Brian Chesky, Open Letter, May 5 2020
Travel in this new world will look different, and we need to evolve Airbnb accordingly. People will want options that are closer to home, safer, and more affordable. But people will also yearn for something that feels like it’s been taken away from them — human connection. When we started Airbnb, it was about belonging and connection.This crisis has sharpened our focus to get back to our roots, back to the basics, back to what is truly special about Airbnb — everyday people who host their homes and offer experiences. .
For many homesharing and small local hosts out there, Brian Chesky's eulogising above was music to their ears.. a beacon of hope for a brighter future - a future where the wonderful, warm hospitality they provide for their guests and the invaluable, tireless work they've been doing for years - work that has been the cornerstone in building Airbnb's reputation, brand image and fortunes from the ground up - might once again be recognised, and valued, by this company to which they've devoted so much of themselves, and their lives.
Yet 5 months on, and it's a very different reality as Airbnb floods the 'Private Rooms' searches with Hotel Rooms, Boutique Hotel Rooms, Serviced Apartment Rooms, and Hostel Rooms - with the majority of the Pro and commercial offerings proudly sporting the 'No Fees To Guests!" banner, which Airbnb has assured them will boost their business dramatically and and increase their bookings by a whopping 17% - 21%. At whose expense, though?
A quick search this week of Airbnb listings for London, 2 guests, Nov 20 - 22, Private Room filter selected, returned the listings below at Numbers 1 and 2 in the search. Five of the top 10 listings shown to me were either 'Room in Boutique Hotel' or 'Hotel Room', and only one of the Top Ten listings was a private room offered by a Superhost.
Bear in mind too, that hotel listings can also be found by selecting the 'Hotel room' filter on the regular site, and additionally, are listed on the Airbnb-owned Hotel Tonight portal (which they splashed out around $450 million on. also in April of 2019) So hotel rooms are effectively getting 3 times the exposure and promotion, that regular private room listings are receiving. (The performance of existing company investments will be a very crucial component in Airbnb's IPO prospectus, of course)
The very first listing in the search returns that I was shown is an OYO listing. OYO Hotels and Homes is an extremely shady and controversial 'hospitality chain' outfit - once again, fronted by an arrogant kid in his 20's - in which Airbnb invested a reported $150 - $200 million in April of last year. They frequently have god-awful reviews - this one which Airbnb saw fit to return as the first choice in my search is a 3.67 star rating - and the company's toxic culture and shameful, exploitative business practices were exposed in the New York Times earlier this year..
At SoftBank’s Jewel in India: ‘Toxic’ Culture and Troubling Incidents at OYO
Yet Airbnb still sees fit to blatantly promote these substandard listings over and above the private room listings of long-serving, highly-rated exemplary Superhost homesharers. Ask yourselves - if there is any truth in Airbnb's "back to our roots" claims at all, or indeed, if there is any real place for homesharing or small local independent hosts in Airbnb's future 'roadmap' - why that would possibly be?
TOP 10 LISTINGS IN RANDOM PRIVATE ROOM SEARCHES AROUND THE WORLD
(NOV 20 - 22, 2 GUESTS)
Top listing - Private Room, Westlake 3.25 stars.
3/10 are Hotel listings
4 Private Room Superhosts.
Top listing - Boutique Hotel, 4.27 stars
4/10 Hotel Rooms
1 Private Room Superhost
Top listing - Boutique Hotel (New listing).
6/10 Hotel listings
2 Private Room Superhosts
Top Listing - Hotel Room - New. No reviews
5/10 Hotel Rooms
2 Private Room Superhosts
Top Listing - Hotel Room - Radisson Blu (2 of Top 10 are Radisson Blu)
6/10 Hotel Rooms
2 Private Room Superhosts
Top Listing - Boutique Hotel - 4.27 stars.
