Extremely troubling developments for Airbnb in the light of the impending IPO. For several years now, the company has actively and deliberately sought to keep hidden the true scale of the takeover of the platform by professional property managers and commercial entities, preferring instead to sell itself on its increasingly mythical 'live like a local' image. However, with full disclosure being a key and critical element of US Securities Laws, it appears that it may now finally be compelled to lay bare the real data.
The truth always comes out in the end.
"Dozens of affordable housing groups and community organizations that have long accused Airbnb of exacerbating housing shortages are taking their grievances to U.S. financial regulators just as the short-term rental giant prepares to go public.
In a letter to the U.S. Securities and Exchange Commission viewed by The Information, the groups complain that Airbnb hasn’t complied with rules limiting short-term rentals in many cities. They contend that Airbnb should be required to disclose more information to investors about how many rentals on its site are run by professional property managers"
Over the years we have analyzed Airbnb to death and I believe many of us have some idea of what the Airbnb reality is, and isn't.
Of course, they have had a huge impact on housing opportunities on local municipalities by shifting existing housing inventory toward STRs, which infuriates local governments and is almost impossible for them to prove since Airbnb has metered out their data so reluctantly. On the other hand, in the meantime it has afforded countless individual people to make money in a whole new way that they never envisioned.
I see Airbnb as a very confused, knee-jerk entity; one is never quite sure what is next, and even sometimes can be outright ruthless. On the other hand, I have less faith on government institutions whose missions often sound marvelous, but whose propensity for corruption, favoritism and control is a staple to their mentality and way of doing things; power always corrupts and is usually equally capricious. And no, I don't put any faith on they looking out for the 'little guy' (aka individual renters) vs. the goliaths (professional operators) or to use new-found information in only a benevolent way toward the former.
When local governments gets a hold of the real Airbnb data, the first thing they will do is to make a beeline for taxation, namely auditing individual STR owners to collect money they perceive 'due' to them and they will pursue that ruthlessly. Secondly, they will be in a position to control as to who can and can't be a STR renter, which happen to be in directly in competition with the local hotel entities and take a wild guess who has the most collective influence? Airbnb is a lose-as-goose entity in comparison to this new potential more-dangerous master.
I wish Airbnb was bright enough to change internally (i.e. that Host Guarantee stupidity, unshakable belief on the guest, clean out its host roster, etc) but I don't think they even get it; but that at least makes them somewhat powerless and easier to circumvent. Government (regardless of level) is also not filled with rocket scientists, but they have the power of City Hall, which can make them a formidable enemy every time.
So good luck to your cause @Super47 , whomever you are, but I for one is not a fan of it, for many reasons.
Thank you for the comment.
You say that over the years, Airbnb has been analysed to death - but one can only properly analyse anything when one is in possession of all the true facts and figures. As a result of Airbnb's refusal to release even the most basic data relating to their operations since their very inception, it has been next to impossible for even the experts to conduct proper analysis on the company, so everything up to this point has been nothing more than guesswork and wild speculation.
The release of the S-1 will be the first and only time in Airbnb’s history that anyone will ever have had the opportunity to scrutinise and analyse the company's claims, financials and processes properly, based on real information that has never been publicly available before. That's if their filings contain full material disclosure and no omissions or misrepresentations, of course. Anything less would be in violation of the Securities Laws - an extremely serious offence which would have the potential to derail the IPO altogether, a la the We Work disaster.
I can assure you, Airbnb shifting housing inventory towards STRs hasn't only infuriated local governments. It has incensed and infuriated life-long local residents, who have been priced out of their own cities and displaced from their own hometowns - the cities where they and their families have grown up, lived and worked all their lives, but are now forced to leave because due to the vast swathes of available housing stock being plundered and pillaged by out-of-town and foreign investors - most of which nowadays are large corporations and/or vulture funds/REITs.
While Airbnb couldn't seem to get their customer support act together (be it by accident or design) for the past 7 months - and individual hosts have struggled to get a response to even the most urgent issues, such as missing payouts, house thrashings etc - the company still somehow managed to keep a small army of agents on board throughout, whose sole job it has been to spend all their time phoning professional property managers every day, going all out to persuade them to relist their extensive property portfolios that they'd removed from the platform during the pandemic. Kind of makes a mockery of the back to our roots narrative that they're so fervently pushing pre-IPO.
