Airbnb S-1

A few random observations I found interesting:<p>- Looks like they are significantly leaner now as a result of COVID. Cost of revenue is at an all-time low in Q3 (17% of revenue on p164). There&#x27;s a lot of focus the drastic cuts to Sales and Marketing, but it looks like there&#x27;s a fair amount of increased discipline across the board.<p>- It&#x27;s interesting that Operations and support looks to be very similar in both the first 9 months of 2019 and 2020 despite having drastically different revenue numbers. They had to spend roughly the same amount (600 million) to support 30% less revenue<p>- Looks like China is a huge part of their future strategy, so much so that it is explicitly called out in their Executive Compensation bonus calculation (p271). I can think of exactly one other American consumer tech company that has had success in China.

Personally I think AirBnb had its time.<p>To me AirBnb is like a hotel, except:<p>- No gym, sauna and other SPA facilities included<p>- No breakfast buffet, restaurants or room service available<p>- No room upgrades available<p>- No early check in&#x2F;late check out available<p>- No 24&#x2F;7 access available<p>- No reception desk 24&#x2F;7 available where I can ask for good recommendations, learn a bit more about the place without feeling awkward to ask or risk being sucked into a long unnecessary conversation<p>- No easy way to voice complaints or raise concerns if something goes wrong<p>- No extra facilities such as laundry, flower service, etc.<p>- No other guests which I can meet in the lobby, at the bar and so on to socialise<p>On the other hand I get this at AirBnbs:<p>- Having difficulties to access the property because hosts want to meet somewhere in a place which suits them but not me<p>- Sometimes waiting for the house&#x2F;flat keys longer than expected<p>- Sometimes being told on arrival how some things &quot;recently&quot; broke and that they won&#x27;t be available during my stay<p>- Awkward hellos and good byes<p>- Awkward random house rules<p>- Awkward access restrictions such as can&#x27;t open this gate after X hour, and so on<p>- A lot of fake friendliness as long as you don&#x27;t raise any concerns<p>- Difficulties to raise issues and getting refunds<p>- A lot more which I can&#x27;t think of now, but left me with a really bad aftertaste every time

Airbnb was cool when it was a place to share with hosts and rent a bed and a breakfast during my trips, allowing me to save some money and meeting some cool people.<p>now it’s just a boring business of terrible managed apartments with really bad amenities and problems that make you lose time and totally diverges you from the whole concept of hassle-free vacation&#x2F;renting.<p>My last 5 airbnbs were apartments fully setted up to be rented in Airbnb just for the money and not for the experience and good service, every single one of them were so much problematic to check-in&#x2F;check-out, I was charged insane cleaning fees even tho the places were not clean and were never cleaned, I had to deal with people putting cameras around totally disrupting your privacy, I had to deal with overcrowded apartments (some guy decided to rent every room in his place and sleep in the living room without mentioning it anywhere in the listing), I had to deal with last minute cancels that almost made me sleep in the street, etc.<p>Worth mentioning that all of those bad experiences came from places that were marked as &quot;superhost&quot; and had quite a lot of reviews.<p>Aand lastly, Airbnb decided to just void a 500$ giftcard that I got in 2018 and I tried to use early 2020 and they said it was invalid, I just lost the money.<p>Airbnb it’s just death for me

The seesaw in revenue over the last 3 quarters is insane: 841M, 334M, 1.3B in Q1, Q2, Q3. They even posted a profit last quarter. I&#x27;ve gotta say, the S1 looks appealing considering how few profitable silicon valley companies there are these days. On the other hand, I have a hard time interpreting whether this is truly a profitable company since the numbers are all over the place.<p>It also looks like Q3 tends to be their best quarter by far. Is that because of summer vacations?

