Airbnb reportedly lays off contractors and cancels summer internships | Hacker News Reader

Airbnb reportedly lays off contractors and cancels summer internships

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65 pointsstu2b5063 comments

I have nothing against the people working at AirBnB and I wish them all the best of luck, but I genuinely hope that the AirBnB business model will get heavily regulated and controlled.

I have heard plenty of horror stories from my hometown about the negative impact of AirBnB on the overall quality life for residents. It was proven [1], that number of AirBnB listings in a city has obviously negative impact on the rents and the price of housing [2] in a given city. All of us pay every month a premium for the success of AirBnB.

[1] https://hbr.org/2019/04/research-when-airbnb-listings-in-a-c...

[2] https://www.epi.org/publication/the-economic-costs-and-benef...

Edit: Formatting & grammar fixes

A long or short term rental discoverability platform with payments, dispute resolution, and an availability calendar is really all that was needed. All of the experience stuff seems nice but really feels like a distraction. Airbnb for so long was so good at a very simple and useful thing.

Genuinely, I wonder why this happens. Is this because companies raise too much money that they have to morph into some "experience" company that ever offers more and more to get more and more revenue growth until they eventually bloat to the tech equivalent of a department store? I see it repeatedly with not just tech companies but DTC brands that pretend to be tech companies as well. Is the pressure from VC money that you have short term opportunity but you eventually will mutate into a blob of a company that isn't really good at anything like so many old-world companies that die?

It easy to estimate the revenue and hard to estimate the inefficiency.

Revenue scales linearly while the inefficiency grows exponentially (even though it starts small). Inefficiencies such as Customer service rep training, brand dilution, shopping cart conversions rates, etc. all suffer a little when you add additional products. The "Wow look at the TAM of X!" is a powerful distraction that is hard to avoid without discipline.

I always assumed "experiences" was a hedge against being made illegal by various jurisdictions.

I always thought it was a way to derive profit from not only people's accommodation, but also whatever else they want to spend their time doing on their holidays.

That was my thought. Same as ads. If the currency is the attention of users, why not double-dip profits!

It's the same reason when I book a plane flight, someone's always trying to sell me the rental car while I'm there

It's both but there's no doubt they were feeling squeezed in numerous locales for having people skirting or outright violating regulations on hotels and vacation properties.

Probably part of it, but I'm pretty sure they did it because they essentially saturated the current market and in order to grow (and/or pump up their valuation) they had to reach outside their core.

Partly that, but it’s also a way to differentiate a largely generic product that mostly acts as a middleman. There are already a few Airbnb clones, and there are really not very high barriers to switch platforms. In the long term Airbnb needs to add value beyond the basic marketplace.

"Dispute resolution" is incredibly difficult, expensive and requires non-scalable humans to work out which of the other humans is lying and what the right resolution is.

AirBnB was also an "illegality exploitation" company responsible for converting a lot of rental housing into hotels without going through the planning process, which was great for travellers but bad for their neighbours, and AirBnB was also going to struggle with the backlash.

Got super sick. Like near death level. Recovery took a year. Would be homeless if I hadn’t been able to run an Airbnb. It paid most of my housing cost.

Changing a room over would take 1-6 hours because I was so weak and slow.

But it gave me time to recover and start working again.

I found keeping price up kept the trouble makers away.

Being super flexible on everything Kept rooms booked near 100%.

Glad to not be doing it anymore but it probably saved my life.

Meet lots of interesting people. Several stories from it.

I also own a LOT of air filters now due to all the the various international cooking.

It seems that all the positive airbnb stories are "people renting out part of the house they live in to guests" and all the negative ones are "absentee landlord buys property specifically for the purpose, hires immigrants to do the turnover at below minimum wage and overfills it". If they'd kept to the first model they wouldn't be so widely hated.

AirBnb has driven the cost of normal long-term rental property in city centers up to almost the cost of hotel rooms while reducing its availability.

Yeah, I don't think the hatred for AirBnB would be anywhere near the levels it is if it was just people renting out parts of their house to guests. It's the fact people are buying up (or building properties) that were/would be long-term without AirBnB that's upsetting people. This is what's pushing the price up everywhere, as rentiers realize that can make more money from short-term lets.

I actually really enjoy experiences. I've used the product myself and it's a great way to experience a new location with a local host.

Used it for six months of traveling a few years ago.

Lot cheaper than hotels. A few bad experiences, but mostly positive.

Leaned quickly to not take the cheapest rooms available.

GP comment is talking about "Airbnb experiences" a specific offering of Airbnb that's not related to short term renting. It's to book a local guide to an activity.

I like the experiences. It's a great way to discover things I might not think to do. Last month before the lockdown, I went snorkeling with a marine ecologist and stargazing with a working astronomer. I quite enjoyed the experience of chatting with people who had a side hustle related to their primary profession.

Same here as one of the biggest pain in the ass after booking a hotel and airflight is what do you do at your destination? This helps a bunch.

