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Will AirBnb Go Bankrupt? and When? (thehftguy.com)
28 points by user5994461 on March 23, 2020 | hide | past | favorite | 12 comments

Of course they'll live. It's wildly profitable net of R&D and silicon valley has plenty of capital to support them.

My favorite quote: "bankers give you an umbrella then take it away when it rains. VCs give you an umbrella then charge double in the rain."

> Conclusion

> AirBnb will be alright, don’t worry.

> Individual employees, not so much. Take care.

I came back here to mention exactly the same quote. The title is really misleading. The whole idea is to show AirBnb will cut jobs, the question is how many (the article mention it could be as high as 2/3).

There is a difference between revenue and transactional value! In the industry it seems that the revenue rate is ~10%. We can look at HomeAway for example - acquired by Expedia in 2015, for 3.8bn, 2014 revenues were ~$446.8m (https://en.wikipedia.org/wiki/HomeAway), for about 500 - 1k employees (can't find any data on this). https://ir.expediagroup.com/?ReleaseID=880362 does not list any information on Hotels.com generated revenues. But overall, Expedia generates ~450k/employee, and I'd expect this to be the norm, maybe higher for Hotels.com, by max 50%. The writer has no business knowledge and is generally uninformed when it comes to the requirements of managing a vastly complex company. For Airbnb, maybe 20-30% of people are working in customer support from India, and get paid $5000/year. An average is not a good indicator of a company's ability to make money

A very interesting question.

Like the title suggests, perhaps it depends how long this outbreak will last and how much longer Airbnb can afford to survive with little to no booking due to social distancing and ban on gatherings and travel. My take is that they will live [0].

[0] Only if they make internal changes to the company and do something to save themselves.

Purely from a business perspective:

Wait, this makes me wonder. Isn't it in a lot of companies their best interest to pool money together for rapid COVID-19 research? If a cure is on the table ASAP, then governments will stop implementing harmful rules.

Or is it the case that it takes too long and no matter how you slice it, businesses will lose a lot of money either way? In other words, hypothetically: it doesn't matter whether there's a cure within 6 months from now versus 2 years from now.

To quote Warren Buffet, you can't have a baby in a month by getting nine women pregnant. This will take time, no matter how much money you throw at it.

9 women can all try to have baby at the same time though

any scientific reference for that ? We might have a consistent hashing algorithm for scientific research load.

It's very hard to speed up vaccine trials. You want to know whether the vaccine has adverse side effects that show up 6 months later. There is no way you can have that information 2 weeks from now. (Unless we have some Star-Trek-level technology for simulating the effect of vaccine on a human's metabolism faster than real time, which is clearly decades if not centuries away.)

I imagine it would work like all the airlines that went bankrupt after 9/11. Painful short term, but probably not so painful long term. There's also some benefit to going bankrupt. All of your contracts, including employment contracts, can be renegotiated with all the benefit of hindsight. And for many of those contracts, AirBnB would have the upper hand.

Maybe the contrarian view but quite bullish on AirBnb (obviously not short term). This situation sucks but there is a glimmer of light which assuming the world finds a vaccine and anti-viral treatment:

1. Globally people are on lockdown and once done are going to realize that black swans can happen anytime and thus will travel more as never know when you can't. Travel will bounce back hard (business travel maybe not as much) 2. Due to loss of jobs/income: More folks will need to securitize their fix assets meaning house for additional income which means more inventory for Airbnb 3. Hotels will be devastated as due to fix cost had to pare down impairing service, locations, etc. thus net positive for Airbnb 4. Remote work will take off: Ppl will want to explore other locations as remote work becomes more prominent. They can launch an ancillary business that attacks WeWork.

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