As does Airbnb's Real Estate plans. Despite having publicly claimed a short time ago that they were shelving those plans to concentrate their focus on their 'core community', behind the scenes, they're still ploughing ahead with their efforts on that front.
The company, as we speak, is currently recruiting for a Real Estate execs, part of whose remit it will be to "compel developers, operators and owners of Multifamily Housing to incorporate Resident Hosting into their investment strategy" (think the disastrous "Niido powered by Airbnb pilot" project, where hosts were 'permitted' to rent out their apartments in designated developments in return for handing over up to 30% of their earnings to the 'management company' on top of their usual hosting fees to Airbnb, and which turned residential housing blocks into giant, frat-house-type Airbnbs" and made pre-existing residents' lives pure hell.
The Real Estate team is also tasked with "leading our efforts to increase the adoption of hosting among the largest landlords in the world and further the Airbnb mission" The 'largest landlords in the world', as everyone is probably aware, are the likes of your Blackstones and your Brookfield Partners (which Airbnb already collaborated with on the Niido projects) - the very same REITs and vulture/cuckoo funds that are currently hoovering up all the 'distressed assets' (ie homes) that millions of regular individuals and families around the world are losing due to the catastrophic effect the pandemic has had on their finances (including innumerable Airbnb hosts who have lost their homes and businesses - in many instances, due in no small part to Airbnb’s now 7-month old Covid-19 Extenuating Circumstances policy)
And then we have Samara, Airbnb co-founder Joe Gebbia's 5-year-old pet project - an entire experimental product department within the company, comprising 'an eclectic team which includes industrial designers, interaction designers, architects, roboticists, mechanical and hardware engineers, material specialists and policy experts', solely dedicated to 'reimagining how houses are built, using a more humanistic, future-oriented, and waste-conscious design'. Samara is also currently recruiting a 'world class Leader to help drive global scale)
Interesting to note that both the Real Estate and Samara arms of the company apparently continued relatively unscathed throughout the pandemic, while the Customer Support, Payments and Trust and Safety teams and departments imploded. Speaks volumes of Airbnb's priorities.
There's a reason why the numbers of listings offered by small, individual hosts is plummeting (and was plummeting, long before COVID) in the majority of markets, while the numbers of listings from professional operators continue to skyrocket. Wall St Journal reported several months ago that a third of all listings are now from 'hosts' operating between 2 and 24 listings, while a further third are listing 25 or more properties on the platform (and you can be sure those numbers have increased exponentially as the pandemic has rumbled on)
And there's a reason why private room listings in cities such as Nashville, for example - which over the past several years (while small local hosts were having their permits rescinded) became totally swamped with "Niido powered by Airbnb" listings, Airbnb-funded Lyric offerings, and huge numbers of listings from mega-host such as Sonder, Stay Alfred and Domio (currently "suspended for investigation" - not instantly banned, oddly - after being roundly exposed by the media for fraudulent activities and unethical/illegal business practices. Also widely rumoured to have a slightly more chummy 'relationship' with Airbnb than the regular 'platform/host' set-up) And what's happening in Nashville is being repeated all over the globe. We could, I suppose - if we were really naive - choose to believe that's all just transpiring organically.
So while the rather quaint but now increasingly historic concept of Airbnb being a somewhat shambolic but largely well-meaning entity that "has afforded countless individual people to make money in a whole new way that they never envisioned" was certainly once upon a time the reality for all - and arguably still is, for the minority of fortunate individual hosts who haven't personally been affected yet - the experience of hundreds of thousands of their fellow small hosts is a very different reality indeed (as evidenced by the daily flood on posts from traumatised and desperate hosts on this forum and many others) I'm quite certain that many of those hosts would equally regard Airbnb itself as also having a propensity for corruption, favoritism and control.
My 'cause', as you so cutely put it @Fred13, is simply to challenge the company narrative and to lay out the other side of the story. The real Airbnb story, that is, rather than the magical fairytale they're ubiquitously peddling now, with the sole aim of reeling in and seducing potential (and in many cases, unsuspecting) IPO investors - a great many of whom will inevitably be unsophisticated small-time RobinHood day-traders and mom-and-pop investors, perhaps risking their savings by taking a punt on what they may perceive as a noble, ethical, honourable company, and a sure-fire bet. My aim is merely to provide them with an alternative, more truthful, more realistic perspective on Airbnb so they can weigh up all angles and make more informed decisions, before they potentially lose their bollocks.
Hardly a crime, is it? And I'm sorry you're not a fan, but that's entirely your prerogative.
