
Airbnb Announces Intention to Become a Publicly-Traded Company During 2020 - tempsy
https://press.airbnb.com/airbnb-announces-intention-to-become-a-publicly-traded-company-during-2020/
======
baby
I really really love Airbnb, and I've mostly stayed at Airbnb and ignored
hotel in the last 5 years perhaps. I now find hotels dirty, impersonal, and a
chore to stay at to be honest.

Now, I've become increasingly irritated by Airbnb's pricing tactics. They are
blatantly lying to you when it comes to how much you're going to pay.

I have two recent examples if you are not used to booking Airbnb:

* 99$/night room end up being 159$ for a night [1]

* 150$/night room end up being 500$ for two nights [2]

And these are not exceptions, but pretty much the norm nowadays. The final
prices are ALWAYS way higher than what you would expect.

[1]:
[https://twitter.com/cryptodavidw/status/1173775045606301696](https://twitter.com/cryptodavidw/status/1173775045606301696)

[2]:
[https://twitter.com/cryptodavidw/status/1159574818661867520](https://twitter.com/cryptodavidw/status/1159574818661867520)

~~~
avar
AirBnB clearly uses low room rates and high service fees to pull you in, but
there's a legitimate reason to display it like that.

The cleaning fee is fixed. So maybe you start out thinking you'll stay 5 days,
but end up staying 10. If they showed "all inclusive" rates you'd have
confusion in the other direction. What you thought was the cheap hotel
suddenly isn't because the cleaning fee for the two is very different.

Similarly, it's important to display the local taxes separately, because some
customers may be e.g. entitled to a rebate for that part (some localities e.g.
only charge foreigners).

~~~
earthshot
The legitimate reason is that momentum causes even frustrated and annoyed
people to finish most transactions even after they realize that AirBNB has
tricked them about the price. Let's not pretend there's something nobler then
that.

The whole travel industry is chock full of this bullshit where vendors hide
the full price (taxes, resort fees, etc.). It sucks.

~~~
systematical
Working for an OTA for the last 5 years I can confirm this. Also, stay away
from travel insurance, cancellation protection, or whatever else they call it.
It's a scam.

And yes, as a previous user stated, it's very easy for us developers to
include the fees and taxes in the average rate display. Fees are either fixed
dollar amounts or a percentage of the room charge. It's trivial to add this
into the average rate per night. Our corporate overlords instruct/force us not
to.

Furthermore, my advice is to avoid the major OTAs such as Expedia. First, they
engage in price-fixing. Hotels are not allowed to display prices cheaper than
they appear in Expedia, otherwise they are threatened with delisting. Expedia
calls this their "rate parity" policy. They should be taken to court by the
DOJ. Second, they take a massive percentage from hotels as commission. Use
Expedia to find availability, but then go direct to the hotel. Also, because
hotels know they are getting absolutely FUCKED by Expedia. They will not put
inventory on Expedia during peak seasons. They know they can get max occupancy
without being charged a 30% by Expedia. Ski resort hotels are a prime example,
but there are several other cases. In short fuck Expedia and probably AirBnB
too.

Just google "expedia price fixing" and the list goes on, here is the most
recent one:
[https://www.claimsjournal.com/news/national/2019/05/09/29082...](https://www.claimsjournal.com/news/national/2019/05/09/290827.htm)

~~~
avar
I work for another OTA, opinions are my own.

Rate parity isn't price fixing, and it's been going on for decades (pre-dates
the Internet). The DOJ and EU regulators know about it.

The hotel can price rooms however they want, they then enter into a
_voluntary_ contract with an OTA to give them a percent.

If hotels could just consistently give consumers OTA prices minus that
percentage directly customers would get savvy to that, and the legitimate
service an OTA provides wouldn't be paid for.

It would just lead to shadier forms of advertising for the same service, like
the OTA obscuring the name, location etc. of the hotel.

Maybe that'll happen, and maybe we'll be better off as a society. It'll impact
a _lot_ more than just OTA's, e.g. Google Adwords displaying a product for
$100 when part of that margin is being given to Google.

> Second, they take a massive percentage from hotels as commission. Use
> Expedia to find availability, but then go direct to the hotel[...]

