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I heard that Airbnb's business is actually stronger in US and Europe now than pre-pandemic, as tourism shifts towards local and people shy away from hotels. On

I heard that Airbnb's business is actually stronger in US and Europe now than pre-pandemic, as tourism shifts towards local and people shy away from hotels. On the other hand, they're still in money saving mode, reducing ad spending and laying people off. Anyone know what is going on?

hkmurakami 6y ago
organizational bloat.
tenebrisalietum 6y ago
IBM lawsuit
- breck 6y ago
  Wow, I didn't hear about this. How sad that IBM is now a patent troll.
  - gen220 6y ago
    Yeah. Unfortunately it's a nontrivial source of revenue. In 2018 they sued Groupon for $167m and got $83m. Interesting quotes from an article [0] reporting on it include: > In 2017 IBM generated about $1.2 billion in revenue from its licensing activities. > An IBM licensing executive testified that Amazon, Facebook, Google, LinkedIn and Twitter have each paid IBM $20 million to $50 million as part of cross-licensing deals that gave them access to the patent portfolio. > IBM lawyer John Desmarais told jurors the company had no choice but to sue after Groupon refused to take responsibility for using IBM’s foundational technology. > “The verdict is a vindication for IBM’s licensing program,” Desmarais said by phone. It looks like they've been at it for a while, too. They sued Amazon in 2006 [1]. Quotes from that reporting: > IBM alleges that Amazon.com knowingly exploits its intellectual property by infringing on several patents that cover, among other things, the presentation of applications in an interactive service, the storage of data in an interactive network, the presentation of advertising in an interactive service, and the ordering of items from an electronic catalog. While doing some digging, I stumbled across this [2] super interesting scoop on how IBM views and remunerates successful patent-applicant-employees, from 2001. Makes sense to give out bonuses for patents, when they weaponize them this way. Gross. :/ [0]: https://www.reuters.com/article/us-ibm-groupon-lawsuit-idUSKBN1KH2CL https://www.reuters.com/article/us-ibm-groupon-lawsuit-idUSK... [1]: https://www.computerworld.com/article/2547652/ibm-sues-amazon-com-over-patents.html https://www.computerworld.com/article/2547652/ibm-sues-amazo... [2]: https://www.eetimes.com/ees-want-a-bigger-piece-of-patent-royalty-pie/ https://www.eetimes.com/ees-want-a-bigger-piece-of-patent-ro...
- echelon 6y ago
  https://www.forbes.com/sites/washingtonbytes/2020/03/13/airbnbs-woe-now-includes-ibms-patent-infringement-suit/#7dd702a44221 https://www.forbes.com/sites/washingtonbytes/2020/03/13/airb... > Thes patents at issue are used primarily in e-commerce—and some of them date back to the time of dial-up technologies such as Prodigy. Dial-up era!? Patents shouldn't last that long! This is centuries in technology! I think the only valid use for software patents (if there are any at all), is to prevent bigger players from moving into your space. But small companies don't have the time, energy, or money to wage fights in the courtroom. They have pressing existential issues. Companies without products are patent trolls and shouldn't be permitted to have them. If you "invent" yet don't do anything with it, what good are you to society? Ossified and decaying companies like IBM shouldn't be allowed to trample upstarts. It's all so backwards.
  - jefftk 6y ago
    US patents last 20 years, which is pretty reasonable. Prodigy ran until 2001, just under 20 years ago.
hn_throwaway_99 6y ago
From knowledge of the travel industry: 1. Hotels are still in the dumps. 2. Single home rentals, a la VRBO and AirBnB, are doing fantastic as people decamp from urban areas and work remotely. 3. Urban rentals are in the shitter. 4. Shared spaces are also in the shitter. AirBnB has a lot more urban inventory and shared spaces than for example VRBO (which was always more based around vacation destinations), but I have no idea if their split between urban and vacation destinations is an overall boon or hindrance for them.
- jacobwal 6y ago
  I think you're overall on the money here, but I would probably be a bit more cautious on #3 (at least private units). Some of the managed rental providers that focus on urban markets seem to be doing OK. Sonder raised a new round in June[1], albeit after laying off part of their workforce. 1: https://shorttermrentalz.com/news/sonder-series-e-round-june/ https://shorttermrentalz.com/news/sonder-series-e-round-june...
- cco 6y ago
  If urban areas are in the shitter it sure isn't reflected in the prices. Prices in Seattle and Portland at least are still as strong as they were pre-pandemic.
  - thebean11 6y ago
    NYC rental prices are down easily 20%
Thaxll 6y ago
I highly doubt they make more money now than before covid.
dogma1138 6y ago
This is at least as far as the UK goes, Brighton 2 weekend ago was £430 for 2 nights for 2 people in the Mercure which is kinda well meh facility wise. Hotels basically are either closed for renovation or jacked up the prices while closing down everything that they had as an advantage over AB&B. The restaurant is closed, there is no room cleaning unless you explicitly book it a day in advance, the gym, spa and pools are closed and so are all other in-house attractions and services such as the children play areas, lounges, media rooms etc. So you have higher prices than pre-pandemic in many places due to them having to recoup their losses and a much much much worst service than usual which already in many places in Europe was a hit and miss outside of the large resorts and world renowned hotels the hotel service and overall quality in Europe is pretty shite.
syshum 6y ago
