
Airbnb Enters the Land of Profitability - taylorbuley
https://www.bloomberg.com/news/articles/2017-01-26/airbnb-enters-the-land-of-profitability
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nikanj
I have noticed their new profit-oriented approach on two different trips. In
the past, host cancelling on you last-minute meant a nice hotel comped by
airbnb. Now it means you get to pay the premium for last-minute hotel booking,
and airbnb /might/ throw $50 towards your next reservation.

On our Midamericon trip, we booked airbnb about 4 months early, when the total
cost about $100 less than a hotel. The host cancelled the week we were flying
in, meanwhile the hotel prices had shot from $85/night to $225/night as the
law of supply and demand worked it's magic on the convention town.

~~~
rorykoehler
That's why I look at booking.com first now. On Booking.com the apartments are
run by professionals who don't flake out on you at the last moment. Airbnb has
also brought competition to market driving down prices and often, in places
like Amsterdam, much better value can be found on Booking.com these days.

~~~
philfrasty
I have made roughly 100 bookings through AirBnB with ZERO cancellations from
the host. Funny enough my best friend booked a hotel on the Galapagos islands
through booking.com and got a cancellation email while on the boat to get
there....talk about other options in that situation...

~~~
atticusfinch
This is where the Booking.com customer service shines. They have always gone
above and beyond when I've had any issues.

~~~
hyencomper
True. I booked a stay in Rio a couple months in advance, which was cancelled a
week after booking. Hotel prices had risen by then, so Booking.com actually
provided free stay at a different hotel.

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padobson
_Revenue at Airbnb increased more than 80 percent during 2016, said one of the
people close to the company, even as cities like San Francisco and New York
passed laws that would enforce limits on the number of nights hosts can list
their properties._

I suspect this has as much to do with mass adoption as anything else. My wife
runs four Airbnb units in Warren, Ohio and 2016 was a record year. We've been
on Airbnb since 2013, but we really started seeing a change in the type and
frequency of booking requests last year.

In the beginning, it was all 20-somethings traveling from big cities and
staying a night or two. Last year, it was a much more diverse, more price-
insensitive group.

~~~
chx
I am 42 and what I find great with Airbnbs is the place selection. There are
so many of them even at places where hotels are rare, nonexistent or
exorbitantly priced. Bellevue, WA and Florence, Italy are two places where I
appear at least yearly and always Airbnb.

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yardie
2 times we were cancelled on and in neither cases did Airbnb help us find
accommodations. These were last minute cancellations where rebooking on airbnb
was impossible.

I liked the idea of the individual sticking it to the man but experience has
shown me that people are flakey as hell. A computerized hotel booking will
rarely leave you stranded in a sidewalk cafe with your young son.

~~~
jzwinck
My experience has been rather the contrary. A couple times when bicycle
touring I got to some town only to discover it was "X Festival Week" and the
town tourist office could not find a single place to sleep. AirBnB still had
places.

My family has had the experience of showing up at a hotel with an advance
booking and being turned away because they were full (oops!).

~~~
yardie
With computerized booking in not sure if that happens a lot. Unless the agent
didn't know what they were doing and entered the booking incorrectly a
cancelled advanced booking should never happen.

I've also found the larger hotels will keep a few rooms in reserve, just in
case there are problems i.e. leaks.

~~~
monort
Some (most?) hotels do overbooking, just like airlines.

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shaqbert
Anyone surprised that they'd eventually be profitable? Being the largest
hospitality company in the world without holding any assets ... how could
anybody ever have been doubting in the first place.

The real question is rather if they are leaving growth opportunities behind if
they are profitable too early. Still a lot of lobbying to be done.

~~~
nnd
Most of the largest brands in hospitality don't own their assets either, and
operate a franchise instead.

~~~
edblarney
Even the one's that don't operate as franchises still don't own the
properties.

Most of Four Seasons, Fairmont etc. - the actual properties are owned by
sovereign wealth funds etc. - think Saudis who need to park huge reams of cash
somewhere and sit on it.

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simula67
> it will maintain profitability in 2017 _before interest, taxes and
> amortization_

Because those aren't _real_ expenses ?

~~~
jasode
[B]efore [I]nterest, [T]axes and [A]mortization is a substring of EBITA:
[https://en.wikipedia.org/wiki/Earnings_before_interest,_taxe...](https://en.wikipedia.org/wiki/Earnings_before_interest,_taxes,_and_amortization)

It's an accounting phrase describing one measure of operating cashflow. Since
the Bloomberg story is intended for non-accountants, they decided to spell out
each word instead of using the acronym.

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ry4n413
Are they public yet? (spoiler alert: I know they aren't and this is a typical
marketing scheme for private companies pre-ipo. Now, long-term say 10 years
will the company be able to quint-tuple in size? I don't dunno. I'm sure all
the companies issuing research as part of the IPO process will say so.)

~~~
edblarney
It's fair to be cynical in the Valley, but crossing the threshold into
profitability is definitely an objectively important watershed that I don't
think is hype or propaganda.

Surely it's all part of their 'IPO campaign' but that doesn't make it invalid
or irrelevant information.

If they can fill their PR campaign with decent, factual 'un-hypey'
information, well, then that's really good for them.

~~~
ry4n413
"If they can fill their PR campaign with decent, factual 'un-hypey'
information, well, then that's really good for them."

Totally agree.

