The end of Airbnb as we know it?

[Kath9]

Here's an interesting article i just came across: https://www.wired.co.uk/article/airbnb-coronavirus-losses

It states that 60% (!!!) of Airbnb hosts have MORE than TWO OTHER listings and argues that Airbnb has become nothing more than a hotel chain. Sadly, I have to agree. As many hosts in this forum know, I have long lamented the transition from the original spirit of Airbnb (staying with locals in their homes) to the rise of the professional host with multiple listings. I take issue with many aspects of this, primarily the housing shortage it has created worldwide, and have long been dismayed at Airbnb's unwillingness to regulate this. The hosts who are now in deep trouble and calling for legal action are mainly those who have multiple listings and have made Airbnb their primary source of income.

If Airbnb manages to survive this crisis, it is my sincere hope that it goes back to its core values and becomes a true home-sharing platform once again. 

[Wende2]

@Robin4   Hi....yes, I thought why is the number 3000, wouldn't it be more effective at 1000, still seems like a number that would show up on a test.  We had plenty of warning here, 70 days before the first case, the same day as South Korea, but this moron here chose to call it a hoax, said it would disappear like a miracle one day, even ignored the warnings from our own intelligence people in China.  Had the audacity to say...who knew back in Jan, well I did.  Our election in Nov can't come soon enough, this is the first yr ever in 61 yrs I've wished my summer to fly by, well even faster then usual at this age.  So glad you're able to get back to normal, did you have an early shut down, we aren't even being testing.  I can say my Governor is doing a good job for my state, considering our states are all on their own, even competing against each other for everything, trump is worthless.

[Sarah977]

@Wende2  We are lucky to live in the age of the Worldwide Web. You can research anything you want online. There's no need to be limited to what you hear on US TV or read in US newspapers.

[Wende2]

Hi@Sarah977  I don't depend on the news here.  I mostly watch YouTube, a lot of good info there, Dr.'s around the world being interviewed, another at home in the UK giving updates from around the world.  One I like here tells you about the science of the virus, another everything in between.

[Melodie-And-John0]

@Kath9 , Thanks for sharing that data, its worthy of noting the shift to self employed models means we probably rise and fall alone as well, its lonely at the top and pretty congested down below where most of us live.  The growth of home-sharing into full fledged careers is extremely risky business for those that don't protect themselves and the assets that they are plying their trade with.  Its kinda like the gamble ski resorts take every year wondering if they will get enough snow to keep the lifts full.  Unfortunately lots of people overextended themselves way past the concept of sharing a place that they chose because they like or love it and can afford to live.    I doubt Airbnb nor our Governments will save the ones that haven't prepared for this somehow with alternative incomes and such.  Airbnb will however have a renerwed interest in whoever is left, I think they are showing more now, hopefully that trend will continue cause I really do like the Platform.

The Airbnb platform, guests and hosts will certainly be forever changed by the virus (if they actually  survive it), I don't know if it will be as lucrative or trusted as it was again anytime soon for folks that are invested in places they don't actually call home.  Brian Chesky and the company he formed were no more or less prepared for this than most of us, our governments or institutions that we thought were rock solid, a certain amount of undeserved patience will be necessary for all of us when it comes to reacting to others reactions, that's a great way to start a chain reaction and for the most part we dont need those at this moment.  Making great changes in things that don't make us healthier physically at this moment probably won't be necessary if our business plan and resources were solid before, this too will pass.  Stay well, JR

[Elad27]

You are totally right, I manage my self 52 listenings, make Airbnb around $50000 yearly and they refuse to pay all bookings of Pay Less upfront!

This is unacceptable! 

[Susan17]

I hate to burst all your bubbles, but it's a total - albeit well-crafted - myth that Airbnb was ever a "true home-sharing platform"  That was just the cosy little image they created, and yarn they spun, as a foot-in-the-door means of bypassing local housing and occupancy laws, in the same way they've used their  "all about the little guy, using his Airbnb hosting income to feed his family and keep the roof over their heads" line all these years to try and hoodwink regional governments and municipal authorities into passing lenient regulations, while simultaneously aggressively recruiting hordes of commercial operators with vast inventories to the platform.

How does anyone think all these "professional" and commercial operators, with up to 10000 listings apiece, got on the platform in the first place - they all just slipped in under the radar when Airbnb was distracted and looking the other way, or something?? The reality is, Airbnb has been reeling in, protecting, promoting and supporting these "hosts" from the early days, with a dedicated outreach department tasked with luring and schmoozing them, since at least 2014. The fact that huge numbers of these players are unvetted rogue operators, plundering vast swathes of local housing stock to punt out on the platform - very often illegal listings - has never given the company a moment's pause. On the contrary, actually - they've gone to extreme lengths, and spent hundreds of millions on court battles, to win the right not to have to out the rogues and scammers from the site. 

Just goes to show what an excellent job The Firm has done of pulling the wool over everyone's eyes though, when even some long-term hosts are still swallowing the "live like a local" fairytale. 

