5 ms·

For comparison: Marriott International is valued at $22B. In 2013, Marriott employed 199,929 workers and made $626M profits off of $12.78B revenues.

by jmduke 12y ago

johnrob 12y ago
With hosts in 34k cities (from article), airbnb probably has more employees if we classified hosts as such. Also, many hosts hire of cleaners. It's quite possible that ~500k people are earning income (directly or indirectly) related to airbnb bookings.
- ulfw 12y ago
  And how can you classify someone (who works 40hrs in a real job) who rents out their backroom on a weekend as "an employee" comparable to the likes of Mariott et al?
  - KaoruAoiShiho 12y ago
    I'd say they're far better off than employees.
    - ulfw 12y ago
      Says no one who ever needed a job to pay their bills.
skuhn 12y ago
Airbnb's valuation seems totally irrational to me, given the nature of their business. Still, I would think any business would like to double their valuation in a year. Mariott should convert all of their hotels into apartments, fire all of their staff, rent the apartments, and then have those people rent the apartments to other people via mAIRiottBNB.com. Boom, instant market cap doubling.
- jsprogrammer 12y ago
  Is market cap really the only objective?
  - skuhn 12y ago
    No, and doing that would ultimately destroy Marriott's business. I think Airbnb's investors would be wise to think about that.
badusername 12y ago
What does Airbnb's revenues look like?
zzleeper 12y ago
That's a bad comparison. Marriot is hugely leveraged [1] on purpose (tax shield reasons, etc. etc.), while Airbnb isn't. It would be better to compare the firm values instead of equity values (which you can change in one day just by issuing debt and using the proceeds in a share repurchase) [1] http://marketrealist.com/2014/10/why-ev-ebitdar-multiple-best-valuing-hotel-companies/ http://marketrealist.com/2014/10/why-ev-ebitdar-multiple-bes... Apparently they do a trick to put most of their debt off the balance sheet, through lease obligations. Thus, if you just do a quick glance at their numbers, they appear to have a low leverage.
- Chronic31 12y ago
  Go back to business school my friend. Hacker news is no place for your kind
  - dang 12y ago
    Hacker News is a fine place for anyone who posts substantive comments, like zzleeper. What it has no place for are personal attacks. Since this account has done so more than once, we've banned it. Anybody with a banned account who would like it to be unbanned is welcome to email us at hn@ycombinator.com. We're happy to unban users who give us reason to believe that they will follow the HN guidelines from now on.
deleted 12y ago
[deleted]
lazaroclapp 12y ago
Here is the thing, in the 90's people would look at Amazon.com and be amused, mystified and scandalized by what the company was valued at, when compared to giants like Borders or Radio Shack, with so many more employees/stores/etc. Turned out that intuition was wrong, and Amazon's way of doing things completely overtook the brick and mortar way not only in books and electronics, but for pretty much every product category. Then again, people probably thought the same way about Webvan vs say Safeway, and they were absolutely right in that case. So, here is the question, is AirBnB an Amazon or a Webvan? Is Marriott a Borders or a Safeway?
- atmosx 12y ago
  The valuation thing is silly, but there are many silly things around, so why just bother with that and not something else? But the fact that a company with ~ 50 employees (not talking about AirBNB but generally about the IT sector) generates a revenue comparable to a company (in the 90s or 80s or 60s) with 500.000 employees is a very real problem. If the modern society doesn't make to overcome this somehow, I see dark times ahead.
  - cma 12y ago
    Airbnb does have hundreds of thousands of hosts that are getting some of the revenue too. Looking at gross receipts double counts and doesn't make too much sense in sounding the alarmism.
    - atmosx 12y ago
      > Airbnb does have hundreds of thousands of hosts [...] Not sure if we're in the same page here: An "AirBNB host" and an "employee" are not the same thing. If you think that they are, then the problem I was trying to describe is deeper than I thought.
      - cma 12y ago
        My point was you are looking at gross revenue, when they are really a booking agent, so they only get about 3% of that revenue after reimbursing hosts. Hosts do the cleaning, service, etc. that makes up the bulk of the 200,000 employee number for Marriott. If you want to compare net profit instead of gross revenue and say it is sick, I don't think the 200,000 employees would care, since their pay subtracts from Marriott's profit.
patmcguire 12y ago
Article says they're raising a billion dollars. The question isn't whether $1 billion is a good price for 5% of the company, it's whether $1 billion is a good price for 5% of the company, liquidation preferences, and any other special rights.
pbreit 12y ago
I think I'd take the $300m in profits on $600m (both wild guesses) in revenues and growing very rapidly with only a few thousand employees.
bane 12y ago
That's not fair at all, AirBnB has that giant real estate portfolio it owns that it could sell off if needed. That's real value there.

