[HN Gopher] Airbnb announces confidential submission of draft Re...
___________________________________________________________________
Airbnb announces confidential submission of draft Registration
Statement
Author : minimaxir
Score : 89 points
Date : 2020-08-19 20:40 UTC (2 hours ago)
(HTM) web link (news.airbnb.com)
(TXT) w3m dump (news.airbnb.com)
| baron_harkonnen wrote:
| Reality still hasn't hit the travel industry yet. We still
| haven't even begun to see the impact of covid on the economy
| start to unravel.
|
| Business travel is done, but this is where a huge amount of
| airline and hotel profits come from. Travel is dirt cheap right
| now because, at least in the US, airlines have to fly. They can't
| lay off employees or reduce staff until, currently, end of
| September. But once they can I suspect we'll see very different
| behavior for airlines.
|
| Beyond that we still haven't started to feel the full impact of
| all the job losses, and the people who remain employed but at
| substantially lower rates, or in more volunerable positions.
|
| The relatively young travelers that make up a lot of AirBnb's
| business, have largely not been concerned about the virus,
| certainly aren't concerned about future economic impacts and have
| mostly seen cheap flights with hotels unwilling to book so they
| head to a rental.
|
| These are travelers whose optimism is based on a decade+ of
| perpetual economic growth. Even those losing their jobs don't
| really believe that there can be a prolonged period where it's
| hard to find work.
|
| I believe that this coming Fall will bring a lot of reality to
| the forefront. I suspect leadership at AirBNB has similar
| thoughts and wants to get that IPO before the buzzer.
| karlkatzke wrote:
| > They can't lay off employees or reduce staff until,
| currently, end of September.
|
| The WARN letters for October 1 layoffs have all already gone
| out. They needed to be out before August 1st. So we'll know of
| any further layoffs with two months notice.
| thebean11 wrote:
| I think the big bucks for AirBnb in the future are in the
| medium-long term rental market, not the vacation market. The >1
| month rentals also happen to bypass most of the regulations
| they're having issues with.
| baxtr wrote:
| I'm not so sure. Look at Sweden, look at NYC. The numbers ain't
| going up again until now. There have been pandemics before,
| that's not the first one. And after the pandemic everything
| will be as before.
| AviationAtom wrote:
| Ah, yes, the classic go public to try to save the sinking ship
| move. Buy your pet rock while it's hot, people!
| DamnYuppie wrote:
| Am I the only one who is super eager for them to go public so
| that I can short them?
| zucker42 wrote:
| Why do you think AirBNB will be overvalued?
| aussiegreenie wrote:
| SV Bubble v real world is a 30% discount minimum.
| duhi88 wrote:
| Because this happens with every SV company that is often in
| the news.
| westonplatter0 wrote:
| I'm long term bullish too, but most companies don't take
| off after their IPO. I like the approach of buying the
| stock and selling calls on top of them (to also capitalize
| on high IV).
| NeutronStar wrote:
| Citation needed.
| julianlam wrote:
| My zoom stock is doing quite well, thank you very much.
|
| Pagerduty was a letdown, though.
| mancerayder wrote:
| We wrote similar comments at almost the same time. Yes and Yes.
|
| They're a pretty shady experience as a guest, so on a personal
| level I'm upset (per other comment). There's a pandemic and
| economic catastrophe, so there's a good bear argument that adds
| to the already bear argument that cities around the world are
| cracking down on AirBNB rentals because they're easy political
| targets.
| MarkMc wrote:
| I'm super eager for the opposite reason: I want to go long. In
| 3 years people's travel habits will mostly be back to normal,
| and AirBnb has a very strong competitive moat
| murgindrag wrote:
| I think they're moat is more of a wading pond. They've relied
| on user interface dark patterns and sleaziness far too much.
| They're highly political, which has alienated a lot of people
| who disagree with their politics. People who DO agree are
| also likely to dislike what Airbnb has done to rents in many
| places. Basically, a lot of people hate them.