Something I forgot to mention above, further to Airbnb's plans to work with the "world's largest landlords"..
Crucially, as per the job specs on Airbnb's own Careers Portal, the Real Estate team is also tasked with "leading our efforts to increase the adoption of hosting among the largest landlords in the world and further the Airbnb mission" The 'largest landlords in the world', as everyone is probably aware, are the likes of your Blackstones and your Brookfield Partners (which Airbnb already collaborated with on the Niido projects) - the very same REITs and vulture/cuckoo funds that are currently hoovering up (at firesale prices) all the 'distressed assets' (ie homes) that millions of regular individuals and families around the world are losing due to the catastrophic effect the pandemic has had on their finances (including innumerable Airbnb hosts who have lost their homes and businesses - in many instances, helped along in no small part to Airbnb’s now 7-month old Covid-19 Extenuating Circumstances policy)
In March of 2019 - a full 18 months ago, UN Special Rapporteur on The Right to Adequate Housing, Leilani Farha, wrote to the governments in the Czech Republic, Denmark, Spain, Sweden, Ireland and the US, condemning what the international body called the "egregious" business practices of the giant private equity and investment firms. It said they were scooping up low-income and affordable homes, upgrading them, and substantially raising rents - forcing tenants out of their own homes.
"Almost overnight multinational private equity and asset management firms like Blackstone have become the biggest landlords in the world, purchasing thousands and thousands of units in North America, Europe, Asia and Latin America," the UN said.
And now, in a Covid-fuelled bonanza - instead of renting those incalculable numbers of homes on the long-term markets, the REITs/vulture funds have the perfect arrangements in place to work hand-in-hand with Airbnb to make even more money on renting those homes that regular people have been forced out of, or have lost because of the financial difficulties the pandemic plunged them into. So much easier and more lucrative to list all those properties out on Airbnb instead, rather than renting them back at extortionate prices to those newly-penniless local peasants whose homes they were in the first place, and who now couldn't afford their newly-inflated rents in a million years anyway.
The Airbnb/REIT connections have been already quietly going on pre-Covid, of course, and the vultures have been listing on Airbnb for quite some time (sometimes under the guise of regular "hosts" or relatively small property management companies, but more often than not, with 'successful' MegaHosts as a front). However, from their own stated intentions above, it would appear that Airbnb's future plans and business model are now very much linked with (and focused on) capitalising on their esteemed vulture connections to the absolute max.
Very, very far from Airbnb's "roots", indeed.
Apologies - also typo in the first post. Should have read " There's a reason why private home listings in cities such as Nashville, for example, have plunged to just 7% of active listings.."
Actually @Super47 we are not that far apart in our sheer contempt of ruthless business practices, just differ on how to combat it, meaning who exactly will get to do something about it. There are choices to Airbnb, there are none to City Hall.
P.S. New York City & Airbnb just yesterday settled their long-standing feud over the Airbnb data, and now that pack of politicos will be deciding what to do with it. Watch this show over the next year. Prediction: they will ultimate set a quota how many nights each STRentors can rent per year, and slowly wither that number till they hit the one that meets the full satisfaction of the very powerful hotel industry, which is - exactly zero.
As a lifelong engaged voter, it makes me sad to realize that the current narrative is that we cannot make choices about city hall, that we no longer (never did ?) believe in the social contract a living democracy requires.
My advice for small time hosts worried about upcoming local regs has been to organize and go to their local council people- hotel lobbies can't suppress the vote in a local election & one's vote has the biggest impact in local politics .
I have seen it in action, a critical vote way back when in the County of Santa Cruz, came down to 74 votes cast on the side of the angels. (that's why there's not a nuclear reactor on the coast north of Santa Cruz)
Democracy takes effort, paying attention, digging a little deeper, asking questions, asking even more questions, it is not an institution of the lazy minded. To quote Ben Franklin: " we have a republic, if we can but keep it"
@Sally221 When I lived in Canada, I saw that there wasn't big voter turnouts for local elections. I used to tell people that voting in a local election is super important, as you actually have access to local city council members (at least where I lived, you could phone them and actually talk to them) and can participate in decision making which affects your life much more directly than state or federal elections.
I experienced that first hand a few times; one event was fighting City Hall for two straight years for the protection of animals, finally got it done and the law still stands 20 years later, but what a wall of obstinance and ignorance it turned out to be. Yes, anything is possible with the right amount of effort.