7/10 Hotel Rooms
2 Private Room Superhosts
Top Listing - Boutique Hotel - 4.44 stars
8/10 Hotel Room listings
1 Private Room Superhost
Top Listing - Hotel Room - 4.67 stars
5/10 Hotel/Serviced Apt Listings
3 Private Room Superhosts
Only 263 Private room listings available (out of 6209 listings)
Top listing - Boutique Hotel - 4.59 stars
1 Private Room Superhost
Top Listing - Hostel Room - 3.97 stars
4/10 Hotel Rooms
2 Private Room Superhosts
Top listing - Private Room, 4.68 stars
Only 2 of Top 10 are Hotel Room listings *but* FIVE of the Top 20 listings are Boutique Hotel listings for the same hotel
And so on, and so on..The pattern is repeated globally, and is increasing exponentially. Homesharers ansd small, independent entire home hosts - protect yourselves. If you haven't done so already, you need to start looking at other options, because you're not being allowed compete on a level playing ground.
Airbnb has clearly stated on numerous occasions that the high-risk criteria for party bookings are under-25s, last-minute, local, one night bookings and/or guests with no reviews.
Yet many, many US hosts are now reporting that guests who fit none of those criteria are being blocked from booking Entire Homes for stays of fewer than five nights and are being redirected to book a hotel or a private room on Airbnb instead (with the Private Room searches on the platform now heavily featuring Hotel rooms, Boutique Hotel rooms, Hostel rooms and rooms in Serviced Apartments - all of which can also be found using the Hotel Room filter, and additionally, on Airbnb's own Hotel Tonight portal)
It seems terribly unfair (to put it politely) that Entire Homes hosts should be forced to lose out on low-risk bookings of up to 5 nights on one of the busiest weekends of the year, while the bookings they should have gotten are being redirected to book hotels on Airbnb instead.
And an article from just today, from Skift founding editor Dennis Schaal, also drawing correlations between the party house ban and the associated timely and rather convenient benefits for the Hotels, Boutique Hotels, Hostels and Serviced Apartments on the Airbnb platform.
Just In Time For An IPO - Airbnb's Hotel Business Is Benefiting From Its Party House Ban
I am sure the absolute ban of halloween bookings has to do with the upcoming IPO. Imagine, 2 weeks prior to their IPO 5 people get shot to death in an airbnb listing as it happened in Orinda last year. This would be a desaster and somehow I do understand their fear that this may happen. Unfortenately many hosts are loosing out income at the busiest weekend of the year due to this ban.
Absolutely, it has to do with the IPO, @Ute42. What do you think the chances are of an out-of-control rave with 200 people happening in the spare bedroom of a host's own home are though? Clearly, Airbnb feels that's just too huge a risk to take, so they're apparently blocking private room bookings now too, and redirecting the guests to book one of their hotels instead.
Must be truly desperate to skyrocket those Halloween Hotel Tonight booking stats for the next instalment of the triumphant Airbnb 'miraculous recovery' story to be pushed out on blast to the global media just in time for the IPO. Stand by for the "Wow! Airbnb Hotel bookings up by a gazillion percent in comparison to 3/6/12 months ago!" fairytale. Coming soon to a media outlet near you!
And the really tragic thing is, so many will swallow it hook, line and sinker.
The latest version...
The most sickening part of it is that they're selling their IPO on the "back to our roots" myth - every single interview and podcast Chesky does, he's trotting out his 'human connection' mantra, ad nauseum, using small hosts yet again to try and pull the wool over investors', the media, regulators' and the general public's eyes. While at the very same time, stabbing them in the back.
So investors and regulators just take a CEO's word for something, they don't do any fact-finding research themselves? That seems stupid.
I used to give Chesky the benefit of the doubt, like he had good intentions but the business just got too big too fast and he was sort of out of his depth and skill set, but by now it's pretty obvious that he really doesn't care at all about hosts and has no qualms whatsoever about lying and using others in whatever way necessary to ensure he remains a billionaire.
So investors and regulators just take a CEO's word for something, they don't do any fact-finding research themselves?
And therein lies the crux of the matter.. Airbnb obsessively controls the narrative of all the information that's available about them in the public sphere with an iron grip, and unless a person is fiercely, fiercely determined to get to the truth, they'll very easily be swayed by the Airbnb fairytales being perpetuated and celebrated all over the global media.