I think it’s the VC money: we’ve seen wave after wave of this since the late 90s where a company with a plausible idea is under a ton of pressure to grow unrealistically fast because that’s the only way to get the kind of returns their investors are hoping for. There are a few businesses where you can scale that rapidly because you have insanely high leverage on your staff time (software, very broad services like Google search which almost everyone can use many times daily) but too many money guys think everything which uses computers can scale like that.

I mean, back in 1999 you could get groceries and other shopping delivered by Kozmo — clearly something people want since that’s an established mainstream business now – and it was profitable in a number of urban markets. Unfortunately their investors weren’t thinking long-term and demanded country-wide expansion, and they went bankrupt as soon as the easy money dried up because they’d taken on so much startup cost in different markets. If they’d understood the business they were actually in, they’d probably have blocked Peapod, Doordash, Instacart, etc. from even starting.

Apparently internships are deferred till next year. Don't know how that'll work.

It's entirely possible Airbnb never comes back after this, and that a competing product will not be able to fill its shoes. The regulation free zone that Airbnb was able to grow in no longer exists and will never come back, at least in the more urban areas. I'm not sure how they come back from this.

They have 12k employees from what I've heard, there's significant fat to trim. Hopefully they can stay afloat.

Seems like they have enough cash to ride this out. But yes very possible that they'll need to scale back dramatically and change their business model entirely. I'm guessing even after restrictions are lifted, people will be hesitant to travel and stay at airbnbs, and also many hosts will be nervous staying on the platform.

Yeah, the 2 billion dollars in loans will be enough to ride it out. I doubt whether they'll ever recover in the long term from this, though.

Yes, even aside from all the ill will AirBnB has generated (both cumulatively and specific to this event), you have to ask: when was the last time you went to an AirBnB and it felt clean? Most hosts seems to do the absolute bare minimum since they know that the review system is mutually assured destruction.

I've used AirBnb maybe 20 or so times and I've never had an AirBnB that felt or looked dirty.

I've only used it twice, and it was mixed. The worst was the smell in the 2nd place.

yeah it's def region dependent. There's hacker hostels in the bay that look and smell like frat houses. You can't help but get the feeling the host is exploiting immigrants/summer interns who don't know any better.

I used them quite frequent and overall never had an issue.

In my experience, there is a large range in the effort hosts put in, and low fungibility as a result. There is a bit of signal in the reviews, but not usually enough to be very helpful. Some hosts really do try to make it a hotel quality experience and sweat the details. On the other hand, a host once blamed me for not bringing my own bath towel after I was surprised to find that there were no towels at all in the unit, including in drawers and closets.

I've used AirBnBs a lot and there has been a range of cleanliness. I've never had one that wasn't clean enough to stay in though. The large majority of my AirBnB/VRBO/etc... experience has been in Europe so that may contribute to my experience.

Kids left some coco puffs in bathroom. Traveler freaked out.

Guess he thought they were bugs or turds.

Became zealots about cleaning after that.

Never had another issue

Airbnb (anecdotally form what I've seen) is one of the largest employer for data-engineers and data scientists. I wonder if this will be a watershed moment to see if they actually do need the amount of data work business wise.

That's fair, but since the economics of giant ecommerce companies are extremely sensitive to every step of the funnel, I think they'll discover it's worthwhile.

An 0.1% increase in conversion anywhere along your funnel is significant with billions of dollars pointed at the funnel.

I'm not sure how they come back from this.

People will return to travel, and some may prefer apartment-style accommodations over a crowded hotel.

There is also a lot of investment in the ecosystem on the part of landlords; some will fail but others will want to return to the airbnb model. In some cases have no choice -- a ski or beach condo isn't going to easily find long-term tenants.

I don't doubt that the market for travel and accommodations will return. What I doubt is whether Airbnb can weather the crisis without meeting financial ruin, and whether they can continue to fight the legal battles around the world they need to win to survive.

Additionally, I would think that AirBnB hosts will begin to consider local, longer term renters rather than keeping housing-stock out of the longer term market in order to extract more from the short-term market.

With the possibility of moving to a city where housing options have been decimated by AirBnB, I really hope this happens.

Gotta act soon, IMO. https://euobserver.com/coronavirus/148035

Hopefully the local authorities don't forget this and can use this as evidence against Airbnb-motivated leeches, after the crisis.

Other than searchability and "the audience", does the space really need a platform, per say? The value to the host is that there's lots of users, and the value to the users are that there's lots of hosts. To me this layer should be a lot thinner.

> The value to the host is that there's lots of users,

Hosts get insurance and some amount of verification of their guests out of AirBNB. Those are not trivial safety features!

What if there were a centralized verification place as a public service? Surely insurance would not be the hardest thing to come by. We in the US basically have a "social credit system" but its all implicit, based on credit reports. Why couldn't someone else provide a clearinghouse for "users renting something"? I realize there's a bit of overlap with some draconian "social credit score" government things, but there's some really legitimate economic benefits to having centralized identity - again we effectively have that within financial markets thru the credit score.