|
| That stickiness goes away when a credible competitor steps
| in.
|
| I think if an organization like Google were to start listing
| similar listing on Maps alongside hotels, they'd be done for.
| If a competitor were to start with listings on several major
| travel websites (and easy way to do that is by taking them on
| as investors), that would also overcome any such moat.
|
| I think whether they do okay or not depends more on the
| credibility of the competition than on any moat.
| DamnYuppie wrote:
| I don't believe they have a strong competitive moat at all.
| They don't own the properties they rent, there are a myriad
| of other services that the exact same properties can list on.
| They have market/mind share but that can easily wane.
| schnable wrote:
| What's their moat?
| thebean11 wrote:
| The main one to me is network effect. Hosts will join the
| platform because there are renters there, renters will join
| because there are hosts.
| heavenlyblue wrote:
| You should also be a chef because people will never stop
| eating.
|
| This is a train that went away a long time ago. AirBNB is
| slowing down and becoming the yellow pages/TripAdvisor of
| the internet (that is very clear in terms of the
| commodification of the review process).
|
| It doesn't mean they will fail, however you can't just
| state they will grow forever.
| phatfish wrote:
| As soon as a competitor comes along that is better for
| landlords, renters or has a good marketing campaign
| people will move.
|
| The network effect is not that of Facebook where you
| would have to convince all your friends and family to
| sign up and start using a new site/app.
|
| I suppose they could just buy the competitor like
| Facebook does, assuming another large corp is not behind
| it.
| carabiner wrote:
| There's the old saying, It's Probably Overpriced. Not just tech
| stocks, not just Airbnb.
| throwaway1777 wrote:
| Good luck with that. In this market stonks only go up.
| vechagup wrote:
| It seems highly likely that you are not, and therefore that
| this trade is much less of an obvious win than you appear to
| assume.
| mancerayder wrote:
| What do you mean? If lots of people short a stock, the
| crowdedness are borrow costs, or a short squeeze if things go
| south (or should I say north).
|
| It's a see-saw here. The lower it goes the lower it will go.
| mancerayder wrote:
| Here's another bear argument: the political tide is turning
| against them.
|
| Lisbon and New York are just some of the cities that have made
| AirBNB more difficult. New York has made even a listing
| advertisement illegal if it's for a short-term (under 30 days)
| timeframe. Paris forced registrations and taxing some years back,
| which slashes the number of properties available. Politicians in
| Brooklyn constantly evoked AirBNB these past few years in
| gentrifying neighborhoods. Barcelona has had protests.
|
| In an era of affordable housing becoming an issue, someone
| profiting off of short term sublets at the expense of longer-term
| residents (who have to deal with noise issues in addition to more
| scarcity of housing) will be targeted politically. Will COVID and
| the move from the cities offset that?
| dbt00 wrote:
| Just to preempt most of the usual snarky comments --
|
| What's confidential is the contents of the filing, not the fact.
|
| All the initial S-1 filings I'm aware of are confidential. After
| amendments (S-1A filings), the resulting document can be made
| public. At this time, any details of offering are still volatile,
| and there's no reason to force companies to publish that
| information until the final offering details are solid.
| vmception wrote:
| In all of my sales I have modified the offering midstream after
| feedback from investors that jumped through hoops to see how to
| invest and balked at the numbers. All advisors I've ever had
| all completely missed the mark about what the market is
| interested in and what a good deal looks like. And then after
| modifying its published publicly and that's the only record of
| what the terms ever were. In the public's mind we never
| mispriced or raised or lowered based on demand.
|
| Confidential S-1's are perfect for that same result.
| ponker wrote:
| All of your sales? Have you founded multiple public companies
| or are you an investment banker or something?
| regulation_d wrote:
| Confidential S-1's are reasonably new (2012) and limited to
| "emerging growth" companies. But yeah, I imagine most S-1s
| discussed on HN take advantage of that provision.