We only need to observe the goings on in this Community Centre to see how shrewdly and slickly Airbnb orchestrates the flow of information, manipulates the narrative and diverts user attention. Catherine Powell's carefully choreographed 'Host Updates' are meticulously timed to drop in perfect sync with the global Press Releases Airbnb will have typically issued just hours beforehand. Invariably, there are plenty of little anomalies and discrepancies in these updates to cause mass chaos and confusion - chaos and confusion that neither Catherine nor Airbnb ever seem to be in any particular hurry to clear up.
Meanwhile, as hosts scrabble around like headless chickens trying to work out what, exactly, the latest convoluted, ambiguous 'host update' will mean for them, or tie themselves in knots worrying about how they can possibly avoid being delisted for non-compliance with whatever onerous, farcical (wholly unworkable and unenforceable, btw) PR-stunt diktats Airbnb has concocted to further enslave them with this week - their attention is totally and completely diverted from all the really egregious stuff stealthily taking place in the background. Stuff that will very soon have an infinitely more detrimental and catastrophic effect on the viability of their hosting futures on this platform than any crazy cleaning protocols or sneaky policy changes (like Airbnb systematically promoting hotels, hostels and serviced apartments over the listings of homesharers and small local hosts in searches, for example)
Also, they'll be conveniently distracted from picking up on all the complete and utter falsehoods currently doing the rounds in the media, such as this little gem from lats week's sycophantic, whitewashed puff-piece in the Wall St Journal, no less, with our conquering superhero Brian on how he single-handedly rescued Airbnb from certain disaster, just in the nick of time (and respected publications like the WSJ are where many investors' impressions are formed)
How Airbnb Pulled Back From the Brink - WSJ
"He [Chesky] also sought to make amends with hosts angered by his refund policy at the height of the pandemic shutdown by allocating funds from the money he raised to reimburse them for a third of canceled stays"
Reimbursed hosts for a third of cancelled stays..?? I'm pretty sure hundreds of thousands of hosts around the world would beg to differ on that little stat.. but still.. true or not, that's now going to be swallowed by all who read it.
From the outset, Airbnb has been notoriously secretive and covert with any and all information relating to its inner workings - to the point of spending hundreds on millions (if not more) of dollars/pounds/euros on legal battles worldwide to retain the rights not to have to hand over the relevant stats and data to regional and national authorities that would give them a clear and true picture of individual vs. commercial Airbnb activity in their towns and cities, and allow them to draft fair and equitable regulations for all. And we all know how that turned out - with armies rogue and illegal mega-operators running rampage all over the platform, and small, local independent operators being pushed out of business in thousands of markets. But yet, even as every dog on the street gradually became aware that the majority of Airbnb listings are now offered by 'property management companies' and commercial entities, the 'live like a local' myth still somehow abounded.
As regards the (hilarious) speculative financial analyses and hyper-optimistic (read, delusional) projections of Airbnb's 'path to profitability' that are currently flooding every media outlet on the planet - the vast majority of that is being fed directly from the the company's gargantuan PR machine, and simply being regurgitated, word for word, by all but a few (a very few) tenacious and intrepid investigative reporters. Unfortunately though, more often than not, the dissenting voices just get drowned out by the cacaphonous noise of all the triumphant 'miraculous rebound' stories and the glorious 'Heroic Brian saves the day' tales that have been swamping most publications over the last several months. Makes one despair for the future of truth and journalistic integrity.
And then you have the likes of Business Insider printing the most jaw-droppingly inaccurate and erroneous analysis to date of Airbnb's current state of play and future projections (astoundingly, compiled by the usually very savvy market analyst and commentator, Prof Scott Galloway of NYU Stern), you suddenly realise just how brainwashed and hoodwinked even the most experienced investors have been by the Airbnb Hype Machine. (There's some excuse for Business Insider printing this BS - their parent company, Axel Springer, is an investor in Airbnb - but one can only assume that Prof Galloway must have ingested some potent hallucinogens recently, or something)
Depressing beyond words to see this calibre of misinformation/disinformation being freely peddled ad infinitum, but once you start to see it everywhere you look, it does become crystal clear how/why such a complete shambles of a company still somehow manages to maintain something of a noble, positive, successful image in the collective public consciousness
@Super47 The principal investors likely have their rear ends flapping in the breeze. They will need the naïve and gullible to pump the listing price so they can clear a profit, then outta here.