Another big factor in Airbnb, like other "platforms" like this vs their traditional counterparts, they have no assets that incurr costs no matter how down the market it Hilton, Marriott, etc all still have MASSIVE amounts of physical property that they have to maintain year around no matter if they are full or empty. Airbnb has none of those costs. This makes them more flexible and are able to quickly respond to changes in the travel market, more so than their traditional competitors
- admax88q 6y ago
  Marriott doesn't own their hotels, they lease them from third party owners. I would wager that Hilton is doing the same.
  - syshum 6y ago
    I dont know about the Marriott family of brands specifically but I would image like most large companies in this sector they have a Mix of Franchisees and Direct owned properties. Hilton Certainly does under several of its brands. This Franchise model does not change my statement really at all, as it is far different model than what airbnb has
  - namdnay 6y ago
    Do they lease them? I got the impression that it’s closer to a franchise model (for all major chains)
  - heavenlyblue 6y ago
    Does leasing change the fact that you still need to maintain the property and pay the lease?
- janitor_monkey 6y ago
  Actually Marriott works with a franchise model. If the franchisee goes bankrupt, that's a problem for Marriott... but it is also a problem for Airbnb (many owners of several properties are going bankrupt). As an anecdote, I had an Airbnb stay in Rome but the landlord went bankrupt due to Covid and had to close the business.
alfalfasprout 6y ago
There aren't further layoffs, this information is inaccurate.
simias 6y ago
I live in a very touristic neighborhood in Lisbon and several of the apartments in my building are rented full time through AirBnB & friends and it's definitely still a lot quieter than pre-covid, and we're in August when there should be tourists everywhere. It's only one datapoint of course but from this very limited perspective it seems very hard for me to believe that their business would be stronger now than pre-covid. But hotels are probably suffering even more, that's true.
- opportune 6y ago
  Personally I’d love to spend some time in Lisbon but as an American I’m pretty sure I (rightly) wouldn’t be allowed in your country. So travel restrictions are probably the issue there
  - simias 6y ago
    Sure, that's part of the problem, but I think that's not a purely Portuguese thing. Hence why I have some difficulty believing that AirBnB would be thriving right now.
nostromo 6y ago
The timing is certainly interesting... Presuming Airbnb makes it through the crisis, they're set up for many quarters of blistering earnings "growth" as things return to normal.
- mgiampapa 6y ago
  The timing probably has more to do with expiring options than it specifically does around strength of the market or the business.
- mrkramer 6y ago
  I think their assumption is that investors will jump on the stock when pandemic ends and optimism surges.
davidsawyer 6y ago
Brian Chesky pretty much said exactly this in his interview with Guy Raz on How I Built This a week or so ago. https://www.facebook.com/watch/live/?v=594606847885635 https://www.facebook.com/watch/live/?v=594606847885635
romanoderoma 6y ago
I moved back to Rome from Milan because I knew that without tourism (from US in particular) rents would go down I'm now in the process of choosing between 2 houses both in the most exclusive part of the city centre, a thing I could only dream of until few months ago, at the same price I was renting an apartment in Milan in an average neighborhood Most of the listings are former Airbnb places, you can tell when you visit the houses that packing up so many beds to maximize profit didn't pay, that level of service could only be acceptable by youngsters looking for a cheap place to crash during the two nights spent in Rome with friends, but it actually lowered the real value of the apartments a lot, to the point that many of them are corridors with the same number of rooms and bathrooms, but not a living room or a kitchen, hence impossible to live in unless you enjoy suffering. Unfortunately for them young tourists and cheap flights will not come back for at least a few years So now their properties are basically worthless Agencies that were managing the properties have abandoned the business or are selling their licenses (good luck with that!) and owners have to face the choice of renewing and waiting at least next year to start renting again or lower the prices and avoid more losses, but accept a long term contract which binds them for at least 3+2 years As I said many of them are not worth it even if the rent went down considerably so it's not even easy to rent in this economy, even owning an apartment in a super exclusive neighborhood rented at half the price, also considering that people who can afford it don't pay for shitty places full of sofa-beds and cheap furniture. all the listings say the same thing "NO AIRBNB, NO HOLIDAY RENTALS, NO AGENCIES" they only want to deal with medium-long term rentals with trusted people after checking their income. I'm quite sure even after covid airbnb and all the businesses around it won't come back, at least not in Rome, not in the same way, people are fed up with mass tourism and businesses are starting to enjoy working more with locals who actually live in the neighborhood, like it used to be not so long ago, but were forced to leave by the "tourist-pay-double-for-shit" craze. It happened and until it worked, it worked, but when it stopped it left ruins I think people have opened their eyes Airbnb will still be the preferred way to rent a van on a beautiful beach on a Greek island where a couple can spend few romantic nights, but the idea that it was going to improve the fabric of our old cities is dead IMO
tempsy 6y ago
they are benefiting from rise of the "local summer getaway" but that's only one season of the year. what happens in the fall and winter? and to business travel?
mrkramer 6y ago
Local tourism is fine but international is not. Airline travel is not fully functional yet.
- mancerayder 6y ago
  Right. How can AirBNB be hopping with airlines down 70-80 percent?