30% is very high, but if the hotel is voluntarily paying a 30% rate on
advertisement that's how much it's worth to them.

Whether that's "fair" or not it's generally a bad deal for the consumer to
book directly at the same rate, if something goes sideways they don't have the
OTA's bargaining power to help them out.

> They will not put inventory on Expedia during peak seasons.

Good for them, but it seems 30% is worth it in the off-season if they go out
of their way to sign-up to pay that.

> In short fuck Expedia and probably AirBnB too.

A hotel that's willing to pay Expedia 30% on X for ads isn't going to be
better off with no X at all, which unless they're idiots is the alternative.

You're basically saying "fuck advertisement". Sellers stand to gain from
advertising their services to buyers, that's why advertising exists.

~~~
systematical
"Voluntary" give me a break. Do you actually believe what you're typing? If
so, that is an impressive spell you've placed yourself under. The large OTAs
have such a large share of the market that there is nothing voluntary about
using them. It's list your hotel with us or go out of business. And when you
have that clout, you can then say, and don't try listing prices on your
website that are lower than ours or we will de-list you.

Explain how that is not price-fixing at worst, and not shady at best?

~~~
avar
I didn't mean to ignore this, I just wasn't following the thread, and perhaps
you won't see this reply.

I'm not maintaining that the current status quo is optimal, just that it's
more complex than what people traditionally think of as price fixing, which
e.g. would be all the gas stations in your area deciding to charge you the
same for gas via explicit collusion.

Speaking more generally, the travel industry as a whole has always and
probably always will spend a relatively large amount of advertising of some
sort. Most of the industry is hoping to lure travelers with no local knowledge
to their properties or services, and they're competing with other local
properties.

Before OTAs hotels might expect to pay this advertising fee to travel
agencies, or to pay to be part of a hotel chain as a guaranteed source of
customers.

The unstated desire of people opposed to rate parity is to somehow have their
cake and eat it too.

After all, if almost nobody looked at these OTA websites why care about it?
It's not going to have much of a financial impact.

But they do care, because OTA's are a major source of revenue. And why is
that? Because people get a lot of value from those sorts of market
intermediaries, not just in the accommodation business, but in the form of
major chain stores, Amazon, eBay etc. It's easier to compare products when you
have a standardized comparison run by an intermediary.

As far as I can tell the scenario hotels hoping for the end of rate parity
want is one where consumers might browse OTA websites, but be savvy enough to
just visit the hotel's website directly to make a booking.

I don't see how that's going to be sustainable, you'd essentially have
advertising with a free rider problem. Ending it wouldn't be the end of the
world, but I don't see how we wouldn't just end up in some new equilibrium
where accommodations wouldn't just pay a similar amount of money for
advertising via some other means.

It's not like browsing organic Google results for hotels is some arcane
wizardry, or visiting a town's listing of hotels (which the hotels generally
don't pay for or get at really good rates) isn't known to people.

~~~
systematical
Yes these lingering discussions tend to get buried. I'm actually surprised you
responded given the nature of HN. I'm surprised I decided to check my comment
history as well.

We disagree. I view rate parity as a form of price-fixing. I don't doubt the
value OTAs provide to the consumer, but their value isn't sufficient enough to
stand on its own without price fixing. Expedia knows this, and therefor uses
its market position to fix prices and thus maintain is position. When
challenged, which it has been numerous times, its legal team has been
effective in arguing their point. I can't deny that. Perhaps my view is overly
simplistic. I view someone telling me, if you want to sell your product on my
site you have to sell it for the same price everywhere as price-fixing. Yes,
its voluntary, but in practical terms its not because the hotel cannot survive
without the OTAs. I won't weep too many tears, because the hotels could use
their sufficient capital to address the problem. But, lets at least call a
spade a spade here. If it looks, walks, and quacks. Well...

You brought up Amazon as an example of market indermediaries, otherwise known
as middlemen. Are they engaging in price-fixing? What about ebay, are they
engaging in price fixing? I'm actually interested if we can find a similar
example to what OTAs do in another industry. I don't think we can.

------
rainyMammoth
I used to only use Airbnbs a couple years ago.

Lately the service really became horrible: Last minute cancellation, soulless
places run like an industry. prices on the same level or even more expensive
than hotels. Customer support is also completely unresponsive.

I'm now going back to hotels 90% of the times where I can expect a consistent
quality of services.

They grew too fast and got arrogant in the process. I hope they quietly go
away and get replaced by a company that does this correctly. I heard only good
things about HomeAway lately

