Airbnb Enters the Land of Profitability

https://www.bloomberg.com/news/articles/2017-01-26/airbnb-enters-the-land-of-profitability

by taylorbuley • 9 years ago

80 26 9 years ago

shaqbert• 9 years ago

Anyone surprised that they'd eventually be profitable? Being the largest hospitality company in the world without holding any assets ... how could anybody ever have been doubting in the first place.

The real question is rather if they are leaving growth opportunities behind if they are profitable too early. Still a lot of lobbying to be done.

nnd• 9 years ago

Most of the largest brands in hospitality don't own their assets either, and operate a franchise instead.

edblarney2• 9 years ago

Even the one's that don't operate as franchises still don't own the properties.

Most of Four Seasons, Fairmont etc. - the actual properties are owned by sovereign wealth funds etc. - think Saudis who need to park huge reams of cash somewhere and sit on it.

nikanj• 9 years ago

I have noticed their new profit-oriented approach on two different trips. In the past, host cancelling on you last-minute meant a nice hotel comped by airbnb. Now it means you get to pay the premium for last-minute hotel booking, and airbnb /might/ throw $50 towards your next reservation.

On our Midamericon trip, we booked airbnb about 4 months early, when the total cost about $100 less than a hotel. The host cancelled the week we were flying in, meanwhile the hotel prices had shot from $85/night to $225/night as the law of supply and demand worked it's magic on the convention town.

rorykoehler2• 9 years ago

That's why I look at booking.com first now. On Booking.com the apartments are run by professionals who don't flake out on you at the last moment. Airbnb has also brought competition to market driving down prices and often, in places like Amsterdam, much better value can be found on Booking.com these days.

philfrasty• 9 years ago

I have made roughly 100 bookings through AirBnB with ZERO cancellations from the host. Funny enough my best friend booked a hotel on the Galapagos islands through booking.com and got a cancellation email while on the boat to get there....talk about other options in that situation...

baby• 9 years ago

I have used Airbnb a huge amount of time, and got my first (and only so far) last minute cancellation last year in January. When I say last minute cancellation, I'm kind of lying, it was actually an on-time cancellation. They cancelled right when I was supposed to check-in. (They sent me a message telling me they lost the keys, yeah sure.)

Airbnb only wanted to refund me at first, after a few back and forth and throwing the word "nightmare experience" in their face (I had just flew from France, was completely jetlagged) they finally ended up reimbursing me my hotel stay (it was a 2 or 3 nights stay IIRC).

yardie2• 9 years ago

2 times we were cancelled on and in neither cases did Airbnb help us find accommodations. These were last minute cancellations where rebooking on airbnb was impossible.

I liked the idea of the individual sticking it to the man but experience has shown me that people are flakey as hell. A computerized hotel booking will rarely leave you stranded in a sidewalk cafe with your young son.

jzwinck• 9 years ago

My experience has been rather the contrary. A couple times when bicycle touring I got to some town only to discover it was "X Festival Week" and the town tourist office could not find a single place to sleep. AirBnB still had places.

My family has had the experience of showing up at a hotel with an advance booking and being turned away because they were full (oops!).

yardie2• 9 years ago

With computerized booking in not sure if that happens a lot. Unless the agent didn't know what they were doing and entered the booking incorrectly a cancelled advanced booking should never happen.

I've also found the larger hotels will keep a few rooms in reserve, just in case there are problems i.e. leaks.

Gustomaximus• 9 years ago

+1. Had a couple bad experiences. What bothered me more was the complete lack of response by Airbnb on both. Have decided it not worth occasional hassle for what these days doesn't seem to be a big saving unless traveling in a group.

uladzislau• 9 years ago

I actually spent a night on the streets in Europe due to AirBnB cancellation - their was no way to get anyone on the phone and they didn't respond to my email.

padobson• 9 years ago

Revenue at Airbnb increased more than 80 percent during 2016, said one of the people close to the company, even as cities like San Francisco and New York passed laws that would enforce limits on the number of nights hosts can list their properties.

I suspect this has as much to do with mass adoption as anything else. My wife runs four Airbnb units in Warren, Ohio and 2016 was a record year. We've been on Airbnb since 2013, but we really started seeing a change in the type and frequency of booking requests last year.

In the beginning, it was all 20-somethings traveling from big cities and staying a night or two. Last year, it was a much more diverse, more price-insensitive group.

giarc• 9 years ago

I think "Airbnb" is entering our lexicon as a verb, the audience will widen. I hear the phrase "just airbnb your place" more than "just rent out your place". When people talk about travelling, they say "we'll just find an airbnb". "Airbnb" replacing hotel/rental/motel/bed and breakfast.

Likely lots of bias here as I'm a 30 something techie person, surrounded by like minded people.

chx• 9 years ago

I am 42 and what I find great with Airbnbs is the place selection. There are so many of them even at places where hotels are rare, nonexistent or exorbitantly priced. Bellevue, WA and Florence, Italy are two places where I appear at least yearly and always Airbnb.

sveme• 9 years ago

Plenty of cities are starting to introcude regulatory measures against airbnb which will make it much harder to stay profitable and grow. Munich, Berlin and Barcelona are all concerned that flats are often used only for airbnb nowadays, thereby removing them from the market, and have started measures to penalize flats used for airbnb (penalties up to 500 000 Euros). It's become a side business for a lot of rich people who buy flats explicitly for renting out via airbnb, not just temporarily renting out an unused room in your flat. I expect the backlash to become much stronger in the years to come.

simula67• 9 years ago

it will maintain profitability in 2017 before interest, taxes and amortization

Because those aren't real expenses ?

jasode• 9 years ago

[B]efore [I]nterest, [T]axes and [A]mortization is a substring of EBITA: https://en.wikipedia.org/wiki/Earnings_before_interest,_taxe...

It's an accounting phrase describing one measure of operating cashflow. Since the Bloomberg story is intended for non-accountants, they decided to spell out each word instead of using the acronym.

ry4n4132• 9 years ago

Are they public yet? (spoiler alert: I know they aren't and this is a typical marketing scheme for private companies pre-ipo. Now, long-term say 10 years will the company be able to quint-tuple in size? I don't dunno. I'm sure all the companies issuing research as part of the IPO process will say so.)

edblarney2• 9 years ago

It's fair to be cynical in the Valley, but crossing the threshold into profitability is definitely an objectively important watershed that I don't think is hype or propaganda.

Surely it's all part of their 'IPO campaign' but that doesn't make it invalid or irrelevant information.

If they can fill their PR campaign with decent, factual 'un-hypey' information, well, then that's really good for them.

ry4n4132• 9 years ago

"If they can fill their PR campaign with decent, factual 'un-hypey' information, well, then that's really good for them."

Totally agree.

Airbnb Enters the Land of Profitability

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