|
| EDIT: ohh, that changed in 2017. Now all companies can file
| confidentially.
| tempsy wrote:
| Travel might come back but one thing I'm more confident that the
| pandemic has changed is awareness and empathy for systemic
| inequities in our society. Uber and Lyft are currently dealing
| with an existential crisis to their business model in California
| that I think will reverberate into housing eg greater empathy
| across cities on issues related to affordable housing and how
| Airbnb has crowded out would be renters and buyers for what are
| essentially illegal hotels.
|
| Also with business travel being depressed for quite some time I
| doubt many business travelers would be looking to Airbnb to get a
| deal when hotel prices will be depressed for the foreseeable
| future.
| analyst74 wrote:
| I heard that Airbnb's business is actually stronger in US and
| Europe now than pre-pandemic, as tourism shifts towards local and
| people shy away from hotels.
|
| On the other hand, they're still in money saving mode, reducing
| ad spending and laying people off.
|
| Anyone know what is going on?
| romanoderoma wrote:
| I moved back to Rome from Milan because I knew that without
| tourism (from US in particular) rents would go down
|
| I'm now in the process of choosing between 2 houses both in the
| most exclusive part of the city centre, a thing I could only
| dream of until few months ago, at the same price I was renting
| an apartment in Milan in an average neighborhood
|
| Most of the listings are former Airbnb places, you can tell
| when you visit the houses that packing up so many beds to
| maximize profit didn't pay, that level of service could only be
| acceptable by youngsters looking for a cheap place to crash
| during the two nights spent in Rome with friends, but it
| actually lowered the real value of the apartments a lot, to the
| point that many of them are corridors with the same number of
| rooms and bathrooms, but not a living room or a kitchen, hence
| impossible to live in unless you enjoy suffering.
|
| Unfortunately for them young tourists and cheap flights will
| not come back for at least a few years
|
| So now their properties are basically worthless
|
| Agencies that were managing the properties have abandoned the
| business or are selling their licenses (good luck with that!)
| and owners have to face the choice of renewing and waiting at
| least next year to start renting again or lower the prices and
| avoid more losses, but accept a long term contract which binds
| them for at least 3+2 years
|
| As I said many of them are not worth it even if the rent went
| down considerably so it's not even easy to rent in this
| economy, even owning an apartment in a super exclusive
| neighborhood rented at half the price, also considering that
| people who can afford it don't pay for shitty places full of
| sofa-beds and cheap furniture.
|
| all the listings say the same thing "NO AIRBNB, NO HOLIDAY
| RENTALS, NO AGENCIES" they only want to deal with medium-long
| term rentals with trusted people after checking their income.
|
| I'm quite sure even after covid airbnb and all the businesses
| around it won't come back, at least not in Rome, not in the
| same way, people are fed up with mass tourism and businesses
| are starting to enjoy working more with locals who actually
| live in the neighborhood, like it used to be not so long ago,
| but were forced to leave by the "tourist-pay-double-for-shit"
| craze.
|
| It happened and until it worked, it worked, but when it stopped
| it left ruins
|
| I think people have opened their eyes
|
| Airbnb will still be the preferred way to rent a van on a
| beautiful beach on a Greek island where a couple can spend few
| romantic nights, but the idea that it was going to improve the
| fabric of our old cities is dead IMO
| syshum wrote:
| Another big factor in Airbnb, like other "platforms" like this
| vs their traditional counterparts, they have no assets that
| incurr costs no matter how down the market it
|
| Hilton, Marriott, etc all still have MASSIVE amounts of
| physical property that they have to maintain year around no
| matter if they are full or empty. Airbnb has none of those
| costs.
|
| This makes them more flexible and are able to quickly respond
| to changes in the travel market, more so than their traditional
| competitors
| admax88q wrote:
| Marriott doesn't own their hotels, they lease them from third
| party owners. I would wager that Hilton is doing the same.
