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This is fair. A lot of hotel groups have seen their revenue drop 75 to 90 percent. Airbnb was never profitable (I think) and this round of trip cancellations pu

This is fair. A lot of hotel groups have seen their revenue drop 75 to 90 percent. Airbnb was never profitable (I think) and this round of trip cancellations put them deeply in the red.

drwl 7y ago
> Airbnb was never profitable (I think) Do you have any sources for this?
- MegaButts 7y ago
  AirBnB first announced profitability in 2018, followed by 2019. https://www.bloomberg.com/news/articles/2019-01-15/airbnb-says-it-made-a-profit-again-in-2018-as-ipo-looms-large https://www.bloomberg.com/news/articles/2019-01-15/airbnb-sa... That said, I'm not sure how many asterisks are attached to the definition of profitable. Likewise, the fact that a company that holds no substantial assets while operating in the face of most regulations only became profitable in 2018, while clearly being the market leader, makes me wonder what is going on with their financials. It should not take 10 years for a company like AirBnB to become profitable, it should take closer to 5. I know they had a disagreement with their CFO in 2018, and it took them the better part of a year to find a replacement. Admittedly, the replacement seems incredibly qualified. https://www.cnbc.com/2018/11/26/airbnb-hires-cfo-dave-stephenson-amazon-exec.html https://www.cnbc.com/2018/11/26/airbnb-hires-cfo-dave-stephe...
  - listenallyall 7y ago
    No they didn't. Literally the first sentence of your Bloomberg link includes "based on a common measure that excludes some expenses." They made an EBITDA (operating) profit. They were not a profitable company.
- malandrew 7y ago
  What has happened to HN that asking for sources/evidence is now something that gets you downvoted? Asking for supporting evidence should never get downvoted.
qwerty456127 7y ago
Why was AirBnB never profitable? How do they even loose anything? All they seemingly do is maintaining a website a small team can maintain. Obviously they also pay for an office, hosting, legal support and ads. I can only see some millions (at most) of expenses per year here. And they are extremely popular, most of the people I meet use AirBnB regularly, they are for short-term living like what Gmail is for e-mail.
- meowface 7y ago
  Agreed. I don't know how software-based middle-man companies like Airbnb and Uber don't become insanely profitable. I'm sure we're both missing some complexities, but one would think you'd build the initial feature set and then basically be kind of done; is the rest not essentially just some UI/UX tweaks and engagement optimization over time? As far as I can tell, the functionality offered by Airbnb and Uber hasn't changed at all since they launched over a decade ago. The only things I've noticed them add are "Airbnb Plus" and "Uber Black", which are just "pay some more for a nicer/better-looking place/car". Of course building these apps to work as smoothly and engagement-y as possible isn't easy, and I'm sure I sound incredibly naive to many people who've worked at those companies, but my assumption would be that there'd be a lot of upfront investment and work building your one product with its one feature - connecting seekers and providers and offloading all the meatspace work to the providers (and phone manufacturers, for ridesharing) while you take a cut - and then your revenue and profit should just go up and up over time on its own. Why isn't that what happens? I'm sure one obvious answer would be "wasteful spending and unnecessary hiring", but I have no idea if that's actually the explanation here for either company.

This is fair. A lot of hotel groups have seen their revenue drop 75 to 90 percent. Airbnb was never profitable (I think) and this round of trip cancellations put them deeply in the red.

drwl 7y ago

> Airbnb was never profitable (I think) Do you have any sources for this?

MegaButts 7y ago
AirBnB first announced profitability in 2018, followed by 2019. https://www.bloomberg.com/news/articles/2019-01-15/airbnb-says-it-made-a-profit-again-in-2018-as-ipo-looms-large https://www.bloomberg.com/news/articles/2019-01-15/airbnb-sa... That said, I'm not sure how many asterisks are attached to the definition of profitable. Likewise, the fact that a company that holds no substantial assets while operating in the face of most regulations only became profitable in 2018, while clearly being the market leader, makes me wonder what is going on with their financials. It should not take 10 years for a company like AirBnB to become profitable, it should take closer to 5. I know they had a disagreement with their CFO in 2018, and it took them the better part of a year to find a replacement. Admittedly, the replacement seems incredibly qualified. https://www.cnbc.com/2018/11/26/airbnb-hires-cfo-dave-stephenson-amazon-exec.html https://www.cnbc.com/2018/11/26/airbnb-hires-cfo-dave-stephe...
- listenallyall 7y ago
  No they didn't. Literally the first sentence of your Bloomberg link includes "based on a common measure that excludes some expenses." They made an EBITDA (operating) profit. They were not a profitable company.
malandrew 7y ago
What has happened to HN that asking for sources/evidence is now something that gets you downvoted? Asking for supporting evidence should never get downvoted.

qwerty456127 7y ago

Why was AirBnB never profitable? How do they even loose anything? All they seemingly do is maintaining a website a small team can maintain. Obviously they also pay for an office, hosting, legal support and ads. I can only see some millions (at most) of expenses per year here. And they are extremely popular, most of the people I meet use AirBnB regularly, they are for short-term living like what Gmail is for e-mail.

meowface 7y ago
Agreed. I don't know how software-based middle-man companies like Airbnb and Uber don't become insanely profitable. I'm sure we're both missing some complexities, but one would think you'd build the initial feature set and then basically be kind of done; is the rest not essentially just some UI/UX tweaks and engagement optimization over time? As far as I can tell, the functionality offered by Airbnb and Uber hasn't changed at all since they launched over a decade ago. The only things I've noticed them add are "Airbnb Plus" and "Uber Black", which are just "pay some more for a nicer/better-looking place/car". Of course building these apps to work as smoothly and engagement-y as possible isn't easy, and I'm sure I sound incredibly naive to many people who've worked at those companies, but my assumption would be that there'd be a lot of upfront investment and work building your one product with its one feature - connecting seekers and providers and offloading all the meatspace work to the providers (and phone manufacturers, for ridesharing) while you take a cut - and then your revenue and profit should just go up and up over time on its own. Why isn't that what happens? I'm sure one obvious answer would be "wasteful spending and unnecessary hiring", but I have no idea if that's actually the explanation here for either company.