ABNB - AirBnB

[BG2008]

So I think AirBnB self dis-intermediates itself over time. This is how I use AirBnb...

 

Step 1) Log into platform, search for home, look at ratings (extract trust)

Step 2) Lookup who the property manager is within the ad

Step 3) Google the property manger or contact directly

 

Boom - 15% fees saved and usually the property manager is happier to deal with customer directly and manage the relationship rather than have airbnb do it ($$ savings and future marketing lists)

 

I think this catches on over time, especially as Airbnb price gouges renters and owners and plays games with page rank etc.

 

Best case - limits pricing power

worst case - disintermediation similar to OTAs

 

We found who the 2 star guest is

[rb]

I’ve never even thought of doing something like this with Airbnb and I’m fairly cheap. I mainly use it for international travel and I’m pretty picky about where I stay (I stay in nice places). I’ve also had hosts cancel on me last minute, try to switch the unit, etc. I use Airbnb for its reputation I don’t want the thrill of being homeless in a place where I don’t speak the language.

 

If your host cancels las minute or is a no show you walk into a howl off the street you’re gonna be fleeced. You may end up staying in a dump and pay more money than your nice Airbnb jast because u wanna save a little bit of their fee. It’s just not worth it.

 

Not too mention that some hosts have different policies or behave differently off Airbnb. For example one that I stayed at For example charged extra for toilet paper off Airbnb.

 

I’m gonna say that I’m not part of that “everything that comes from Silicon Valley is brilliant” group. But Airbnb’s service is one I really like. 

[BG2008]

One drawback of Airbnb for travel is that most places do not have elevators.  You get really nice places in Milan and Rome.  When you're traveling with children and carry large luggages, it's a pain to carry your kids and heavy luggages up stairs rather than via a bell boy or an elevator. 

[jschembs]

Any idea what the "other" category is comprised of within accrued expenses and other current liabilities? Bulk of their cash flow comes from collecting sales and other business taxes long before they need to be remitted, a wonderful float.

[Seth Lowry]

Very few people do this, Marriott, etc have been trying to get their customers to do this for decades...yet Priceline is still worth, check notes, more than MAR.. ....

 

So I think AirBnB self dis-intermediates itself over time. This is how I use AirBnb...

 

Step 1) Log into platform, search for home, look at ratings (extract trust)

Step 2) Lookup who the property manager is within the ad

Step 3) Google the property manger or contact directly

 

Boom - 15% fees saved and usually the property manager is happier to deal with customer directly and manage the relationship rather than have airbnb do it ($$ savings and future marketing lists)

 

I think this catches on over time, especially as Airbnb price gouges renters and owners and plays games with page rank etc.

 

Best case - limits pricing power

worst case - disintermediation similar to OTAs

 

But there is no meaningful price incentive for the mariott customer to book direct so its not the same comparison. By booking direct the airbnb renter saves ~15% or whatever.

 

[Seth Lowry]

So I think AirBnB self dis-intermediates itself over time. This is how I use AirBnb...

 

Step 1) Log into platform, search for home, look at ratings (extract trust)

Step 2) Lookup who the property manager is within the ad

Step 3) Google the property manger or contact directly

 

Boom - 15% fees saved and usually the property manager is happier to deal with customer directly and manage the relationship rather than have airbnb do it ($$ savings and future marketing lists)

 

I think this catches on over time, especially as Airbnb price gouges renters and owners and plays games with page rank etc.

 

Best case - limits pricing power

worst case - disintermediation similar to OTAs

 

I've learned to ignore people who do this.  One airbnb offers protections for hosts with insurance policies and dispute resolution.  And two I've found the people who do this to be annoying and want much steeper discounts than what I save.  Not worth the trouble.  And at the end I don't get an airbnb review to help my business.  I've actually raised my prices by more than $100/night this year from what I was charging in 2019 and found that I still get just as many booking and the people treat the house better and are easier to deal with.

 

Should have clarified that this trick only really works for homes with 3rd party property managers, not as applicable to self hosted although I'm sure it still happens. Don't remember how many homes are self hosted versus property mngrs, but I believe majority are managed

[LC]

Oh yea, there is definitely some truth to the above. People that are incredibly cheap are also typically very demanding and just a hassle to deal with. A friend of mine worked as a stockbroker right out of college for awhile, and told me one of the first things they are taught is that if a potential customer asks more questions about cost/commission/fees than the actual product, just tell him to go to Scwhab and move on. Not worth the headache. Much like the people who ask their waiter a million questions, end up ordering minimally, and then tip 15% on the pre tax amount, while asking for a to-go box for the leftovers...