| heavenlyblue wrote:
| Does leasing change the fact that you still need to
| maintain the property and pay the lease?
| syshum wrote:
| I dont know about the Marriott family of brands
| specifically but I would image like most large companies in
| this sector they have a Mix of Franchisees and Direct owned
| properties.
|
| Hilton Certainly does under several of its brands.
|
| This Franchise model does not change my statement really at
| all, as it is far different model than what airbnb has
| namdnay wrote:
| Do they lease them? I got the impression that it's closer
| to a franchise model (for all major chains)
| janitor_monkey wrote:
| Actually Marriott works with a franchise model. If the
| franchisee goes bankrupt, that's a problem for Marriott...
| but it is also a problem for Airbnb (many owners of several
| properties are going bankrupt).
|
| As an anecdote, I had an Airbnb stay in Rome but the landlord
| went bankrupt due to Covid and had to close the business.
| asdff wrote:
| Depending on the city some hotels aren't doing as poorly as
| you might expect. LA has been running project roomkey during
| this pandemic, where they basically pay for a hotel or motel
| room for homeless people.
| alfalfasprout wrote:
| There aren't further layoffs, this information is inaccurate.
| davidsawyer wrote:
| Brian Chesky pretty much said exactly this in his interview
| with Guy Raz on How I Built This a week or so ago.
|
| https://www.facebook.com/watch/live/?v=594606847885635
| tempsy wrote:
| they are benefiting from rise of the "local summer getaway" but
| that's only one season of the year. what happens in the fall
| and winter? and to business travel?
| simias wrote:
| I live in a very touristic neighborhood in Lisbon and several
| of the apartments in my building are rented full time through
| AirBnB & friends and it's definitely still _a lot_ quieter than
| pre-covid, and we 're in August when there should be tourists
| everywhere.
|
| It's only one datapoint of course but from this very limited
| perspective it seems very hard for me to believe that their
| business would be stronger now than pre-covid.
|
| But hotels are probably suffering even more, that's true.
| opportune wrote:
| Personally I'd love to spend some time in Lisbon but as an
| American I'm pretty sure I (rightly) wouldn't be allowed in
| your country. So travel restrictions are probably the issue
| there
| simias wrote:
| Sure, that's part of the problem, but I think that's not a
| purely Portuguese thing. Hence why I have some difficulty
| believing that AirBnB would be thriving right now.
| hkmurakami wrote:
| organizational bloat.
| mrkramer wrote:
| Local tourism is fine but international is not. Airline travel
| is not fully functional yet.
| mancerayder wrote:
| Right. How can AirBNB be hopping with airlines down 70-80
| percent?
| nostromo wrote:
| The timing is certainly interesting...
|
| Presuming Airbnb makes it through the crisis, they're set up
| for many quarters of blistering earnings "growth" as things
| return to normal.
| mgiampapa wrote:
| The timing probably has more to do with expiring options than
| it specifically does around strength of the market or the
| business.
| mrkramer wrote:
| I think their assumption is that investors will jump on the
| stock when pandemic ends and optimism surges.
| tenebrisalietum wrote:
| IBM lawsuit
| echelon wrote:
| https://www.forbes.com/sites/washingtonbytes/2020/03/13/airb.
| ..
|
| > Thes patents at issue are used primarily in e-commerce--and
| some of them date back to the time of dial-up technologies
| such as Prodigy.
|
| Dial-up era!? Patents shouldn't last that long! This is
| centuries in technology!
|
| I think the only valid use for software patents (if there are
| any at all), is to prevent bigger players from moving into
| your space. But small companies don't have the time, energy,
| or money to wage fights in the courtroom. They have pressing
| existential issues.
|
| Companies without products are patent trolls and shouldn't be
| permitted to have them. If you "invent" yet don't do anything
| with it, what good are you to society?
|
| Ossified and decaying companies like IBM shouldn't be allowed
| to trample upstarts.