It is probably early to congratulate the founders and the team, but as someone who started using Airbnb before they were cool, and having watched the company grow, it is very joyful to see they are finally going public. Hopefully it&#x27;s just up and to the right even more from here onwards. Good luck!

huh<p>&gt; Most of our guests discover Airbnb organically, with approximately 91% of all traffic to Airbnb coming through direct or unpaid channels during the nine months ended September 30, 2020.<p>Anyone know what % of traffic to Bookings and Expedia (and others) are paid vs unpaid? 91% unpaid seems really high, and I wonder if it&#x27;s because Airbnb is so differentiated &#x2F; people want to &quot;Airbnb&quot; a place (vs. &quot;stay somewhere&quot;)<p>edit:<p>&gt; Our hosts had 7.4 million available listings of homes and experiences as of September 30, 2020, of which 5.6 million were active listings. We consider a listing of a home or an experience to be an “active listing” if it is viewable on Airbnb and has been previously booked at least once on Airbnb<p>IMO it&#x27;s super sneaky to blend homes and experiences together

I like airbnb. They need to get better at weeding out fake&#x2F;scammy listings, that tend to plague many online marketplaces where things can be listed for free. Maybe some in-person verification system, or a fee that gets refunded if you have a certain number of guests. There are plenty of listings with huge&#x2F;exclusive homes, yet no reviews and extremely cheap prices. I don&#x27;t know what people get out of these listings, but it&#x27;s really weird and makes the user doubtful about the authenticity of the marketplace.

Down $600m in 2019 and another $600m in 2020? With $2b in debt? Ouch.<p>I&#x27;m reading this right, correct? I see the cash positions below are a bit different, but that&#x27;s likely from... the loans?<p>2018 looked so hopeful. They only lose $20m total! 2019 should have been a profitable year, IMO, but they went with the aggressive strategy.

<a href="http:&#x2F;&#x2F;www.paulgraham.com&#x2F;airbnb.html" rel="nofollow">http:&#x2F;&#x2F;www.paulgraham.com&#x2F;airbnb.html</a>

Wow, the financials are a little bit surprising (in how bad they seem to be, but in actuality might be okay)<p>Amazing growth and story up to 2018 (only $20M loss on $3.5B rev), clear investment in the marketing side that leads to the 2019 loss, but now curious if they can rebound when the world opens up.<p>Investing in Airbnb is definitely a bet on their model righting itself in a reasonable time frame. I wonder if their IPO price will have to reflect current realities instead of just future potential (given it probably won&#x27;t improve its profitability for 2 years now)

Does anyone know what happened with the stock options for early airbnb employees which were expiring this month (Nov 2020)? Did they find some legal way to extend the options, or did employees end up having to find the money to exercise them or else lose out on them?<p>For context: <a href="http:&#x2F;&#x2F;archive.is&#x2F;xdv1u" rel="nofollow">http:&#x2F;&#x2F;archive.is&#x2F;xdv1u</a> (NYT Article)

&gt;&gt;<i>the board of directors reduced Mr. Chesky’s base salary from $110,000 to $1, set his target bonus at $0, and granted him a long-term, multi-year equity award comprised of 12,000,000 RSUs (the “Multi-Year Award”).</i><p>Its quite surprising that CEO of Airbnb should make just $110k&#x2F; annum in base salary before the company goes public. I would expect it to be around $500k.

It is so frustrating with all those recent tech startups how much they&#x27;re spending on sales and marketing: <a href="https:&#x2F;&#x2F;www.sec.gov&#x2F;Archives&#x2F;edgar&#x2F;data&#x2F;1559720&#x2F;000119312520294801&#x2F;d81668ds1.htm#fin81668_3" rel="nofollow">https:&#x2F;&#x2F;www.sec.gov&#x2F;Archives&#x2F;edgar&#x2F;data&#x2F;1559720&#x2F;000119312520...</a><p>How does one figure whether the business will keep growing without blasting people&#x27;s faces with ads? If so much spend on ads is required to generate revenue growth then there will either never be profits or the revenue growth will stall (and thus the equity is worth rather little), if ads are not required then why are they spending so much on them, or maybe when will they stop spending.<p>All the &quot;heroes&quot; of the tech boom (Facebook, Google, Apple, Microsoft) did not suffer from this problem - they were profitable before going public.<p>It feels like this time we&#x27;re in an advertising bubble. Nearly every single S-1 submitted to HN has this feature.<p>I am genuinely puzzled by this, if someone can offer some perspective on how can you model something like this I would be grateful - what assumptions you&#x27;d be making here.

&gt; Mr. Stephenson’s offer letter provides for an initial base salary of $600,000, an initial target bonus of 75% of his base salary, and a one-time hiring bonus in the aggregate amount of $2,400,000<p>While I&#x27;ve received signing bonuses in the past, I was not aware that you could get a signing bonus that was 4x of your base salary.

