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Airbnb started a large arbitrage process. Kinda the same one booking.com and the others are in. It's the nature of the game of arbitrage that it changes. That i

by creer 3y ago

Airbnb started a large arbitrage process. Kinda the same one booking.com and the others are in. It's the nature of the game of arbitrage that it changes. That is its fundamental characteristic. Arbitrage is not static. Airbnb helped owners (and renters) realize they had an under-expoited asset. And travellers realize that hotels were over-priced and feature-poor. And consumers that booking services (travel agents) were often lax and complacent and sometimes true gems. Etc We are now in the phase where some Airbnbs really are overpriced as seen from the consumer side. But perhaps perfectly priced as seen by the owner (who perhaps wants fewer but higher priced rental days to better fit their own hassle overhead.) There is space for the prices to bounce around. And for some consumers they are still what they want: as others described, if you want more than a couple days and you want a real living place as opposed to just a place to sleep and desk. Does it mean that AirBnB disappears? Of course not. But their business has really changed, yes. Have they adapted enough? Are they continuing to adapt enough? What sounds more of a problem to me is that Airbnb has not solved its hassle issue: The inventices for the reviews to be effective don't seem right to me. And it has not solved its issue of relations with governments / voters: the supply of Airbnb is threatened pretty much everywhere. And while booking.com and the others seem highly diversified, perhaps not so for Airbnb.

thiago_fm 3y ago
That's true, it enabled people to explore that sector on their own, that typically meant a big investment (hotels/real state is expensive AF) Now it's basically: have a property and enjoy doing the backoffice of short term rentals (cleaning/basic accounting/being a host), and then you are essentially competing for customers that would typically go to a hotel/hostel. But if you think about it rationally, Hotels, even very cheap ones should be able to offer more services for less, given that a hotel cleaner can go room after room doing the work. The same is for other utilities like swimming pool etc, as it's shared, it's cheaper. There used to be a time when hotels were more expensive even though you could get an apartment for yourself with a pool and all those services, as well cleaning fees were lower. Nowadays after the arbitrage happened, things are more evened out. Anyways, I understand that for people with money or certain conditions, Airbnb is more interesting, but I can't see that model having a scale bigger than the old way, it's just a niche, and I think Airbnb at the moment fail to make that niche as profitable as the main thing.
- creer 3y ago
  So, for the people who got into the airbnb business not realizing that they were actually trying to run a hotel - buying more property, trying to run a whole pile of them - trying to make it their full time job... I don't have much sympathy. They are trying to game the airbnb world and making things painful for everyone - and they need to compete with actual hotels which they probably can't in the long run. And they are doing that with long cycle assets. That's obviously tough. But I see that it's tempting for Airbnb to cater to them: they bring in lots of properties. Airbnb will keep them on. it might be a way for Airbnb to diversify: treat these two a two different businesses. Airbnb-style hotels and rooms in a lived in apt and actually local's apts. Three separate offerings as opposed to a big pile of random stuff. But there was NO big investment for the people who offered the original Airbnb fare: one available room, or one available apartment.

by creer 3y ago

thiago_fm 3y ago

That's true, it enabled people to explore that sector on their own, that typically meant a big investment (hotels/real state is expensive AF) Now it's basically: have a property and enjoy doing the backoffice of short term rentals (cleaning/basic accounting/being a host), and then you are essentially competing for customers that would typically go to a hotel/hostel. But if you think about it rationally, Hotels, even very cheap ones should be able to offer more services for less, given that a hotel cleaner can go room after room doing the work. The same is for other utilities like swimming pool etc, as it's shared, it's cheaper. There used to be a time when hotels were more expensive even though you could get an apartment for yourself with a pool and all those services, as well cleaning fees were lower. Nowadays after the arbitrage happened, things are more evened out. Anyways, I understand that for people with money or certain conditions, Airbnb is more interesting, but I can't see that model having a scale bigger than the old way, it's just a niche, and I think Airbnb at the moment fail to make that niche as profitable as the main thing.

creer 3y ago
So, for the people who got into the airbnb business not realizing that they were actually trying to run a hotel - buying more property, trying to run a whole pile of them - trying to make it their full time job... I don't have much sympathy. They are trying to game the airbnb world and making things painful for everyone - and they need to compete with actual hotels which they probably can't in the long run. And they are doing that with long cycle assets. That's obviously tough. But I see that it's tempting for Airbnb to cater to them: they bring in lots of properties. Airbnb will keep them on. it might be a way for Airbnb to diversify: treat these two a two different businesses. Airbnb-style hotels and rooms in a lived in apt and actually local's apts. Three separate offerings as opposed to a big pile of random stuff. But there was NO big investment for the people who offered the original Airbnb fare: one available room, or one available apartment.