~~~
tempsy
Another really annoying thing about the app is that they’ve seemingly
increased the number of clicks/steps to complete a simple search for a place
because they’re heavily pushing “experiences.” Very irritating

------
401kguy
Something I've long wondered about in Airbnb's communication platform and
guarding their earnings: When a host answers a customer and attempts to put a
phone number, an email address, a URL, the word "craigslist", or spelling out
a number like three six seven..., it gets replaced by "(HIDDEN FOR YOUR
PROTECTION)".

The frustration at that point leads one to suspect that it's actually hidden
to prevent anything that could lead to transactions outside of the platform,
where Airbnb would be unable to take their cut.

If there does turn out to be a means to establish contact, and a rental then
happens outside of Airbnb's systems, do the terms of service actually restrict
this? It just seems strange to me at the outset. As far as I know Amazon
sellers aren't prohibited from also selling off-Amazon, but maybe housing and
other industries have some conventions that are comparable?

~~~
throwairway123
I used to work at Airbnb.

While certainly it’s in Airbnb’s financial interests to keep transactions on
platform, I saw a great deal of cases where fraudulent hosts (with fake
listings) were encouraging folks to make off platform payments. Of course the
first thing most guests do in those cases is complain to Airbnb and demand
their money back — as if Airbnb had taken their money. Putting some friction
helps Airbnb say, “We’re sorry that happened, but that’s not our problem.”

------
sudo-i
I announce my intention that I will announce my intention in 2020.

~~~
tempsy
On the surface, I agree this is a strange PR tactic that hasn't been followed
by any private company I can think of recently .

I think it's entirely possible that they are doing this because they expect to
have to deal with whatever legal/regulatory issues they face around the world
that have been in a grey area since they started and this is basically an
invitation to regulators to do something now so that regulatory risks won't be
perceived to be this massive red flag to investors as they shop the IPO
around.

I'd for sure argue that regulation is Airbnb's greatest existential threat,
especially at a time when we're all acutely aware of how expensive housing has
become in urban centers where Airbnb makes most of their money.

~~~
mcintyre1994
Gitlab also have stated when they'll go public - on Wednesday, November 18,
2020. [https://about.gitlab.com/handbook/being-a-public-
company/](https://about.gitlab.com/handbook/being-a-public-company/)

------
FreeHugs
I am a big time traveler. When AirBnB appeared on the scene, it was a life
changing event for me. So much better then hotels.

Since then, AirBnB have not added anything that benefits me. But booking.com
have catched up massively. To the point that I prefer booking.com again these
days. I would have _never_ expected that to happen.

Some of my pet peeves with AirBnB:

AirBnB's reviews are not chronological. So you have to read them _all_ to make
sure you do not miss recent complaints.

AirBnB does not show the exact location of the apartments.

AirBnB sometimes removes negative reviews for no good reason.

AirBnB lets hosts get away with removing their listing (due to negative
reviews) and relist them with a clean slate.

I really hope AirBnB will stay strong. A healthy competition between them and
booking.com is probably best for travelers.

By the way, anybody here using something other then AirBnB or booking.com?
Would love to hear if there are other good options to consider.

~~~
oftenwrong
How many of these pet peeves are held by the average AirBnB user?

I would guess "none". These are the kinds of complaints that "power users"
have because they use websites like tools. Average users don't. My mother
would look at the first three reviews and consider that in-depth research. The
next time she uses AirBnB, she won't notice re-listings, or removed reviews.

In short, I don't think these kinds of issues are going to hurt their
business.

~~~
question_away
It didn't seem like the OP was making any kind of claim about those pet peeves
being held by an average AirBnB user. In any case, it seems like a bold
strategy to fight anecdata with anecdata. To that end, it doesn't look like
booking.com has had any noticeable difference in google trends relative to
AirBnB.

[1]
[https://trends.google.com/trends/explore?date=today%205-y&ge...](https://trends.google.com/trends/explore?date=today%205-y&geo=US&q=booking.com,airbnb)

~~~
oftenwrong
>It didn't seem like the OP was making any kind of claim about those pet
peeves being held by an average AirBnB user.