hkmurakami 6y ago

organizational bloat.

tenebrisalietum 6y ago

IBM lawsuit

breck 6y ago
Wow, I didn't hear about this. How sad that IBM is now a patent troll.
- gen220 6y ago
  Yeah. Unfortunately it's a nontrivial source of revenue. In 2018 they sued Groupon for $167m and got $83m. Interesting quotes from an article [0] reporting on it include: > In 2017 IBM generated about $1.2 billion in revenue from its licensing activities. > An IBM licensing executive testified that Amazon, Facebook, Google, LinkedIn and Twitter have each paid IBM $20 million to $50 million as part of cross-licensing deals that gave them access to the patent portfolio. > IBM lawyer John Desmarais told jurors the company had no choice but to sue after Groupon refused to take responsibility for using IBM’s foundational technology. > “The verdict is a vindication for IBM’s licensing program,” Desmarais said by phone. It looks like they've been at it for a while, too. They sued Amazon in 2006 [1]. Quotes from that reporting: > IBM alleges that Amazon.com knowingly exploits its intellectual property by infringing on several patents that cover, among other things, the presentation of applications in an interactive service, the storage of data in an interactive network, the presentation of advertising in an interactive service, and the ordering of items from an electronic catalog. While doing some digging, I stumbled across this [2] super interesting scoop on how IBM views and remunerates successful patent-applicant-employees, from 2001. Makes sense to give out bonuses for patents, when they weaponize them this way. Gross. :/ [0]: https://www.reuters.com/article/us-ibm-groupon-lawsuit-idUSKBN1KH2CL https://www.reuters.com/article/us-ibm-groupon-lawsuit-idUSK... [1]: https://www.computerworld.com/article/2547652/ibm-sues-amazon-com-over-patents.html https://www.computerworld.com/article/2547652/ibm-sues-amazo... [2]: https://www.eetimes.com/ees-want-a-bigger-piece-of-patent-royalty-pie/ https://www.eetimes.com/ees-want-a-bigger-piece-of-patent-ro...
echelon 6y ago
https://www.forbes.com/sites/washingtonbytes/2020/03/13/airbnbs-woe-now-includes-ibms-patent-infringement-suit/#7dd702a44221 https://www.forbes.com/sites/washingtonbytes/2020/03/13/airb... > Thes patents at issue are used primarily in e-commerce—and some of them date back to the time of dial-up technologies such as Prodigy. Dial-up era!? Patents shouldn't last that long! This is centuries in technology! I think the only valid use for software patents (if there are any at all), is to prevent bigger players from moving into your space. But small companies don't have the time, energy, or money to wage fights in the courtroom. They have pressing existential issues. Companies without products are patent trolls and shouldn't be permitted to have them. If you "invent" yet don't do anything with it, what good are you to society? Ossified and decaying companies like IBM shouldn't be allowed to trample upstarts. It's all so backwards.
- jefftk 6y ago
  US patents last 20 years, which is pretty reasonable. Prodigy ran until 2001, just under 20 years ago.

