
user5994461 9y ago
Who cares? They're in one of the most profitable niche in the planet. They don't need IPO.
- matte_black 9y ago
  > Who cares? People who want to cash out.
- vthallam 9y ago
  Airbnb employers and Investors. Most funds have a 6 - 8 year timeline where they plan to cash out to certain extent, so there will be pressure from employees and investors alike.
  - matte_black 9y ago
    Yes, it looks like they are gradually working toward a narrative that allows them to keep pushing back the IPO as they continue along their "incredible journey".
  - ajmurmann 9y ago
    To make it worse, the fund gets dissolved after a while. So now instead of one VC firm you have to deal with dozens of investors.
philfrasty 9y ago
Isn't there much more for them to explore outside hosting guests? Their recent redesign focusing on „accomodations“ + „activities“ seems to indicate this. Companies like GetYourGuide raised $200 Mio. [1] just for activities alone. [1] https://www.crunchbase.com/organization/getyourguide https://www.crunchbase.com/organization/getyourguide
- teej 9y ago
  I think the market will continue to anchor their value on the number of listings and number of stays. AirBnB may be quickly growing revenue per user but that might not be enough to move the top line if listings is dropping. They seem to be losing left and right vs municipalities that don’t want them.
mbesto 9y ago
> When AirBnB finally does IPO, who will want to buy it? This is how the stock market works for IPOs of AirBnb's size: 1. Big financial institution client: "Get me higher return, maybe buy more of those cool tech stocks everyone is raving about. Can you buy the next FB?" 2. Big financial institution: "Sure thing, we got this AirBnB company coming up and it's supposed to be big, we're talking 50% YoY growth. On the other hand, we've got these 100-year-old blue chip companies growing at 4.5% every year that we can park your money. we also have prospectus on a new diet pill company that should show 10% increase YoY based on our analsysis. what say you?" 3. client: "give me that AirBnB one, I don't want to miss out on the action!" 4. institution: "you're the boss, talking with AirBnb's underwriter as we speak"
untog 9y ago
Every time I use AirBnb now it shows me "Experiences" before letting me actually see accommodation listings. I suspect this is a growth area they're eager to push, no matter how much it might annoy me and others who want to just find a place to stay.
- exclusiv 9y ago
  Yeah I think they've saturated the actual home stay sector for now. It's very hard and limited to create demand for anything, especially a rather new lodging offering. So they're pushing this experience stuff to try and differentiate and go for more growth as you mentioned along w restaurant bookings. It's annoying to me as well as a host and a renter. If they aren't careful they could cede market share to other competitors that allow and welcome host and renters to easily connect outside their system and remain focused on lodging. I don't understand their UX approach since it's easy enough to ask what the user is looking for and make it dynamic instead of blasting experiences everywhere. Or not be so pushy on experiences if I start a lodging search. Push it after.
yeukhon 9y ago
Isn't short-term investment an option here? Watch AirBnB stock price goes up in the first week of IPO, then cash out before AirBnB comes down? The hype and rise should make some happy. You don't have to believe in the business, you can just believe in the hype.

wtvanhest 9y ago

I guess we will wait to find out. If all they do is execute and get to slow growth, cash flow is still worth a lot of money, just at a lower multiple than fast growing cash flow. IMO, experiences, business travel and even hotel booking are all viable growth models going forward.

vkou 9y ago

If you are optimistic about AirBnB as a business, outside of its ability to exploit legal loopholes: The same kind of growth that any new, deep pocketed entrant in the hospitality industry might have - it would just have to come at the expense of incumbents. In 30 years, an investor like that may hope that AirBnB might look more like Hilton Worldwide, then what it is today.