 

We had a saying: the people in line at the bank with the least amount of money have the most amount of problems.

[Seth Lowry]

So I think AirBnB self dis-intermediates itself over time. This is how I use AirBnb...

 

Step 1) Log into platform, search for home, look at ratings (extract trust)

Step 2) Lookup who the property manager is within the ad

Step 3) Google the property manger or contact directly

 

Boom - 15% fees saved and usually the property manager is happier to deal with customer directly and manage the relationship rather than have airbnb do it ($$ savings and future marketing lists)

 

I think this catches on over time, especially as Airbnb price gouges renters and owners and plays games with page rank etc.

 

Best case - limits pricing power

worst case - disintermediation similar to OTAs

 

We found who the 2 star guest is

Lol

[Pelagic]

Found this article linked in a different discussion about AirBnB's S1. Thought the conversation between VCs 11+ years ago about the business was prescient, capital efficiency forecast notwithstanding.

 

http://www.paulgraham.com/airbnb.html

 

from: Fred Wilson

to: Paul Graham

date: Tue, Feb 17, 2009 at 2:05 PM

subject: Re: airbnb

 

They did but I am not sure I buy that

 

ABNB reminds me of Etsy in that it facilitates real commerce in a

marketplace model directly between two people

 

So I think it can scale all the way to the bed and breakfast market

 

But I am not sure they can take on the hotel market

 

I could be wrong

 

But even so, if you include short term room rental, second home

rental, bed and breakfast, and other similar classes of accommodations,

you get to a pretty big opportunity

 

fred

 

 

 

from: Paul Graham

to: Fred Wilson

date: Wed, Feb 18, 2009 at 12:21 AM

subject: Re: airbnb

 

So invest in them!  They're very capital efficient.  They would

make an investor's money go a long way.

 

It's also counter-cyclical.  They just arrived back from NYC, and

when I asked them what was the most significant thing they'd observed,

it was how many of their users actually needed to do these rentals

to pay their rents.

 

--pg

[Jurgis]

So I think AirBnB self dis-intermediates itself over time. This is how I use AirBnb...

 

Step 1) Log into platform, search for home, look at ratings (extract trust)

Step 2) Lookup who the property manager is within the ad

Step 3) Google the property manger or contact directly

 

Boom - 15% fees saved and usually the property manager is happier to deal with customer directly and manage the relationship rather than have airbnb do it ($$ savings and future marketing lists)

 

I think this catches on over time, especially as Airbnb price gouges renters and owners and plays games with page rank etc.

 

Best case - limits pricing power

worst case - disintermediation similar to OTAs

 

We found who the 2 star guest is

Lol

 

Value investors don't like value investors to be their customers.

[rkbabang]

So I think AirBnB self dis-intermediates itself over time. This is how I use AirBnb...

 

Step 1) Log into platform, search for home, look at ratings (extract trust)

Step 2) Lookup who the property manager is within the ad

Step 3) Google the property manger or contact directly

 

Boom - 15% fees saved and usually the property manager is happier to deal with customer directly and manage the relationship rather than have airbnb do it ($$ savings and future marketing lists)

 

I think this catches on over time, especially as Airbnb price gouges renters and owners and plays games with page rank etc.

 

Best case - limits pricing power

worst case - disintermediation similar to OTAs

 

I've learned to ignore people who do this.  One airbnb offers protections for hosts with insurance policies and dispute resolution.  And two I've found the people who do this to be annoying and want much steeper discounts than what I save.  Not worth the trouble.  And at the end I don't get an airbnb review to help my business.  I've actually raised my prices by more than $100/night this year from what I was charging in 2019 and found that I still get just as many booking and the people treat the house better and are easier to deal with.

 

Should have clarified that this trick only really works for homes with 3rd party property managers, not as applicable to self hosted although I'm sure it still happens. Don't remember how many homes are self hosted versus property mngrs, but I believe majority are managed

 

 

Ah, that makes sense. I was wondering how you found people with google. The way it happens to me is I get a message saying something like "I'd like to speak to you could I please have your number"  airbnb tries to stop you from giving out your number but you can give out one digit per message.  I only gave out my number once and didn't end up renting to the guy.  I've had others book then try to ask me if we could cancel the booking and deal outside airbnb.  When I say no, they cancel the booking.