|
| It's all so backwards.
| breck wrote:
| Wow, I didn't hear about this. How sad that IBM is now a
| patent troll.
| hn_throwaway_99 wrote:
| From knowledge of the travel industry:
|
| 1. Hotels are still in the dumps.
|
| 2. Single home rentals, a la VRBO and AirBnB, are doing
| fantastic as people decamp from urban areas and work remotely.
|
| 3. Urban rentals are in the shitter.
|
| 4. Shared spaces are also in the shitter.
|
| AirBnB has a lot more urban inventory and shared spaces than
| for example VRBO (which was always more based around vacation
| destinations), but I have no idea if their split between urban
| and vacation destinations is an overall boon or hindrance for
| them.
| cco wrote:
| If urban areas are in the shitter it sure isn't reflected in
| the prices. Prices in Seattle and Portland at least are still
| as strong as they were pre-pandemic.
| thebean11 wrote:
| NYC rental prices are down easily 20%
| jacobwal wrote:
| I think you're overall on the money here, but I would
| probably be a bit more cautious on #3 (at least private
| units). Some of the managed rental providers that focus on
| urban markets seem to be doing OK. Sonder raised a new round
| in June[1], albeit after laying off part of their workforce.
|
| 1: https://shorttermrentalz.com/news/sonder-series-e-round-
| june...
| Thaxll wrote:
| I highly doubt they make more money now than before covid.
| dogma1138 wrote:
| This is at least as far as the UK goes, Brighton 2 weekend ago
| was PS430 for 2 nights for 2 people in the Mercure which is
| kinda well meh facility wise.
|
| Hotels basically are either closed for renovation or jacked up
| the prices while closing down everything that they had as an
| advantage over AB&B.
|
| The restaurant is closed, there is no room cleaning unless you
| explicitly book it a day in advance, the gym, spa and pools are
| closed and so are all other in-house attractions and services
| such as the children play areas, lounges, media rooms etc.
|
| So you have higher prices than pre-pandemic in many places due
| to them having to recoup their losses and a much much much
| worst service than usual which already in many places in Europe
| was a hit and miss outside of the large resorts and world
| renowned hotels the hotel service and overall quality in Europe
| is pretty shite.
| claydavisss wrote:
| Most robinhood traders will feast on this offering regardless of
| the fundamental challenges. Sure, Warren Buffett won't touch it,
| but who cares?
| thebean11 wrote:
| As someone who was looking into escaping the city for a bit on
| AirBnb a couple months ago, I think they might be doing better
| than many people think.
| ProfessorLayton wrote:
| I'm very curious to see what their public valuation will be, but
| at the same time the market seems to be doin its own thing, so
| perhaps's it'll do great.
|
| But all things considered, it's pretty clear that everything is
| too volatile right now, but AirBnB is being pressured to IPO
| anyway. If the market doesn't have an appetite for travel, I
| foresee a lot of recent AirBnB hires taking a huge haircut on
| their total comp.
| [deleted]
| mancerayder wrote:
| I'm upset, after using the platform for a decade, that they
| remove negative reviews of properties. I learned this recently.
| That included some of my very tame and reasonable reviews.
|
| Makes me want to short the stock when it IPOs, after its initial
| run-up out of vengeance.
| miketery wrote:
| You shouldn't short a stock on the basis of you not liking it
| or based on X bad business practices. You should only short it
| if you believe that the market will perceive it as over valued,
| and the valuation will go down. That's it.
| DamnYuppie wrote:
| If there is enough people who do or don't like something that
| can drive large swings in a stocks price regardless the
| fundamentals. A few very recent examples would be TSLA and
| BYND.
| jacksparrow11 wrote:
| The market can remain irrational far longer than one's ability
| to remain liquid :-)
| [deleted]
| fourstar wrote:
| Short the company -- not the stock. 1. Don't buy the stock. 2.
| Don't use the platform. 3. Tell others to do the same.