brd 9y ago
AirBnB is already worth more than Hilton. I think that's part of the point parent is trying to make.
- vkou 9y ago
  Hilton owns ~800,000 suites across ~4,000 cities. This is great, but if travel were to drop by 20%, you'd now be paying for and maintaining empty rooms. The AirBnB network has ~3,000,000 suites across 60,000 cities. Even if they were to comply with all local laws, they would still have margins, and room to grow, and would weather downturns better then traditional hotel chains ('Sharing economy' means that they aren't stuck paying mortgages on rooms they can't rent during a recession.) They can also expand into the traditional hotel chain business, by building or buying properties.
  - ipsum2 9y ago
    > 'Sharing economy' means that they aren't stuck paying mortgages on rooms they can't rent during a recession. I'm not sure I understand, why is this not the case?
    - Naritai 9y ago
      It's the hosts who are stuck paying mortgages on rooms they can't rent, not AirBNB. To AirBNB a recession just shows up as a decline in the number of transactions on the site.
  - refurb 9y ago
    My understanding is that Hilton doesn't own any of the properties, they simply manage them under the Hilton name for their owners.[1] The practice of franchising is popular within the hospitality industry among most major hotel chains, as the parent company does not have to pay for the maintenance and overhead costs of franchised properties. [1]https://en.wikipedia.org/wiki/Hilton_Worldwide#Franchising https://en.wikipedia.org/wiki/Hilton_Worldwide#Franchising
    - dragonwriter 9y ago
      > My understanding is that Hilton doesn't own any of the properties Your own source says that 70% (by rooms) was franchised as of 2013, which suggests 30% is Hilton owned.
  - skinnymuch 9y ago
    Hilton definitely doesn’t own a lot of those hotels or suites.

user5994461 9y ago

Who cares? They're in one of the most profitable niche in the planet. They don't need IPO.

matte_black 9y ago
> Who cares? People who want to cash out.
vthallam 9y ago
Airbnb employers and Investors. Most funds have a 6 - 8 year timeline where they plan to cash out to certain extent, so there will be pressure from employees and investors alike.
- matte_black 9y ago
  Yes, it looks like they are gradually working toward a narrative that allows them to keep pushing back the IPO as they continue along their "incredible journey".
- ajmurmann 9y ago
  To make it worse, the fund gets dissolved after a while. So now instead of one VC firm you have to deal with dozens of investors.

philfrasty 9y ago

Isn't there much more for them to explore outside hosting guests? Their recent redesign focusing on „accomodations“ + „activities“ seems to indicate this. Companies like GetYourGuide raised $200 Mio. [1] just for activities alone. [1] https://www.crunchbase.com/organization/getyourguide https://www.crunchbase.com/organization/getyourguide

teej 9y ago
I think the market will continue to anchor their value on the number of listings and number of stays. AirBnB may be quickly growing revenue per user but that might not be enough to move the top line if listings is dropping. They seem to be losing left and right vs municipalities that don’t want them.

mbesto 9y ago

> When AirBnB finally does IPO, who will want to buy it? This is how the stock market works for IPOs of AirBnb's size: 1. Big financial institution client: "Get me higher return, maybe buy more of those cool tech stocks everyone is raving about. Can you buy the next FB?" 2. Big financial institution: "Sure thing, we got this AirBnB company coming up and it's supposed to be big, we're talking 50% YoY growth. On the other hand, we've got these 100-year-old blue chip companies growing at 4.5% every year that we can park your money. we also have prospectus on a new diet pill company that should show 10% increase YoY based on our analsysis. what say you?" 3. client: "give me that AirBnB one, I don't want to miss out on the action!" 4. institution: "you're the boss, talking with AirBnb's underwriter as we speak"

untog 9y ago

Every time I use AirBnb now it shows me "Experiences" before letting me actually see accommodation listings. I suspect this is a growth area they're eager to push, no matter how much it might annoy me and others who want to just find a place to stay.

exclusiv 9y ago
Yeah I think they've saturated the actual home stay sector for now. It's very hard and limited to create demand for anything, especially a rather new lodging offering. So they're pushing this experience stuff to try and differentiate and go for more growth as you mentioned along w restaurant bookings. It's annoying to me as well as a host and a renter. If they aren't careful they could cede market share to other competitors that allow and welcome host and renters to easily connect outside their system and remain focused on lodging. I don't understand their UX approach since it's easy enough to ask what the user is looking for and make it dynamic instead of blasting experiences everywhere. Or not be so pushy on experiences if I start a lodging search. Push it after.

yeukhon 9y ago

Isn't short-term investment an option here? Watch AirBnB stock price goes up in the first week of IPO, then cash out before AirBnB comes down? The hype and rise should make some happy. You don't have to believe in the business, you can just believe in the hype.