[manuelbean]

Any idea what the "other" category is comprised of within accrued expenses and other current liabilities? Bulk of their cash flow comes from collecting sales and other business taxes long before they need to be remitted, a wonderful float.

 

Have you found the answer to this one? Not only that, but they also get float from "change in funds payable and amounts payable to customers" under the Cash Flow from Financing Activities. What would be the difference between the two lines?

[bizaro86]

Any idea what the "other" category is comprised of within accrued expenses and other current liabilities? Bulk of their cash flow comes from collecting sales and other business taxes long before they need to be remitted, a wonderful float.

 

Have you found the answer to this one? Not only that, but they also get float from "change in funds payable and amounts payable to customers" under the Cash Flow from Financing Activities. What would be the difference between the two lines?

 

They also get float because customers pay them at time of booking but they don't pay hosts until 1 day after check in.

[rkbabang]

Any idea what the "other" category is comprised of within accrued expenses and other current liabilities? Bulk of their cash flow comes from collecting sales and other business taxes long before they need to be remitted, a wonderful float.

 

Have you found the answer to this one? Not only that, but they also get float from "change in funds payable and amounts payable to customers" under the Cash Flow from Financing Activities. What would be the difference between the two lines?

 

They also get float because customers pay them at time of booking but they don't pay hosts until 1 day after check in.

 

Yes, and sometimes that is a significant amount of time in between.  I've had people book in the summer almost a year in advance.

[bizaro86]

Any idea what the "other" category is comprised of within accrued expenses and other current liabilities? Bulk of their cash flow comes from collecting sales and other business taxes long before they need to be remitted, a wonderful float.

 

Have you found the answer to this one? Not only that, but they also get float from "change in funds payable and amounts payable to customers" under the Cash Flow from Financing Activities. What would be the difference between the two lines?

 

They also get float because customers pay them at time of booking but they don't pay hosts until 1 day after check in.

 

Yes, and sometimes that is a significant amount of time in between.  I've had people book in the summer almost a year in advance.

 

One thing they did with the float:

 

https://www.google.com/amp/s/venturebeat.com/2018/02/07/airbnb-reportedly-built-an-internal-hedge-fund-that-makes-5-million-per-month/amp/

 

 

[manuelbean]

Any idea what the "other" category is comprised of within accrued expenses and other current liabilities? Bulk of their cash flow comes from collecting sales and other business taxes long before they need to be remitted, a wonderful float.

 

Have you found the answer to this one? Not only that, but they also get float from "change in funds payable and amounts payable to customers" under the Cash Flow from Financing Activities. What would be the difference between the two lines?

 

 

They also get float because customers pay them at time of booking but they don't pay hosts until 1 day after check in.

 

Yes, that's what I meant. It comes from the "change in funds payable and amounts payable to customers" which, interestingly enough, isn't stated on the Cash from Operating Activities, but on the Cash from Financing Activities. I wonder if we should adjust the FCF figure for this amount?

 

[Edward]

I am surprised this doesn’t print money - where does all this expense go? It isn’t even stock based compensation (~$100M in 2019). $1B in R&D in 2019....

The reason is that they invest too much resources into dealing with costumers and the hosts.

 

I run an Airbnb and in my experience, Nooking.com are assholes but they nailed the formula - take minimum responsibility, don't spend too much time on the user experience, just keep churning them deals.

 

In contrast, Airbnb are very friendly, try to solve a lot of problems and even compensate guests if they are not happy.

 

I am no longer dealing with Booking.com buy I can appreciate their focus on actually making some money.

[clutch]

I am surprised this doesn’t print money - where does all this expense go? It isn’t even stock based compensation (~$100M in 2019). $1B in R&D in 2019....

The reason is that they invest too much resources into dealing with costumers and the hosts.

 

I run an Airbnb and in my experience, Nooking.com are assholes but they nailed the formula - take minimum responsibility, don't spend too much time on the user experience, just keep churning them deals.

 

In contrast, Airbnb are very friendly, try to solve a lot of problems and even compensate guests if they are not happy.

 

I am no longer dealing with Booking.com buy I can appreciate their focus on actually making some money.

 

Sounds like Walmart vs Amazon. Look how that turned out.