For comparison: Marriott International is valued at $22B. In 2013, Marriott employed 199,929 workers and made $626M profits off of $12.78B revenues.

by jmduke 12y ago

For comparison: Marriott International is valued at $22B. In 2013, Marriott employed 199,929 workers and made $626M profits off of $12.78B revenues.

johnrob 12y ago

With hosts in 34k cities (from article), airbnb probably has more employees if we classified hosts as such. Also, many hosts hire of cleaners. It's quite possible that ~500k people are earning income (directly or indirectly) related to airbnb bookings.

ulfw 12y ago
And how can you classify someone (who works 40hrs in a real job) who rents out their backroom on a weekend as "an employee" comparable to the likes of Mariott et al?
- KaoruAoiShiho 12y ago
  I'd say they're far better off than employees.
  - ulfw 12y ago
    Says no one who ever needed a job to pay their bills.

skuhn 12y ago

Airbnb's valuation seems totally irrational to me, given the nature of their business. Still, I would think any business would like to double their valuation in a year. Mariott should convert all of their hotels into apartments, fire all of their staff, rent the apartments, and then have those people rent the apartments to other people via mAIRiottBNB.com. Boom, instant market cap doubling.

jsprogrammer 12y ago
Is market cap really the only objective?
- skuhn 12y ago
  No, and doing that would ultimately destroy Marriott's business. I think Airbnb's investors would be wise to think about that.

badusername 12y ago

What does Airbnb's revenues look like?

zzleeper 12y ago

That's a bad comparison. Marriot is hugely leveraged [1] on purpose (tax shield reasons, etc. etc.), while Airbnb isn't. It would be better to compare the firm values instead of equity values (which you can change in one day just by issuing debt and using the proceeds in a share repurchase) [1] http://marketrealist.com/2014/10/why-ev-ebitdar-multiple-best-valuing-hotel-companies/ http://marketrealist.com/2014/10/why-ev-ebitdar-multiple-bes... Apparently they do a trick to put most of their debt off the balance sheet, through lease obligations. Thus, if you just do a quick glance at their numbers, they appear to have a low leverage.

Chronic31 12y ago
Go back to business school my friend. Hacker news is no place for your kind
- dang 12y ago
  Hacker News is a fine place for anyone who posts substantive comments, like zzleeper. What it has no place for are personal attacks. Since this account has done so more than once, we've banned it. Anybody with a banned account who would like it to be unbanned is welcome to email us at hn@ycombinator.com. We're happy to unban users who give us reason to believe that they will follow the HN guidelines from now on.

deleted 12y ago

[deleted]

lazaroclapp 12y ago

Here is the thing, in the 90's people would look at Amazon.com and be amused, mystified and scandalized by what the company was valued at, when compared to giants like Borders or Radio Shack, with so many more employees/stores/etc. Turned out that intuition was wrong, and Amazon's way of doing things completely overtook the brick and mortar way not only in books and electronics, but for pretty much every product category. Then again, people probably thought the same way about Webvan vs say Safeway, and they were absolutely right in that case. So, here is the question, is AirBnB an Amazon or a Webvan? Is Marriott a Borders or a Safeway?

atmosx 12y ago
The valuation thing is silly, but there are many silly things around, so why just bother with that and not something else? But the fact that a company with ~ 50 employees (not talking about AirBNB but generally about the IT sector) generates a revenue comparable to a company (in the 90s or 80s or 60s) with 500.000 employees is a very real problem. If the modern society doesn't make to overcome this somehow, I see dark times ahead.
- cma 12y ago
  Airbnb does have hundreds of thousands of hosts that are getting some of the revenue too. Looking at gross receipts double counts and doesn't make too much sense in sounding the alarmism.
  - atmosx 12y ago
    > Airbnb does have hundreds of thousands of hosts [...] Not sure if we're in the same page here: An "AirBNB host" and an "employee" are not the same thing. If you think that they are, then the problem I was trying to describe is deeper than I thought.
    - cma 12y ago
      My point was you are looking at gross revenue, when they are really a booking agent, so they only get about 3% of that revenue after reimbursing hosts. Hosts do the cleaning, service, etc. that makes up the bulk of the 200,000 employee number for Marriott. If you want to compare net profit instead of gross revenue and say it is sick, I don't think the 200,000 employees would care, since their pay subtracts from Marriott's profit.

patmcguire 12y ago

Article says they're raising a billion dollars. The question isn't whether $1 billion is a good price for 5% of the company, it's whether $1 billion is a good price for 5% of the company, liquidation preferences, and any other special rights.

pbreit 12y ago

I think I'd take the $300m in profits on $600m (both wild guesses) in revenues and growing very rapidly with only a few thousand employees.

bane 12y ago

That's not fair at all, AirBnB has that giant real estate portfolio it owns that it could sell off if needed. That's real value there.