Definitely not. They made valid points and I was sharing some thoughts of my
own.

>In any case, it seems like a bold strategy to fight anecdata with anecdata.

I don't have evidence as strong as anecdata. I am making assumptions.

------
SilasX
I think 2020 misses the window to strike when the IPO market is bubbly. Lyft
and Uber timed it just right -- and those won't be the only four-letter words
their investors will be screaming!

~~~
kochikame
Except both the the Lyft and Uber IPOs have been relative flops... not sure
how that can be considered "timing it just right"?

~~~
goatinaboat
Right for the VCs, not for retail investors

------
pastor_elm
What exactly is the roadmap for Airbnb? They stays feature seems to have maxed
out in listings and declining now that random people are trying to manage 15+
listings in many cities. I often see the same listings on Booking for cheaper
too.

All the other features I don't even look at because I'm not interested in an
'adventure' given by some random guy with no professional experience.

Honestly surprised they haven't expanded at all within the stays experience.

PASS

~~~
alephnan
> random people are trying to manage 15+ listings in many cities.

They're just normal professional hotels / hostels / BNB now

> 'adventure' given by some random guy with no professional experience.

The tour I went on was with actual professionals

Point being, Airbnb may be same feature wise, but the offerings have become
more professional, which for me personally defeats the purpose of Airbnb.

~~~
SenHeng
Airbnb has the benefit of a much better UI and UX compared to several over
hotel aggregators like booking.com or expedia, or even domestic ones here in
Japan like rakuten or jalan.

The only thing that annoys me the Airbnb booking experience, is that it's not
really a booking, it's putting in a booking request and then waiting for the
owners to approve. Compared to regular hotels.

~~~
random42
> Airbnb has the benefit of a much better UI and UX compared to several over
> hotel aggregators like booking.com

While AirBnB might be pleasing on the eyes, Booking's UI is optimised for
conversion. The benefit of "better UI and UX" is arguable here if it does not
result in more $ for the business. Specially if they want to compete in the
public market.

Disclaimer - Ex-Booking.com employee

~~~
puranjay
I genuinely like Booking.com's interface. I've learned to read the dark
patterns so I don't get forced into a bad deal. But once you go past that,
they offer all the information you actually need to make a decision

~~~
jfk13
The fact that you feel the need to mention that "I've learned to read the dark
patterns" speaks volumes about booking.com. And not in a positive sense.

~~~
puranjay
It gets the job done. But maybe that's not the UX itself but Booking.com's
usual "no payment, free cancellation" deals. I often just find a hotel that
looks okay and book it straight away. I check out the reviews later and cancel
if something doesn't look right.

------
2rsf
Having more than one kids gives Airbnb an edge over most hotels in the price
per person category.

The normal pricing range in hotels is 2 beds are normally priced (a small kids
is optionally included) but anything more than that requires more rooms or a
suite.

At Airbnb the price per person becomes much more reasonable, and that's before
the ability to find the kids something to do since most places have TVs, a
streamer and some game stuff.

------
systematical
I was heavy Airbnb, I'm now 50/50\. If traveling solo I prefer hostels, they
are cheaper and I get to meet people from all walks of life. Some of the best
experiences of my life have come from being in a hostel. I once nabbed a cheap
ticket to Tomorrow Land while at a hostel in Belgium, the person's friend
couldn't make it. That's just one of many.