Sorry, nothing personal, but I see you live in a tax haven, so I fully understand your worries about "a new potential more dangerous master".... Sorry couldn't resist that one.
Otherwise I totally agree with your remarks about how Airbnb has allowed home owners to make an extra penny or two
Belize is not a tax haven, at all; we pay 9% on lodging + 2.5 local tax on it = 11.5%. Oh, and actually Belize already gets the Airbnb data, so I am speaking from first-hand experience. You assumed I am coming from a self-interest perspective, your prerogative. I moved to Belize to not be under the yoke of Big Government. Peace to me, is worth every penny.
And another one bites the dust..
Joe "Joebot" Zadeh - Airbnb's Chreif Stakeholder Officer and Catherine Powell's predecessor as Head of Experiences - has just left the company after a ten and a half year tenure.
Zadeh - Airbnb's 9th employee and third engineer - joins Rob Chesnut - former General Counsel and Chief Ethics Officer, Greg Greeley - President of Homes, Margaret Richardson - VP of Trust and Aisling Hassell - VP of Community Support in the apparent stampede for the exit over the past couple of months. Belinda Johnson (often referred to as Airbnb's Sheryl Sandberg) former COO and Brian Chesky's right-hand woman since 2011 ( often referred to as Airbnb's Sheryl Sandberg) also stepped down in March.
The abrupt departure of so many of their highest-ranking executives - when Airbnb is on the cusp of IPO, raises a lot of red flags and is definitely not going to be looked upon in a favourable light by potential IPO investors.
@Super47 OMG Susan has a twin sister , Penelope !!
Just for info, it was reported in the Aussie press last week that 40,000 properties (in Aussie alone) have left Airbnb for the LTR market, hence the glut of empty LTR apartments in major cities. I rather think Covd-19 is going to have a lasting impact, many STR's just won't return, at least not for a few years and even then many investor landlords will be dumping their housing stock being over-committed thanks to the former easy money investment loans (soon to be a thing of the past)..
The conglomerates might want to buy now thinking it's bargain price time, but they may well get a rude shock when 12 months hence, their brilliant idea remains unoccupied and a balance sheet liability.
Airbnb will just do what it can to make the best of a crappy situation. I do think Fantasy-land Catherine Powell's appointment was quite ironic and no accident. Don't expect any change.
The one big take-away from Brian's chummy chats with hosts during early Covid, Brian's staunch belief that "What is good for guests is good for hosts". And that my friends seems to sum up everything about Airbnb's "commitment to hosts" in one sentence.
So, just do your own thing, take what you can from the platform, and find the sunshine in life elsewhere.
As far as I am concerned, I don't care. I'm in the drivers seat. I can list my place on any platform and and that's what I do, or even without a platform through google adwords and what else is out there.
As far as Brian Chesky is concerned: He built a billion dollar company from scratch, respect. Unfortenately he missed the best point in time for an IPO and that would have been in 2018. Lawrence Tosi wanted that, he didn't. And then he ran out of luck due to COVID. Well, that's not his fault. I think his only fault is, that he's just the way he is. I wouldn't want to be in his shoes bc the great idea he had has meanwhile turned into a headache.
I do not want airbnb to go out of business. The worst thing that can happen to us is that in 3 years from now only one major OTA is left. That would be terrible for all of us. Let it be the way it is now, let the CEOs of multiple platforms fight against each other, let them have endless business meetings discussing what they can copy from each other and come up with a never ending list of new and revolutionary ideas which may or may not work. What's the basic business model? To make contact between guests and hosts, what's so difficult with that?
I find a little sunshine in my life by reading an writing in this Community Center. 5% of the posts are interesting or entertaining. I don't have to read all of remaining lettersoup, as we say in Germany, like „guests closing blinds“.
Things have become uncertain and they will remain uncertain for years. We have to adjust to that and change our behaviour.
Good luck to everyone.
@Ute42 I totally agree with you--I don't want them to go under either. But a lot of things will have to change, as far as I'm concerned. It's a good thing to remember that we ARE in the driver's seat, meaning we have control over where we list our property. If I find that Airbnb is not working for me anymore, I know that there are options. 😉
PS: letter soup=Buchstabensuppe? Bin in Fulda geboren und aufgewachsen, aber bei uns hieß das immer Buchstabensalat soweit Ich mich noch daran erinnern kann...oder? Seufz, Ich glaub, mein Deutsch ist etwas eingerostet. 😂