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My thoughts on Airbnb as a host of a few properties. I’m very bullish on the company and am planning to invest in the stock assuming the valuation isn’t out of control. Laying out the bull and bear case below:
Airbnb has successfully aggregated demand for “rent someone else’s home that has the potential for being an interesting experience.”
Short term rentals are an emerging asset class and Airbnb effectively charges a 20% take rate on the market. They are the market leader and “Kleenex” level brand association.
Airbnb let’s homes differentiate their properties through design and experience, while competitors try to commoditize each property. Booking .com for example doesn’t even let you write a description of the property.
Airbnb hosting is kind of like a Pinterest-inspired gambling game. What optimal amount of throw pillows and knobby rugs drives revenue growth?
The bear case on Airbnb is that customer service is such a large and complex endeavor that over time their margins could look more like service company.
The regulatory environment is negative toward short term rentals and only goes in one direction (more negative). I don’t think Airbnb ever runs out of potential homes, but this dynamic doesn’t help.
Also, I’d say that overtime their hosting community has gone from “extremely loyal” to “I will leave the platform the first possibility i can.” Every host kind of sees the writing on the wall that platform fees and onerous terms will continue to creep up.
I’d say the biggest potential competitor to Airbnb is Instagram. Same aesthetic and it’s the picture that sells the property. cc @mosseri
I’m also a big fan of Vrbo, though they fill the niche more of a “house for a family or group to stay.” My experience with Booking. com so far has been limited (but negative). cc @modestproposal1
Overall, I love Airbnb as a host and as a traveler. As traveler, it’s amazing (stay at a unique home with a kitchen ). As a host, it’s a really fun way to monetize interior design and architecture. It’s a combination of analytics and aesthetics and I find really satisfying.
Okay, that's all my thoughts for now on Airbnb. cc @paulg @JonDishotsky @dkimerling @mwseibel as folks who have been kind enough to chat with me about this.
A few more thoughts. First, the the Airbnb review system is extremely stressful for hosts. One bad review from a guest can really torpedo your listing. A system that's "median" based rather an based on average rating would do a lot to fix this.
Also, the extreme regulation of short term rentals creates some opportunity for hosts who play by the rules, with a similar dynamic that @moseskagan highlights here. Permitting limits supply. shttps://twitter.com/moseskagan/status/1328708840225869832