I&#x27;m curious how badly the pandemic has hit and will hit AirBnB. I scanned a couple of tidbits from the S-1:<p>- <i>Reducing full-time employee headcount by approximately 25%</i> (I&#x27;m curious from what&#x2F;to?)<p>- <i>Setting expectation for the potential of no employee bonuses for 2020 and reducing executive team member salaries for six months</i> (interesting that executive team _salary_ is getting reduced rather than bonuses, no? At this level isn&#x27;t most of your compensation not direct salary?)<p>- (to the above point) <i>, in May 2020, we announced a reduction in our workforce of approximately 1,800 employees</i> (So I guess they had ~9,000 employees?)<p>- Outstanding RSU obligations are quoted as ~$2.7B<p>It seems fair to wonder, given the timing during a pandemic, that there&#x27;s a need or desire to cash out by the investors and founders.<p>I wonder if their headcount downsizing wasn&#x27;t severe enough. 9,000 employees seems like a lot for an intermediary. A lot of these companies seem to get in the habit of thinking they&#x27;re the next Google long before they have the Google revenues to fund such pursuits.<p>The risks section reads as expected.<p>I do wonder if the tide is turning against home &quot;sharing&quot;. Unlike ride-sharing, there are significant externalities to deal with. People don&#x27;t generally don&#x27;t want to live near an illegal (in many cases) hotel and it&#x27;s not so easy for them to up and move. It&#x27;s classic tragedy of the commons.<p>What&#x27;s more AirBnB has (IMHO) a provable negative impact on the supply of rental units in many cities.<p>So cue the standard self-serving defense of AirBnB. I, for one, would not be sad to see it go.

&quot;We have incurred net losses in each year since inception, and we may not be able to achieve profitability.&quot;<p>At least they&#x27;re honest about it!

In my view, AirBnb made the travel pie substantially larger. More people can afford to travel when rooms in far away places can be rented for small amounts. If the choice is not traveling at all vs. putting up with the friction of finding the property and getting the key, reviewing the house rules and then stripping the bed and taking out the trash before you check out, many people will choose the convenience hit and take more trips. Such as 260 entire place stays in London for under $60&#x2F;night.<p>Put that together with some ridiculously low international air fare, like, RT SFO LHR for $700, pre-pandemic, and many more people will travel.

Assuming COVID ends up as less of a threat towards the end of next year, this might be good timing in favor of employees. Travel (and market sentiment around travel companies) might pick up right around the time when their lock-in period expires.

I heard a podcast discuss the possibility of AirBnB offering shares or options to superhosts (like me) ahead of the IPO–essentially as a &quot;thank you&quot; to the people who helped build the marketplace.<p>Anyone have thoughts on if that is possible or plausible?

Personally, I wish AirBNB rules would be stricter in London and that it requires some special licensing from the council were neighbours can easily complain about the person&#x27;s guests.<p>I am sick of the random people being rude to me and the constant parties&#x2F;noise. I can&#x27;t do much about it. The bylaws of the building doesn&#x27;t forbid it. I am trying to get elected to be part of the board so I can request these change to the bylaws.<p>I prefer to know my neighbours, might not be friends, but at least have some relation to them.

Can anyone estimate what an investors in 2009 in Air BNB will get for an ROI post- IPO? I just looked and S&amp;P 500 returned 426.134% with dividends reinvested through September 2020.

I expected far-worse numbers but they seem to be doing okay considering the pandemic.<p>Revenue:<p>2020* 2.5billions<p>2019 4.9billions<p>2018 3.7billions<p>*until September.

They lost $600 mil in _2019_? And $700 mil so far this year? Woah.

This is the big risk factor that I&#x27;d be concerned about as an investor:<p><pre><code> Laws, regulations, and rules that affect the short-term rental and home sharing business have limited and may continue to limit the ability or willingness of hosts to share their spaces over our platform and expose our hosts or us to significant penalties, which have had and could continue to have a material adverse effect on our business, results of operations, and financial condition. </code></pre> Most of the most big, vibrant cities that are the biggest tourism draws and should be growth areas for Airbnb also have housing pressures, and we have seen housing advocates push governments to implement Airbnb restrictions. Due to covid this has not been a big issue of late, but my expectation is that as tourism increases again, attention will once again return to Airbnb&#x27;s distortionary impact on the housing market (both sale and rental).<p>In most of the world Airbnb will not be able to buy a law like Uber&#x2F;Lyft did with Prop 22 to get out of this jam.