------
ETHisso2017
I generally read this as a recruiting tactic. "Don't worry, our stock will be
liquid soon, we promise"

------
OedipusRex
Why all the recent IPOs?

~~~
mbesto
1) Impending recession

2) Not enough IPOs so lots of investor interest to deploy capital into
_something_ ( (thus driving up the price, making it more attractive for
startups)

3) We're near the end of a 7~10 year cycle where lots of private VC capital
was deployed and needs to be returned

4) 500 private investor maximum SEC rule

~~~
theflyinghorse
Could you elaborate a bit on the cycle part. Why is it a cycle at all assuming
money gets invested all the time instead of once-a-x-years?

~~~
mdorazio
Simplifying a lot, but...

VC companies themselves raise money from investors to create a fund, which is
then used to invest in startups. Generally, funds are raised with a specific
timeline pitch for returns to the investors - often 7-10 years. In order to
return money to investors, the investments in the fund have to actually pay
money back to the VC firm - the best way to do this is via IPO (although
acquisition is also an option).

Due to overall market conditions, a glut of investment happened in the VC
space 7-8 years ago (i.e. a bunch of funds were started), and those funds now
need to get money back to the investors to prove a nice ROI, so there's a push
to get the startups that were funded by the fund to exit one way or another.

------
bane
We've been using AirBnB's for maybe 95% of our vacation stays since 2016. I
think many of the comments here are spot on w/r to weird fees and semi-pro
"hoteliers" with multiple properties and so on. Some thoughts from staying at
a few dozen different places all over the world:

\- The quality of places we've gotten in the U.S. has in general been lower
and not entirely matching the description. With a couple exceptions, the U.S.
AirBnB's have definitely been...not great. But we feel pressured to leave good
reviews so that the host leaves us good counter review so that other hosts
will make sure to book us.

\- Outside of the U.S., the experience has been almost universally great.
Better on average than hotels for the same price. Bigger, better locations,
better prices, and so on.

\- We've definitely moved from "spare room" to "entire place" and been much
happier and less awkward feeling for everybody involved. However, some of the
more memorably places have been meeting people in the places we stay.

\- Some of the nicest places we've stayed were flats in Europe where the owner
has taken a job in some other country and rents their place out on AirBnB.
There was a particularly fantastic 6 days in Vienna in a two bedroom flat with
a full kitchen, clothes washer, free parking, and a fully furnished living
room, a 5 minute walk from the tram and a short 15 minute ride to the city
center under $65 a night...absolutely insane.

\- We've definitely stayed at places where we were instructed to say "we're
friends of so and so". It felt weird, but we've never had a problem and we try
to be particularly quiet and respectful of the community we're staying in.
Still, it needs to be worked out and I can definitely see the side of other
people who live in the building not liking it.

\- I'm aware that AirBnB is not helping anybody's housing costs. On the flip
side it definitely seems to be revitalizing some other housing markets in
interesting neighborhoods. One enterprising place we stayed in Budapest was
slowly being bought, renovated and flipped a flat at a time and some locals
mentioned that the neighborhood has gone from run down to revitalized with all
the new foot traffic coming from a couple buildings that were going through
the same strategy.

\- I think Japan is the closest to regulating it correctly. They've basically
said, "if you want to run an AirBnB, it's fine, but you are now a limited use
hotel." Of the half dozen places we've stayed in Japan, every single one
followed the new law 100% and it wasn't a huge fuss. It honestly made it more
comfortable to stay in since we didn't feel like usurpers as much. Bonus,
every place we stayed in was also correctly outfitted with emergency exit
signs and other "hotel safety things" like fire extinguishers and so on. They
can only rent out their apartments for so many days-per-year which also helps
with some of the property speculation bits I think.

\- We've stayed at a couple places in economically depressed communities and
it was very clear that the AirBnB was a very unique economic opportunity for
the owners that was bringing in much needed income that they really didn't
have access to in any other way. Very memorable, positive, stays in those
cases because we felt we were doing a little bit of good.

------
michalu
As Airbnb is getting banned across cities in Europe and locals are beginning
to hate on it + staled growth it's about the time to hand the equity over to
public investors and cash out.

I'm not very bullish on Airbnb, I used to practically live in Airbnb for over
3 years, but for the last 2 years I haven't even logged in and been only using
booking.com.

I remember years back in London an Airbnb host that wasn't even the owner of
the apartment but a tenant herself told me while moving in "tell everyone
you're a friend, it's not allowed in this building but everyone's doing it"

Now landlords and building owners are catching up and most new developments
are forbidding this contractually, while others do what they can to prevent
their neighbours from letting to strangers.

I'm probably missing something, but I think the company is going down and
they're pulling an exit scam.

