AirBNB - One of Many Businesses That are Completely Threatened with Closure

Funny you should mention this. My son did his marketing and business thesis on the leisure and travel industry and I was reading his pestle analysis on AirBNB. Under weaknesses and threats there was mention of competition from rival start ups, budget hotel expansion and legal threats. Nowhere did it talk about a Global Pandemic which is now cutting through the business model of AirBnB like a rapier.

The still have income in the USA but even this week the Mayor of NYC was calling for AIRBNB hosting to be suspended. Its big contract with the Olympics is totally in disarray as disgruntled punters find out they cannot get 50% deposits back from their hosts in Japan unless the feel benevolent. Downsizing and severe cost cutting is their answer.
 
Surely as AirBNB is largely a commission based industry, and doesnt really own holdings of buildings, they'll just strip back all business activity and be left with staff costs etc? not like hotels or rental firms that have property portfolios bleeding them dry with forced vacancies. Makes sense that they strip back marketing activity during a time when everyone is stuck in the house. A quick google shows they had cash reserves of 3.5bn in October 2019, so would assume they would just cut their cloth accordingly until its safe to resume operations.
 
Don't really use AirBNB so dont know much about it but thought it was all to do with folks letting rooms on their homes etc. So obviously there must be more to it than that.

You either rent out a room in your home, your entire home, or a property you own, or host experiences. As a user you can either search for private room in someones home, full accommodation, or experiences (pub crawls, wine tasting, street food, bread making etc) AirBNB takes a percentage of each booking. You get all sorts on there and its very rare we book a hotel now as we find money goes a lot further on AirBNB and we've met some great local people who know where everything is and whats good, whats not good etc. You get everything from dingy rooms in 2 up 2 downs for contractors to use, down to the clock tower at Kings Cross St Pancras or log cabins with glass ceilings in Iceland. Some hotels do put listings on there, and some hotel websites have started to show airbnb listings to remain competitive.
 
Surely as AirBNB is largely a commission based industry, and doesnt really own holdings of buildings, they'll just strip back all business activity and be left with staff costs etc? not like hotels or rental firms that have property portfolios bleeding them dry with forced vacancies. Makes sense that they strip back marketing activity during a time when everyone is stuck in the house. A quick google shows they had cash reserves of 3.5bn in October 2019, so would assume they would just cut their cloth accordingly until its safe to resume operations.

Exactly, they're the worlds biggest hotel chain without actually owning any hotels. They'll be fine, especially with their VC reserves, although their IPO may have to wait for a year or so.
 
Indeed it will cost cut significantly. Yes it has massive cash reserves from investors PE although it is still a heavily loss making business and burning through cash.

it will lose thousands of hosts but it certainly has the capacity and flexibility to survive albeit at a reduced level.
 
They have to keep growing to stand any chance of getting into profit. PE Investors Have invested billions and they need an exit hence going public with an IPO. .
 
Indeed it will cost cut significantly. Yes it has massive cash reserves from investors PE although it is still a heavily loss making business and burning through cash.

Most Silicon Valley / San Francisco start up's are losing money, they focus purely on revenue growth and market share, and spend little time thinking about operational efficiencies and their cost base. Once they IPO then the shareholders suddenly force them to start thinking about making money.

It's bizarre how many household companies aren't actually making any profit.
 
Use Airbnb a lot for travelling. They’ve always been very quick to resolve and compensate for any problems which are very rare. Hope they survive.
 
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