The pandemic isn't going anywhere anytime soon. ABB northern hemisphere just had to have it's summer of fun, now comes the second wave, winter and further lockdown risks.
It is indeed an extraordinary conflict of interest for the platform to be promoting its hotel & large property manager listings over authentic local hosts. But as @Sarah977 says Brian is out of his depth, busy faking it and not interested in ABB's roots except as a marketing tool.
I just read Your screenshot:
The tech firms projected 2021 revenues of $5–6 billion could yield a potential $100-120 billion valuation which Galloway (professor of marketing at NYU Stern) says makes it the most valuable private firm in America today.
That is ambitious. Wasn't airbnb's valuation at $18 billion in april this year? And now a projected valuation of $100-120 billion next year? That's an increase of 1000% in times of COVID. Wow.
And where should the projected $5-6 billion in revenue come from. Lufthansa said, they still expect 50% of their planes grounded next year.
Just to put things into perspective, here is the NASDAQ futures chart as of NY close today. The reason they just HAVE to float Nov 11 (or thereabouts) is because earnings from Q3 will look pretty after the northern hemisphere summer. The dumb money will pile in, and then the smart money will exit pdq. And btw, do you see those wicks forming at the very top of the price action? They indicate a raft of sellers at that price level, high probability NASDAQ (which is the home of all things tech) is heading for a big south hike. Many market commentators who know what they are doing believe this is a tech bubble that's about to pop.
The huge problem here is that market commentators like Scott Galloway hold a lot of sway and influence, particularly with the more unsophisticated and inexperienced mom and pop investor types and Robin Hood traders, so putting out tripe like he did in his blog- clearly without doing any sort of homework - is utterly reckless and irresponsible.
Below, an excellent article from earlier this week from Skift Senior Research Analyst, Seth Burko, which gets much closer to the real state affairs, and completely debunks Prof Galloway's ludicrous analysis and fantastical projections.
Comparing Airbnb To Hotels Is A Mistake - Investors Need To Remember That
PS Young Mr Burko received his first ever piece of irrational hate mail over this article! He's taken that to mean he's made it 😏
Good article (as were the others re ABB linked on that site).
Ya just have to follow the money trail @Super47 . Anyone associated with the IPO in a private equity role however large or small, anyone with connections to others with private equity will be pumping the life out of this launch. The company has high interest loans to pay off asap and employee stock options to honour.
I was a little horrified to see this from Brian, right here https://news.airbnb.com/designing-the-future-of-airbnb/
Today, I’m thrilled to announce that Jony and his partners at LoveFrom will be engaging in a special collaboration with me and the Airbnb team. We have made the decision to work together through a multi-year relationship to design the next generation of Airbnb products and services.
One can only imagine what the "next generation of ABB products and services" is going to look like..... Disney fantasies (complete with theme parks, film studios, meet, greet and follow a real person doing a real job (but on a constructed stage) this being something of a novelty for millennials?). Especially considering the company can't even get the existing basics right.
As a retail trader and technical analyst myself, and looking at the NASDAQ chart, if I had any advice for Airbnb's CFO, it would be to launch the IPO asap. There are so many risky fundamentals in play here, the US election, the role of the US Fed, the high risk of a much worse pandemic Wave 2 but without the consumer cash in play due to shrinking job and income pool, an exhausted tech bubble, and the cyclical end of month pump n dump that happens regularly. If the markets do turn south, it is usually an express elevator ride down, compared to the stair step up approach of a bull market. Getting proprietary investors (pension funds, hedge funds, bankers, brokers etc) on board during a major market down turn will be nigh impossible.
And the potential consequence of all of this for hosts?......... Not getting paid. Having Airbnb use our money that should be held in escrow to fund it's own flights of fancy. Authentic local hosts being further side-lined in favour of other aspects of the Airbnb business model. Worse case scenario, the company going into liquidation, hosts not being on the list of creditors or only getting cents in the dollar for work we've already undertaken but not been paid for.