hn_throwaway_99 6y ago

From knowledge of the travel industry: 1. Hotels are still in the dumps. 2. Single home rentals, a la VRBO and AirBnB, are doing fantastic as people decamp from urban areas and work remotely. 3. Urban rentals are in the shitter. 4. Shared spaces are also in the shitter. AirBnB has a lot more urban inventory and shared spaces than for example VRBO (which was always more based around vacation destinations), but I have no idea if their split between urban and vacation destinations is an overall boon or hindrance for them.

jacobwal 6y ago
I think you're overall on the money here, but I would probably be a bit more cautious on #3 (at least private units). Some of the managed rental providers that focus on urban markets seem to be doing OK. Sonder raised a new round in June[1], albeit after laying off part of their workforce. 1: https://shorttermrentalz.com/news/sonder-series-e-round-june/ https://shorttermrentalz.com/news/sonder-series-e-round-june...
cco 6y ago
If urban areas are in the shitter it sure isn't reflected in the prices. Prices in Seattle and Portland at least are still as strong as they were pre-pandemic.
- thebean11 6y ago
  NYC rental prices are down easily 20%

Thaxll 6y ago

I highly doubt they make more money now than before covid.

dogma1138 6y ago

This is at least as far as the UK goes, Brighton 2 weekend ago was £430 for 2 nights for 2 people in the Mercure which is kinda well meh facility wise. Hotels basically are either closed for renovation or jacked up the prices while closing down everything that they had as an advantage over AB&B. The restaurant is closed, there is no room cleaning unless you explicitly book it a day in advance, the gym, spa and pools are closed and so are all other in-house attractions and services such as the children play areas, lounges, media rooms etc. So you have higher prices than pre-pandemic in many places due to them having to recoup their losses and a much much much worst service than usual which already in many places in Europe was a hit and miss outside of the large resorts and world renowned hotels the hotel service and overall quality in Europe is pretty shite.

syshum 6y ago

Another big factor in Airbnb, like other "platforms" like this vs their traditional counterparts, they have no assets that incurr costs no matter how down the market it Hilton, Marriott, etc all still have MASSIVE amounts of physical property that they have to maintain year around no matter if they are full or empty. Airbnb has none of those costs. This makes them more flexible and are able to quickly respond to changes in the travel market, more so than their traditional competitors

admax88q 6y ago
Marriott doesn't own their hotels, they lease them from third party owners. I would wager that Hilton is doing the same.
- syshum 6y ago
  I dont know about the Marriott family of brands specifically but I would image like most large companies in this sector they have a Mix of Franchisees and Direct owned properties. Hilton Certainly does under several of its brands. This Franchise model does not change my statement really at all, as it is far different model than what airbnb has
- namdnay 6y ago
  Do they lease them? I got the impression that it’s closer to a franchise model (for all major chains)
- heavenlyblue 6y ago
  Does leasing change the fact that you still need to maintain the property and pay the lease?
janitor_monkey 6y ago
Actually Marriott works with a franchise model. If the franchisee goes bankrupt, that's a problem for Marriott... but it is also a problem for Airbnb (many owners of several properties are going bankrupt). As an anecdote, I had an Airbnb stay in Rome but the landlord went bankrupt due to Covid and had to close the business.