| subsubzero wrote:
| Also, for places you do like, alot of them can be booked
| without airbnb and they will charge you less as they are not
| being gouged 30% by airbnb. I always grab business
| cards/contact info for places I stay at that I really like on
| airbnb and if I plan on going back I skirt airbnb and deal
| directly with the houses owner/manager. More money to the
| owner, less to airbnb and cheaper for you, win all the way
| around.
| anm89 wrote:
| I don't really like Airbnb as a company but they are the only
| one out of the marketplace based unicorns who's unit economics
| seem really solid to me. I personally would not be against
| them.
| mancerayder wrote:
| Even in the world of COVID and restricted air travel?
|
| I mean there are lots of city people escaping .. but how
| likely will that continue as cabins and beachhomes become too
| cold.
| eof wrote:
| Do you expect this to last for years/decades? I think it's
| fair to say that the current climate is priced in.
| mancerayder wrote:
| Priced into what? Stock prices?
|
| Branson had to dig into his purses to bail out Virgin
| recently. Layoffs are periodically occurring in the air
| travel world. No one knows precisely when it ends.
|
| What does "priced in" mean? Some sort of perfect market
| pricing thesis manifesting or am I reading into it?
| fossuser wrote:
| Arguably AirBnB becomes the only safe travel option when
| compared to hotels.
|
| Though neither survive a complete travel collapse.
| benatkin wrote:
| That's bad, because your life can be in the hands of your
| AirBnb host. https://medium.com/matter/living-and-dying-on-
| airbnb-6bff8d6... https://www.huffpost.com/entry/a-death-at-an-
| airbnb-rental-p...
|
| There are going to be legitimate reasons for removing a review
| like bad writing, personal information, or foul language, but
| the net effect is making the listing appear better than it is,
| and that doesn't sit well with me.
| mancerayder wrote:
| There's a subreddit where the hosts tell each other how to
| remove reviews (the main airbnb one). One hint is any mention
| of location. Other than that, anything you can prove
| inaccurate is grounds for Airbnb to support the host and do
| that for them.
|
| I used to have 5 star experiences and my last few were pretty
| negative, ranging from disgusting, to bad locations (not
| allowed to criticize location in reviews so you'll never
| know), to a toilet which required pushing things with brush.
| And more expensive than hotels.
| asdff wrote:
| Another dark pattern is hiding the price until you are nearly
| booking the place. Most people want a cheap stay close to where
| they need to be, so they look on the prices on the map, which
| fail to include fees which can be all over the place depending
| on the host.
| subsubzero wrote:
| And the fees can be extreme. I recently tried to book a place
| before covid and the cleaning fees etc ended up being $400. I
| feel like this is a scheme landlords on airbnb are
| perpetrating which are similar to what used to go down on
| ebay years ago.
|
| For ebay they did not take a cut of the shipping
| cost(typically their cut was around 10% of the final sale of
| an item) so sellers would list items at rock bottom prices
| but with shipping like 5x of what it should be so they could
| receive a maximum amount of money. I assume airbnb does not
| take a cut of cleaning costs?
| rvz wrote:
| You know, the moment the pandemic hit, the layoffs at Uber and
| Lyft came and the recent disappointing earnings and the worker
| classification ruling, it was just screaming "short me".
|
| Lyft in particular offered some deranged predictions thinking
| this sort of market is sustainable and reaching "profitablity
| in 2021". This was them last year [0], this was them four
| months ago [1], and this is them now [2]. They seem to have
| used a malfunctioned crystal ball for that prediction.
|
| Airbnb seems like they are now escaping for an IPO, but I'd
| rather short the stock until it reaches below its IPO price.
| This virus is not going away any time soon.
|
| [0] https://news.ycombinator.com/item?id=21328871
|
| [1] https://news.ycombinator.com/item?id=23020812
|
| [2] https://news.ycombinator.com/item?id=24114206
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