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"

 

https://www.theinformation.com/articles/airbnb-opponents-take-fight-to-sec-ahead-of-ipo

 

90 Replies

Re: Airbnb's Chickens Coming Home To Roost

in
KCMO, MO
Level 10

We've got the same issue here in Kansas City. Airbnb lobbied hard for existing hosts to push the City Council to make STR's legal. Afterwards investors moved in and we think as much as 75% of the listing didn't bother to file any of the required paperwork. There were two illegal parties that ended in shootings, and nearby, one host was actively promoting his listing for up to 20 people even though the legal limit is 8. Then lied about it during the hearing where he was asking for a "special use" permit after the fact.

He was even bold enough to say his colleagues were all operating illegally and told him not to bother registering.  At an earlier hearing I saw that the zoning board was unamused with a landlord asked for all five of his units in a single building to be an Airbnb because he couldn't find long term renters despite his prime location. Then lied and said if they denied his request none of the guests would get their money back.  They gave him four months probation to get a hotel license. 

I would have to agree with the original post - Airbnb is quickly becoming a de-facto hotel business filled with absent LLC/investors using their units to offset g ordinary income with depreciation losses.

Airbnb could help the situation if it would do what it did in Japan and just kick off all the listings not in compliance with local laws. 

Re: Airbnb's Chickens Coming Home To Roost

in
Lloret de Mar, Spain
Level 10

@Super47Penelope, I love your posts, and given your level of clearance and awareness, there's something you didn't share with Brian, no less)))

Re: Airbnb's Chickens Coming Home To Roost

Level 10

Thank you so much, @Anna9170! 😏

 

It's become pretty clear that there are a few self-appointed 'gatekeepers' on this forum who appear to object to the content I'm posting (rather bizarrely, as everything I'm posting is factual and provable), but this thread received 4-5 times as many views as most other threads yesterday so at least people are reading what I've written, and that's good enough for me! Based on the frosty, territorial reception some stalwarts of the group are routinely meting out to new members though, it really is no surprise at all that there's such pitifully low engagement from fresh posters on here. So much for 'community'. Frightfully sad. 

 

But thank you once again for your vote of confidence Anna. Jolly decent of you! 🌹

Penelope

Re: Airbnb's Chickens Coming Home To Roost

in
Boise, ID
Level 10

@Super47   thank you for your enlightening posts.  You remind of a certain, Irish fellow host who stuck her neck out a little too far, only to have it chopped off by Airbnb.   Watch your back.  😉

Re: Airbnb's Chickens Coming Home To Roost

Level 10

You're welcome, @Ann489! Yes, I've been warned about the fate of that Irish poster already - she seems somewhat notorious around here! Checked out some of her posts too - I'd have to say, she and I are probably on a rather similar wavelength actually. From what I've heard and read of her though, it seems to me that it would be something of an impossibility to keep that one in her box for very long, chopped neck or otherwise! 😏

Penelope

Re: Airbnb's Chickens Coming Home To Roost

in
Lloret de Mar, Spain
Level 10

@Super47  Penelope, any forum is "mafia". 😎  where there are their own groups, and here it is also quite understandable. I have been "living online" for a long time, although in another country and in another language, but in fact everything is the same. 😆
The most important thing is that there are beautiful people here, who are open and without snobbism, so don't stop, you bring very important facts here! 🤓

Re: Airbnb's Chickens Coming Home To Roost

Level 10

@Anna9170

Thank you! Absolutely agree, there are some fabulous people here! And it would take a lot more than any forum mafia to stop me from posting whatever,  whenever or wherever I feel like posting! I've no intention of stopping anytime soon 😏

Penelope

Re: Airbnb's Chickens Coming Home To Roost

in
Ventenac-Cabardès, France
Level 3

I've been in the hosting business for 20 odd years and before Airbnb i always avoided going through a third party who took and kept my well earned  money from guests before paying it out to me. Airbnb is quietly monopolising the market setting it out its own rules, including keeping our monies! I want to have as much financial information as possible before letting someone keep my money... Isn't that a normal way to run a business??  @Mike-And-Jane0@Super47

Re: Airbnb's Chickens Coming Home To Roost

Level 10

@Jenny569

While the Big 3 (Airbnb, Booking and Expedia undeniably have - for now - monopolistic control over the entire global market, there has been a seismic shift in recent months back towards the traditional (although updated) Direct Booking model. Both hosts and guests have become deeply unenamoured with the major players (and their sizeable fees) having such an oppressive stranglehold over proceedings. The OTA's won't be going away anytime soon, but they're gradually losing their privileged position of being the only game in town.