From the day the company was birthed as Airbnb from Paul Graham's Y-Generator's winter 2008 start-up incubator programme, the site has catered for entire home hosts, and the more the merrier. And the reason for that is because nobody would give them funding for their original airbed-and-poptarts-brekkie "home-sharing" plan - it simply wasn't seen by investors as a viable or feasible business model, even on a miniscule scale.

Fast-forward to 2020 - twelve years later - and the company is now on the hook for servicing $6.4 billion in "investor funding", the most recent $2 billion of that, mostly debt, at crucifying backstreet loan-shark terms. Inconveniently, prior to the COVID catastrophe, the vast majority of Airbnb's revenue was being generated by the batallions of huge players on the site - including the rogues and scammers. So if most of the big players either jump ship (as many of the legal, ethical management companies are doing, due to the 100% refund debacle), or are pushed (such as the over-leveraged and over-extended get-rich-quick arbitrage merchants that are going to the wall). .. who, exactly, is going to bring home enough bacon to pay off those "investors" and keep the vessel afloat? Because it sure as hell isn't going to be homesharers and small independent hosts. 

[Ute42]

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Hi @Susan17 

You may not like to hear what I'm saying now, but You can't make a profit by running a homesharing platform. You need hotels or vacation rentals to be profitable.

[Sarah977]

@Ute42 I disagree. I don't see why it couldn't be profitable. It just wouldn't so profitable that the CEO ends up with a 4.5 billion dollar net worth. A business can be profitable without being greedy.

[Susan17]

@Sarah977@Ute42 

Homesharers and small-time hosts probably don't even generate enough revenue to keep the Airbnb offices in toilet paper these days. Way too much hassle, for way too little returns. The only reason Airbnb still caters for homesharers is to perpetuate the fuzzy-warm, squeaky-clean, happy-clappy front, to hide their true money-spinning operations behind.

Kinda like the Mafia with their ice-cream vans. 

[Ute42]

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@Sarah977  

Any examples of profitable homesharing platforms?

Airbnb is using their homesharers with their affordable places as the entry level inventory to get young people onto their platform. As they grow older, they may then book bigger entire places. Or they may book a mansion next year for a family reunion of 12 and their parents pay for it.

There is no money in homesharing itsself = zero.

cc: @Susan17 

[Susan17]

@Ute42 @Sarah977

As I mentioned in my previous post, Airbnb very nearly failed to ever get off the ground in the first place, as investors just weren't interested in funding their home sharing business model. The only way they could attract initial investment at all, was to expand their offerings to include entire homes from Day 1, and plenty of them. 

[Ute42]

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@Susan17 

Yes, but despite getting all these entire places and all the hosts with an huge inventory of listings, they failed to become profitable. Look at booking holdings, they are profitalbe.

Airbnb's big thing was the IPO and they blew it. I once wrote to You that they should have gone public in 2018 as suggested by Lauwrence Tosi, but they wanted to get bigger and bigger and even bigger than that. And on their way to the top they have meanwhile p*ssed everybody off. They just don't know how to run a business like this.

[Susan17]

@Ute42

It will forever remain one of life's great mysteries why they chose not to follow Tosi's urgings to go public back then, at a reported valuation of between $50 - $70 billion (as opposed to their meagre $18 billion valuation today)

As a highly experienced and accomplished Wall St veteran who took the company the closest it would ever - or will ever - come to profitable during his tenure, one would have thought that the founders would have eagerly taken his lead. Clearly though, they felt they knew better, and preferred to remain in their "magical" dreamland of "infinite time horizons" and all that bollocks, while Tosi cleared his desk and stormed off into the sunset. 

Interestingly though, Tosi's investment vehicle, Weston Capital Partners, subsequently participated in a $210 million funding round in Sonder, and LT took a seat on their board. Sonder are currently floundering, having just laid off over a third of their staff (and presumably, somewhat nobbled by Airbnb gifting their countless thousands of guests with 100% refunds too). Airbnb is rumoured to be looking at acquiring distressed assets at firesale prices at the moment - and they don't come much more distressed than Sonder just now. Sonder vehemently deny they're for sale, of course, but desperate times call for desperate measures. Personally though, I'd say it'll be a miracle if either of them survive the coronavirus effect. 

[J-Renato0]

There is a theory:
Airbnb also uses home-share to putting them to compete with entire space listings and therefore lowering the nightly price of the entire space listings. By doing this Airbnb can get more bookings when competing with hotels and others STR platforms.

And there are guests that will ever go for home-share accommodation. It is a niche. Maybe it is not the biggest part of the cake... anyway Airbnb wants the money from this segment as well.

@Ute42  @Susan17

[Sarah977]

@Ute42 @Susan17  Well, that's depressing, that you don't seem to think it's at all viable. I'm no financial wizard, far from it, it just seems like if someone made a home-sharing platform and kept it simple, no fancy offices, no collecting of any $ but the booking fee (leaving it up to hosts and guests to arrange payment methods themselves), no superslick PR and webpage, fewer but well-trained and efficient CS, with no aspirations of getting rich, but just earning a living, that it could be successful, but I guess I'm just naive.