I can't find anything suggesting they're spending more than $100mm on their ongoing litigation, the technology isn't particularly novel or complex, is the rest just going to compliance or to pay for previous commitments?
Just seems like an absurd amount of money. That's like one year of revenue for them.
It makes absolutely sense to have enough money to weather this storm....
Even firing people costs money... even just keeping their lights on, and service at bay, (with no new features) costs money....
People that usually comment like the above are either: Young and inexperienced, or just not don't have real life experience on running a business. I used to think like that when I was young, but after some years of experience your view on things changes and becomes more nuanced.
https://www.bloomberg.com/news/articles/2020-03-30/airbnb-wi...
> Guests who cancel are automatically refunded according to YOUR cancellation policy—unless the cancellation qualifies as an extenuating circumstance or falls under our Guest Refund Policy.
Exactly. And they were not legally allowed to do that. Which is why they are reimbursing hosts. They were flooded with cancellations and did right by the renter, but wanted the host to take the hit, when in reality the broker (AirBnb) is liable.
When Trump extended his guideline, they only offered half the cash back or all of it in credit. That doesn't even feel legal to me.
The comment is not on the necessity of money but the amount. I legitimately can not fathom why AirBnb needs that much money to run a service business on top of a custom app and website when the fundamental complexity of the business (the particular nuances of local markets, their regulatory/compliance needs, etc) has always been a second thought to their management and trawling for articles, it does not seem like they need that much money to continue. Particularly since regulatory bodies and courts have closed worldwide.
It’s analogous to the size of government and this trend of doing less with more.
Craigslist has 50 employees. I know there’s a ton of counter arguments to minimize my point but surely there’s a third way between 50 and 12,000.
Plus Airbnb has reps all over the world helping hosts. If they had ten staff (photographers, sales, etc) in every city that has more than a million population that'd account for more than 5000 people alone.
I'm a superhost with only 5 listings one has over 100 reviews with 4.98 average rating. So far Airbnb has remotely adjudicated 2 guest disputes (on my 4 years of operations) that cost me $5k. Not trivial.
Dispute resolution is essentially marketing. When a host tells people they lost a dispute most people don't care because they're not going to be in that position. Most people can't afford to buy property to let on Airbnb. Even it they are in a position to buy and let a property, so long as Airbnb have more supply than demand then they're happy - they're getting every booking they can. Having another host in an area that already has hosts doesn't add much to their business. (If you were the only host in the area then you'd be much more likely to win disputes.)
When a guest tells people they lost then everyone can imagine being in that position, and might stop wanting to use Airbnb. That has a measurable impact on Airbnb's revenue.
The key thing to remember with any company that runs both sides of a marketplace is that they care about themselves more than either party in a dispute. I have no idea about the numbers, but if Airbnb side with hosts more than 10% of the time I'd be absolutely amazed. In popular areas it's probably less than 5%.
I mean at what point will people stop valuing a business like that like a tech company and start valuing it like a rental company? Because the defining feature of technology is essentially low marginal cost at scale, and these companies just seem to keep growing in their human labour.
This seems generally true for a lot of companies in the "sharing economy" space.
Underestimating employee counts is a phenomenon similar to underestimating software rewrite costs/time. The happy path seems simple... but then there's thousands of marginal features or requirements that have come up over the years that make the thing more viable that all take more people and more time.
Marriot et al employ hotel staff, cleaners, chefs, restaurant staff, bar staff... people to run a hospitality business.
Fairer comparison would be booking.com with 17000 people. Which still seems quite high to be honest.
Outside of the current crisis I think this holds true doesn't it? I'd be curious to compare how many employees AirBnb has per bedroom compared to a hotel chain (and then factor in that they are still in the process of scaling).
The issue now means they have pretty much zero revenue, but that's kind of beside the point. I'd venture to guess they can manage costs better than a hotel since they don't actually own any buildings, or employ the folks that maintain those buildings. As far as property costs, they take a one time hit on cancellations.
Like a Stripe loan, but for the house you bought to Airbnb.
When the market comes back all the loans are sold off (collateralized or just packaged up) and Airbnb can service their original debt with the spread.
Tourism was the first sector to suffer in this crisis and my guess is it will be the last to recover.