[fareastwarriors]

 

 

The San Francisco-based company now plans to offer its shares for $56 to $60 apiece, up from a previous price range of $44 to $50 each, said the people, who asked not to be identified as the details aren’t public. That would boost Airbnb’s fully diluted valuation from $35 billion at the top of the earlier range to $42 billion.

 

https://www.bloomberg.com/news/articles/2020-12-07/airbnb-said-to-boost-ipo-price-range-aims-for-42-billion-value?srnd=premium

[Gregmal]

Yupp... $30B turns to $35B which gets upsized to $40, maybe even eventually $45B and then shares open ~$60B, maybe higher.

 

Still kicking myself for not getting this at ~25B. Cant win em all I guess.

 

 

[CorpRaider]

I am surprised this doesn’t print money - where does all this expense go? It isn’t even stock based compensation (~$100M in 2019). $1B in R&D in 2019....

The reason is that they invest too much resources into dealing with costumers and the hosts.

 

I run an Airbnb and in my experience, Nooking.com are assholes but they nailed the formula - take minimum responsibility, don't spend too much time on the user experience, just keep churning them deals.

 

In contrast, Airbnb are very friendly, try to solve a lot of problems and even compensate guests if they are not happy.

 

I am no longer dealing with Booking.com buy I can appreciate their focus on actually making some money.

 

Use VRBO/homeaway?

[rkbabang]

I am surprised this doesn’t print money - where does all this expense go? It isn’t even stock based compensation (~$100M in 2019). $1B in R&D in 2019....

The reason is that they invest too much resources into dealing with costumers and the hosts.

 

I run an Airbnb and in my experience, Nooking.com are assholes but they nailed the formula - take minimum responsibility, don't spend too much time on the user experience, just keep churning them deals.

 

In contrast, Airbnb are very friendly, try to solve a lot of problems and even compensate guests if they are not happy.

 

I am no longer dealing with Booking.com buy I can appreciate their focus on actually making some money.

 

Use VRBO/homeaway?

 

Does anyone here use VRBO or homeaway?  I was going to start using VRBO, but I keep talking to people who used to use both and now only use airbnb, and I've been doing well on airbnb so I haven't bothered trying it yet.  Some I've talked to have said that the VRBO guests are more needy, have more complaints, and are just generally harder to deal with on average.

 

 

[Gregmal]

Prices at $47B, opens $60B+ tomorrow

 

 

Sincerely,

Nostradamus

[no_free_lunch]

I am surprised this doesn’t print money - where does all this expense go? It isn’t even stock based compensation (~$100M in 2019). $1B in R&D in 2019....

The reason is that they invest too much resources into dealing with costumers and the hosts.

 

I run an Airbnb and in my experience, Nooking.com are assholes but they nailed the formula - take minimum responsibility, don't spend too much time on the user experience, just keep churning them deals.

 

In contrast, Airbnb are very friendly, try to solve a lot of problems and even compensate guests if they are not happy.

 

I am no longer dealing with Booking.com buy I can appreciate their focus on actually making some money.

 

I wonder if there is a choice. I mean they are intermediary between two random parties.  They do need to provide some mediation for it to work. Its all about trust right?  I personally have had things go south so I don't view issues as an outlier. It happens.  You are kind of hoping that if something goes wrong abnb will try to make it right.  If they start getting too many bad reviews it can wreck their business.

[cwericb]

I am surprised this doesn’t print money - where does all this expense go? It isn’t even stock based compensation (~$100M in 2019). $1B in R&D in 2019....

The reason is that they invest too much resources into dealing with costumers and the hosts.

 

I run an Airbnb and in my experience, Nooking.com are assholes but they nailed the formula - take minimum responsibility, don't spend too much time on the user experience, just keep churning them deals.

 

In contrast, Airbnb are very friendly, try to solve a lot of problems and even compensate guests if they are not happy.

 

I am no longer dealing with Booking.com buy I can appreciate their focus on actually making some money.

 

Use VRBO/homeaway?

 

Does anyone here use VRBO or homeaway?  I was going to start using VRBO, but I keep talking to people who used to use both and now only use airbnb, and I've been doing well on airbnb so I haven't bothered trying it yet.  Some I've talked to have said that the VRBO guests are more needy, have more complaints, and are just generally harder to deal with on average.

 

I have used VRBO for years off and on, Hawaii, Portugal, etc. Never had a problem but I do my own homework. I look at the location on Google Earth and check out the neighbourhood and if I know anyone in the area I will ask them to check the location out.