alfalfasprout 6y ago

There aren't further layoffs, this information is inaccurate.

simias 6y ago

I live in a very touristic neighborhood in Lisbon and several of the apartments in my building are rented full time through AirBnB & friends and it's definitely still a lot quieter than pre-covid, and we're in August when there should be tourists everywhere. It's only one datapoint of course but from this very limited perspective it seems very hard for me to believe that their business would be stronger now than pre-covid. But hotels are probably suffering even more, that's true.

opportune 6y ago
Personally I’d love to spend some time in Lisbon but as an American I’m pretty sure I (rightly) wouldn’t be allowed in your country. So travel restrictions are probably the issue there
- simias 6y ago
  Sure, that's part of the problem, but I think that's not a purely Portuguese thing. Hence why I have some difficulty believing that AirBnB would be thriving right now.

nostromo 6y ago

The timing is certainly interesting... Presuming Airbnb makes it through the crisis, they're set up for many quarters of blistering earnings "growth" as things return to normal.

mgiampapa 6y ago
The timing probably has more to do with expiring options than it specifically does around strength of the market or the business.
mrkramer 6y ago
I think their assumption is that investors will jump on the stock when pandemic ends and optimism surges.

davidsawyer 6y ago

Brian Chesky pretty much said exactly this in his interview with Guy Raz on How I Built This a week or so ago. https://www.facebook.com/watch/live/?v=594606847885635 https://www.facebook.com/watch/live/?v=594606847885635

romanoderoma 6y ago

I moved back to Rome from Milan because I knew that without tourism (from US in particular) rents would go down I'm now in the process of choosing between 2 houses both in the most exclusive part of the city centre, a thing I could only dream of until few months ago, at the same price I was renting an apartment in Milan in an average neighborhood Most of the listings are former Airbnb places, you can tell when you visit the houses that packing up so many beds to maximize profit didn't pay, that level of service could only be acceptable by youngsters looking for a cheap place to crash during the two nights spent in Rome with friends, but it actually lowered the real value of the apartments a lot, to the point that many of them are corridors with the same number of rooms and bathrooms, but not a living room or a kitchen, hence impossible to live in unless you enjoy suffering. Unfortunately for them young tourists and cheap flights will not come back for at least a few years So now their properties are basically worthless Agencies that were managing the properties have abandoned the business or are selling their licenses (good luck with that!) and owners have to face the choice of renewing and waiting at least next year to start renting again or lower the prices and avoid more losses, but accept a long term contract which binds them for at least 3+2 years As I said many of them are not worth it even if the rent went down considerably so it's not even easy to rent in this economy, even owning an apartment in a super exclusive neighborhood rented at half the price, also considering that people who can afford it don't pay for shitty places full of sofa-beds and cheap furniture. all the listings say the same thing "NO AIRBNB, NO HOLIDAY RENTALS, NO AGENCIES" they only want to deal with medium-long term rentals with trusted people after checking their income. I'm quite sure even after covid airbnb and all the businesses around it won't come back, at least not in Rome, not in the same way, people are fed up with mass tourism and businesses are starting to enjoy working more with locals who actually live in the neighborhood, like it used to be not so long ago, but were forced to leave by the "tourist-pay-double-for-shit" craze. It happened and until it worked, it worked, but when it stopped it left ruins I think people have opened their eyes Airbnb will still be the preferred way to rent a van on a beautiful beach on a Greek island where a couple can spend few romantic nights, but the idea that it was going to improve the fabric of our old cities is dead IMO

tempsy 6y ago

they are benefiting from rise of the "local summer getaway" but that's only one season of the year. what happens in the fall and winter? and to business travel?

mrkramer 6y ago

Local tourism is fine but international is not. Airline travel is not fully functional yet.

mancerayder 6y ago
Right. How can AirBNB be hopping with airlines down 70-80 percent?