I just started hosting with AirBNB and experienced a bug with the platform. It offered the wrong price ($100 instead of $278) and the guest accepted before I could intervene because the platform defaulted to AutoAccept.<p>When I reported the problem, the support rep claimed it happened that way because I had &quot;Smart Pricing&quot; on. It was set ON by default. But AirBNB&#x27;s own documentation says the Custom Price I set for the dates in question (Xmas week) override all other pricing.<p>Even if &quot;Smart Pricing&quot; had applied, it shouldn&#x27;t have offered the lowest price for the highest demand week of the year, because AirBNB&#x27;s own calendar shows the demand peaking high for the week, not low.<p>Now I&#x27;ve been 3 days trying to get a response from tech support.<p>They deny responsibility, and promise to escalate it to a supervisor, then close the case without responding to my detailed evidence.<p>What can I do? Does anyone know how to escalate to an AirBNB IT person? I would have thought AirBNB would like to know its platform has a serious bug.

I wonder about their long term business model. Sure they have opened up the industry, but I&#x27;d think its quite easy to copy them. Sure there are a bunch of people that will keep AirBnB their favorite but when I&#x27;m looking at places I&#x27;ll religiously check every site I can. There will be nothing unique about them.

Can we talk about how the Airbnb founders managed to hold onto 45%+ of the company after $5B+ in funding?

Totally anecdotal, but in the early years of Airbnb, I was a staunch advocate of their mission and execution. Fast forward to now and several negative experiences with the firm (which have only really happened over the last couple of years) have left me wary of the company, especially having had great experiences with other services like Booking.com. That said, for the chief product that Airbnb mediates - rooms or apartments instead of hotels or hostels -, they&#x27;re top dog. Alternative options in this space are mighty slim if you&#x27;re looking beyond non-sketchy options, perhaps because barriers to entry, by way of building large-enough user and hosts bases, are _really_ difficult to build up.

77% of nights booked were for entire homes ( not spare rooms ). I would have guessed this to be much higher, like 95+ or something.<p>That’s interesting and I guess the big thing that makes this different than vrbo if they can grow the spare room side much more over time

since the pandemic started, i&#x27;ve seen airbnb guests constantly showing up for a stay in our apartment building where subletting via airbnb is specifically prohibited. leasing office doesn&#x27;t care and looks the other way. this has contributed to the spread of covid-19 without doubt. it&#x27;s infuriating to have total strangers hang around the property while trying to concentrate on work and writing software. these people show up, refuse to wear masks and then get drunk and hang around &#x2F; go to the beach nearby. airbnb doesn&#x27;t contribute anything to society and how this company can be profitable at all is a total mystery to me.

Gotta love the accounting practice of putting coupons&#x2F;discounts in the Sales and Marketing Expenses. I saw the same thing in Doordash&#x27;s S-1. I wonder what their true gross margin is.

Seems like they have an upcoming bigger than expected tax bill...<p>&gt; In September 2020, we received a Draft Notice of Proposed Adjustment from the IRS for the 2013 tax year proposing an increase to our U.S. taxable income that could result in additional income tax expense and cash tax liability of $1.35 billion, plus penalties and interest, which exceeds our current reserve recorded in our consolidated financial statements by more than $1.0 billion.

I’m a millennial and I love using Airbnb. That being said I struggle to understand what the competitive advantage &#x2F; moat is for Airbnb.<p>Outside of brand &#x2F; name recognition I don’t know any reasons why someone would pick Airbnb over VRBO or another service.<p>Is there some sort of data play that they are making? Why would I invest in Airbnb when I could buy into a REIT or some other real estate asset? Would love some ellucidation.

i know that a lot of it is standard, but woowee, like 74 pages of risk factors.

Has anyone done a comprehensive review of the Airbnb regulatory environment? I know there&#x27;s a bunch of places where some of it has settled but also many where hosts might still be operating contrary to regulations. Would be interested in knowing how that breaks out around the world.

I wonder if this is the right timing?

I couldn&#x27;t find any shares owned by YC (pp 302). Could they be in &#x27;Other Selling Stockholders&#x27; that represent less than 1%?

Does anybody know when liquidity event will happen for employers and ex-employers? Potentially could be a good time to buy stock shares.