~~~
fbonetti
> I'm probably missing something, but I think the company is going down and
> they're pulling an exit scam.

AirBnB is doing fine. They've posted healthy profits for the past few years,
which is more than can be said of nearly every other tech/startup company that
has announced an IPO recently (Uber, Lyft, Pelaton, WeWork, Cloudflare, Slack,
Postmates, and Pinterest are all unprofitable).

~~~
bduerst
Revenue is a better thermometer than profits here, especially since most
startups leading up to an IPO manipulate their profits into looking great.

It seems the regulatory product lifecycle is that AirBnB enters a new market,
and then some time later that market starts to regulate and restrict it. How
many new markets does AirBnB have left to exploit regulation?

~~~
pmart123
That’s not actually true. A certain real estate leasing firm could give away
the first year on a three year commitment to book the revenue at a very high
COGS, allowing for unsustainable revenue growth. The internet 1.0 had many
great examples of this.

~~~
bduerst
True, but I didn't mean to say revenue was completely immune to the same
manipulation - Microsoft was notorious for deferring windows revenue to show
QoQ growth stability in the 90's, like you're eluding to. Still, there are
fewer levers to manipulate revenue than profits, and I'd have more faith in
that for AirBnB than profits.

~~~
pmart123
Well, I think in We's case, they are pulling revenue which should be deferred
forward, but like the Dotcom companies, you can also grow revenue by selling
$2 for $1, which shows up when your losses are growing more/close to your
revenue growth.

As you mentioned, net income can easily be massaged, adjusted EBITDA, etc.
Cash flow is harder to fake. Airbnb should have decent to good unit economics
though.

------
Havoc
2020...ouch. Good luck on that roll of the dice

------
perseusprime11
They want to get ahead of the negative news and avoid We work debacle.
Unfortunately, 2020 is not a great year for IPOs with the impending recession.

~~~
goatinaboat
Not so much recession but the window in which non-tech companies can
“techwash” for IPOs is rapidly closing if the WeWork fiasco hasn’t slammed it
shut already

------
leggomuhgreggo
It'd be cool if they didn't capitulate to participating in the ethnic
cleansing of Palestinians

[https://cloverly.com/blog/the-man-who-linked-co-to-
climate-c...](https://cloverly.com/blog/the-man-who-linked-co-to-climate-
change/)

~~~
buildzr
Wrong link?

------
Tiktaalik
Seems like a good time to cash out. I don't know where the growth is going to
come from at this point.

Major cities have recognized the negative externalities that Airbnb has on
rental vacancy and land values, and are starting to add on regulations of
various strength. That will drag on growth.

The company gained its valuation from days past when people were buying new
condos exclusively to rent 100% of the time on Airbnb, and cities are banning
that sort of behaviour.

~~~
alephnan
What are the negative externalities?

~~~
Tiktaalik
Leakage of new supply to people who run new apartments as permanent Airbnbs
instead of renting them out to locals.

This also distorts the underlying value of the land, since you can make more
money renting out on Airbnb than you can renting long term.

------
tracer4201
Tangential to the topic, but does AirBnB operate under any regulations? When I
was in Seattle, my apartment building ended up adding an explicit clause in
the lease saying you couldn’t rent a property and turn it around into an
AirBnB or any kind of room share for temporary or short term stays.

The legal framework wasn’t there (this is 2016 I’m describing), and so I
wonder why go public now. Get a more solid footing and then lobby for
regulation to drown out other start ups?

~~~
dannyw
Pretty much every county I stayed in the US taxed Airbnb, somewhat
substantially and possibly even above the prevailing rates for hotels.

There are counties who derive 1/3 of their revenues from Airbnb taxes.
Probably won't be banning them.

~~~
The_rationalist
Wut, 1/3 seems extremely Hyperbolic, isn't it? Otherwise I agree

~~~
Eric_WVGG
There are many towns in the Rocky Mountains whose populations are around 600
people and whose primary industry is tourism. 1/3 doesn't sound high for
places like that at all.

[https://www.outsideonline.com/2198726/did-airbnb-kill-
mounta...](https://www.outsideonline.com/2198726/did-airbnb-kill-mountain-
town)

