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Just to put this in perspect. Starwood has a valuation of about $10 billion. Starwood employs 150,000 people, has 1000 hotels worldwide, and has revenues of ~$
by sfard 14y ago
Just to put this in perspect. Starwood has a valuation of about $10 billion.
Starwood employs 150,000 people, has 1000 hotels worldwide, and has revenues of ~$6 billion
I'm not saying AirBNB can't be huge one day, but a $2B valuation... wow.
- andrewljohnson 14y agoYeah, you are right... that makes it very clear why AirBnB is so valuable. If it takes Starwood 150,000 people to make $6B, and AirBnB can make hundreds of millions with hundreds of people, I think it's pretty clear which is headed to a bigger valuation.
- fletchowns 14y agoOr it's just way overvalued
- dmix 14y agoStarwoods is valued on the public stock market, not private investors. It might not seem like it, but theres a difference.
- CoachRufus87 14y agoFor example: Facebook ($FB)
- andyakb 14y agoyou cannot make these comparisons. the valuation multiplier based on revenues changes by the industry. an industry with HUUUUUGE overhead [expensive real estate and tons of staff] cannot be compared at all by revenue to a tech startup that will never have anywhere near that amount of overhead. is the valuation high? potentially, but this is not a metric that will tell you anything at all about that
- jcampbell1 14y agoAirBnB can reasonably generate profits of $4/night with their current model. A $2B valuation makes sense if they do 30M nights in a year. They did 8M in Jun 11-Jun 12, with 5M of that in the last 4.5 months. My guess is their current run rate is in the neighborhood of 18M nights/year. The valuation is high, but it isn't unreasonable. Also I view AirBnB as having a low risk of falling out of fashion, unlike Zynga or Facebook.
- vikramhaer 14y agoCan I ask what the $4 in profit and 30M nights/ year to justify $2B valuation are based on? Just wondering if maybe my math/ view on it is wrong... Looks like they charge a 3% fee meaning a night @ $100 would bring in $3 of revenue (not profit). At 30M nights that's $90M in revenue, putting the $2B valuation at 22.2x revenue... seems slightly unreasonable (at least not a valuation that public markets are likely to put on it). Thoughts?
- rdl 14y ago20 p/e is awesome for a business which is growing "e" very fast, and in what appears to be a sustainable way. Look at AMZN's p/e...
- vikramhaer 14y agobut it's not really earnings is it? that's 20x revenue, so even with really good margins that would be at least double. You're right that amazon's P/E is insanely high, but on a revenue basis they trade at 1.5-2.0x. I guess with the kind of growth AirBnB has there's nothing really comparable... just trying to understand how they're justifying that valuation
- mrgordon 14y agoFrom the article: "The company takes an average of 10% on every transaction, according to sources familiar with the business" Your numbers start to look a lot better at a 10% fee instead of a 3% fee.
- rdl 14y agoStarwood doesn't own most of their hotels, nor do most of the staff, revenues, etc flow through Starwood. It is just a franchise/branding company with a property management and reservation system. Their direct employees are in line with airbnb.