I switched from hosting with Airbnb over to a property management company when I&#x27;m out of town. Airbnb continues to refuse to take security seriously and won&#x27;t fulfill their host guarantee in the event that a guest causes thousands of dollars in damages. They should be an easy company to beat for long term rentals since they&#x27;re so poorly run in many ways. I don&#x27;t think they have any serious competition for very short term housing rentals ( not talking about hotels).

Quite a lot of negative comments about AirBNB from Hacker News today. Definitely a buy signal

Another middle-man company goes IPO, getting more funds to lobby&#x2F;bribe local politicians to allow smooth operation at local population&#x27;s quality of life expense. Hope they don&#x27;t live too long. Covid might&#x27;ve done something good here

I’d say Uber must be envious of Airbnb’s much better business model.

Anyone else think this is a pretty bad time all things considered?

Airbnb sucks. They wouldn&#x27;t let me delete my account without providing them my photo ID. Something they never asked for when I created my account. Reduce churn by being total assholes. Great.

2bn in debt on negative 250mm of adj. ebitda? Wow

Anyone know when the IPO listing date is?

In the middle of a pandemic. Bold move

What action am I meant to take in response to these stories? Put £5k aside to buy shares?

wow so finally they pulled this through during covid, good timing with the vaccines just coming out.<p>Any airbnb=er here wants to invest in a travel company? lol you never know..

Excited to learn more about the specifics. Really hoping people don&#x27;t flood this thread with their anecdotal bad Airbnb experiences (&quot;I paid below market rate this one time 6 years ago and got a crappy host, therefore this company is going to fail!&quot;), which seems to happen every-time someone mentions their name.

Isn&#x27;t booking.com competitor to AirBnB

Great! Hotels don&#x27;t like this.

I look at IPOs quite differently than most. For me, I am looking at the fundamental business. For me the usual questions are:<p><i>Does the company have a legitimate business advantage that can establish market dominance?<p></i>How easy is it to replicate the business?<p><i>Consumer trends - Who is using the product - young people vs older?<p></i>Revenue: Quarter over quarter increase? or a logical explanation if the rev is not growing.<p>*Consumer comments: Do people like the company so much that they tell their friend about it?<p>Based on this, I think AirBnB is a winner all around. The company has developed a platform and a brand loyalty that has basically eliminated most competition in this space. In fact, their competitors are so small that most could not even name them.<p>From a technology standpoint, it is relatively easy to replicate but the branding and loyalty to AirBnB is unrivaled so this is what creates their moat. First-mover advantage is strong is this sector and it is clear AirBnb has gained the first-mover advantage by a wide margin.<p>Consumer trends - Young people love it. As these consumers get older, their income will increase and they will book more through AirBnB. The very young will most likely start off using AirBnB and never use hotels directly.<p>Revenue - Showing consistent growth prior to COVID-19. With COVID-19 apparently on the way to being vaccinated away the &quot;COVID-19 slump&quot; is not a concern for me. I could see vacation spending soaring once COVID-19 fears subsidies with consumers.<p>Consumer comments - People love AirBnB so much that they tell their friends about it. There are some issues with fraud but my guess is over time, AirBnB will figure out how to snuff these bad hosts out of their platform.

Because Chrome is just as aggressive with it&#x27;s nag prompts, it would be a bit weird for Microsoft to just lay down and take it in this case though.<p>I think for the average user Chrome&#x2F;Edge are pretty much interchangeable now. For advanced users it&#x27;s pretty annoying but it&#x27;s less than a second to switch off.

No idea what the process for getting this information released is... but it feels unlikely to be a coincidence that on the day a 2nd extremely effective vaccine is announced to the world... Airbnb files their public S1.<p>A lot of that document talks about COVID-19 and how it&#x27;s effected their business (no surprise there) but also several mentions of vaccines. Mostly in the following phrase (repeated 3 times in the document, I think):<p>&gt; The extent and duration of the adverse impact of COVID-19 on the Company over the longer term remain uncertain and dependent on future developments that cannot be accurately predicted at this time, such as the severity and transmission rate of COVID-19, the extent and effectiveness of containment actions taken, including mobility restrictions, the timing, availability, and effectiveness of vaccines, and the impact of these and other factors on travel behavior in general and on the Company’s business.