 

More and more alternative and additional opportunities are opening up to hosts to lay out their stalls now, and early indications of them becoming a viable option are certainly hopeful. 

Penelope

Re: Airbnb's Chickens Coming Home To Roost

in
NY, NY
Level 10

@Super47  Extremely enlightening post, thank you.  I would love the required pre-IPO disclosures to have some kind of impact but of course find that I'm equally waiting to hear how they weasel out of it.  Ugh.

 

I thought this particularly fascinating:  "The company is preparing to roll out new technology to give cities access to data on short-term rental activity, a person familiar with the matter said. The exact nature of the product couldn’t be learned."

 

Data accessed by new technology...hmmmm - I'm just assuming those who control the technology control and choose the data accessed.

Re: Airbnb's Chickens Coming Home To Roost

Level 10

 

You're welcome, @Ann72.  The S-1 filing should make should make fascinating reading when it's publicly released in a few weeks (almost certainly not before being updated with the Q3 results though) It'll be particularly interesting to see what it contains in relation to the company's financial performance, path to profitability and how it intends to spend the money it raises, and the summary of its business model promises to be enthralling. I'd say it's a safe bet that there'll be more than a touch of the Disney fairytale about the whole thing. 

 

As regards the conveniently-timed (but typically vague) claims of the new technology to give cities access to data - considering they've spent most of the last decade spending hundreds of millions on legal battles worldwide to win the rights to keep that exact data hidden (with the recent New York capitulation being nothing more than a strategic pre-IPO ploy), my guess is that the alleged new technology is every bit as much a magical fantasy as the eagerly-awaited IPO Prospectus will likely turn out to be 😏

 

Sorry to read about you losing your little dog, by the way. Hope you're doing okay. 

Penelope

Re: Airbnb's Chickens Coming Home To Roost

in
NY, NY
Level 10

@Super47  Thank you 🙂  I wonder if this is one IPO that won't be overvalued.  Is there anyone who hasn't heard the year's worth of bad press? 

Re: Airbnb's Chickens Coming Home To Roost

in
Germany
Level 10

.

@Jenny569 

 

You wrote

 

  • Airbnb is quietly monopolising the market

 

 

That is not true. Airbnb's biggest competitor is booking.com.

 

Here are the 2019 metrics:

 

 

  • booking.com (Booking Holdings)

    Revenue = 15.066 Billion USD
    Profit (EBITDA) 5.872 Billion USD
    Return on sales = 39%, that is huge,
    the german carmanufacturer BMW had only 5% in 2019

  • airbnb

    Revenue = 4.2 Billion USD (says the wallstreet journal)
    Profit = Zero (they made a loss of 278 Million USD in Q4/2019
    Return on sales = zero (negative)

 

 

Booking.com are almost 4 times bigger than airbnb and they were highly profitable in all previous years.

 

Some people say if You are homesharing there is no option to airbnb. That is also not true. Booking has a room category „private room“. They don't promote it much though, as no platform has ever made any profit with homeshared places. There are fellowhosts in Germany who are now successfully renting their homeshare place through booking.

 

Airbnb has accumulated massive losses over the past 12 years. They didn't care, as all they were interested in is marketshare and everything was always tailor made for their IPO. If that fails, they will be in deep trouble.

 

cc:  @Ann72 @Super47 @Mary419 @Anna9170 

 

Re: Airbnb's Chickens Coming Home To Roost

in
Sayulita, Mexico
Level 10

@Ute42  I don't know if Booking is administered differently in various countries or parts of the world, but I have never considered listing with them because a good friend who runs a small hostel here listed with them and not only did she get the worst quality of guests through them, she never got paid for any of the bookings. After fighting with them for 3 months, she just gave up.

Re: Airbnb's Chickens Coming Home To Roost

in
Ventenac-Cabardès, France
Level 3

@Ute42

Thank you for that info, i knew about airbnb loosing money and their reasons behind the ipo, but didn't know that booking was so big.

 

And didn't know about their profit margin... Worth investing in then... 🙂 

 

God help us, im not on booking because i believe that customers (guests are family/friends who stay IN MY HOME and don'tppay.. lol) are given the most amazing cancellation terms which i dont want to go with...

 

Im being cautious here,.. Correct me if im wrong

Join the conversation