Isn't it more the illusion of insurance? There are sooo many stories of Airbnb dicking either hosts or guests around during claims, that I cheer and hope for their demise.

> from what I've heard, there's significant fat to trim

My company was pitched to redesign our Oakland office by Airbnb's architects who used their airbnb HQ work for our pitch. They had truly spared no expense in the design, we came away actually horrified at how overpriced and needlessly overdesigned things were. We didn't go with that vendor and in fact their office design was so opulent it served as an example of what not to do - we swung our design the other side of the pendulum and simplified and streamlined our office!

fascinating story - got any more details on the proposed design you abandoned?

I did an electrical estimate for an unnamed software company office buildout a few months ago. The light fixture package alone was $19/sqft, not including labor. Our entire scope is usually $15-18/sqft, which includes all labor, material, rentals, permits, and taxes.

I wasn’t sure if they just wanted to blow a bunch of money, or if the architects were taking them for a ride.

It's entirely possible state/local regulators will use the covid-19 moment to really clamp down on AirBnB. Thus erecting severe obstacles to its operations that endure long after Covid-19 has subsided. I'm not sure what kind of term Silver Lake laid down on AirBnB, it's possible that if/when Silver Lake does convert its debt to equity, it may wipe out most of the existing shareholders.

In terms of both political expediency and social good, it might not be a bad idea for them to crack down on Airbnb to increase the available housing supply that could potentially lower rents, in a time when economic insecurity drives voter fears about if they can make rent or not.

Poland recently announced that hotels will be allowed to open back up earlier than many other things, because the hospitality industry is such an important part of the economy. At this moment, I wonder if the authorities would be happy if AirBnB rentals started again, because that would get cash right into people’s hands during this time of crisis, and slightly lessen the expectation that the state has to hand out that money.

That seems kind of backwards unless they've got very heavy testing - the last thing you want in a pandemic is travellers!

Poland is a big enough country, and so a lot of the traveling is going to be domestic, or from other EU countries with which the borders are opened as the curve flattens in them, too. The authorities know that the weather is getting warmer and some people are going to travel for leisure and they can't really stop that. But also, a town’s accommodation options will be used by business travelers, or by people visiting family who, for whatever reason, cannot stay at those relatives’ homes, and that represents money coming into a local community which might really need it now.

Has anything fundamentally changed (in the long-term) about the short-term rental market? It's clear Airbnb would likely have a substantial drop in revenue, but they only have to make it through the crisis.

What will this mean for the short-term rental properties themselves? There could be a new supply of housing on the market, as much of it was speculatively picked up. It's true that you can earn more operating a unit as a short-term rental, however in aggregate only so many can do that before demand dries up or price competition undercuts the increased profitably when compared to a long term tenant.

The short term affects the market. Apparently Airbnb spent a lot of money on an Olympics marketing partnership, that's down the toilet. They've taken out 2 separate 1 billion dollar loans, one at 12%, another at 8%, in the last month(?). With their budgets strapped, they'll have less money and wherewithal to fight the legal battles they need to win to stay operational in many major urban markets around the world. The situation is absolutely dire, and their survival through the crisis is not a sure prospect in the slightest.

They have enough cash to make it through the crisis but the loans they will need to use will significantly affect their IPO which they need to do soon for their investors. Most want a return in ~10 years and AirBNB has passed that marker, seeing another money losing Unicorn on the stock market isnt what people want especially after the COVID crash.

In the long term, I don't think much has changed. The question is whether AirBnB can survive until people revert to normal travel behavior. In the short term there is little to no travel, and in the medium term there will be social distancing for a long time and less travel than before.

I wonder how many short-term rental owners are unable to pay their mortgages without Airbnb revenue

I live in a vacation destination (that's also the commercial center of my state) and it's been interesting to watch the short term rentals start to pop up on craigslist (the state has banned short term rentals during the shutdown). There are a lot more than I thought there would be. The language evades that they are otherwise airbnbs, they are generally are offering limited terms (30-60 days) and they all have professional quality photos in the listing. Also, why do people decorate rentals with so much white? Isn't that a stain liability?

White bleaches out. Bright spaces are more inviting and photograph better. And once something white is clean, you can see it is clean, so you can "feel" how clean it is in a photo. And everything is from Ikea anyway so just throw it out if it's really done in. You've likely made enough to exchange some covers every six months.

There is a decent chance this crisis wipes out Airbnb’s equity, with the recent lenders owning most of not all of it within a year.

To everyone worrying about AirBnB surviving, didn't you see the 1 Billion loan they got last week?

Interesting. My internship (not at Airbnb) is still happening, but now remotely. I booked some housing through Airbnb without refunds, so now I am attempting to get a refund from Airbnb due to COVID–19.

Layoffs coming after quarterly earnings.

Airbnb is not a public company, which quarterly earnings are you thinking of?

AirBNB announces their performance on a regular basis [1][2], especially since they were planning on going public 2020/2021, but Im talking about when they finish their quarter internally and asses how they stand as a company. We will start seeing a lot of layoffs from bigger companies when quarterly results come in. The first wave of layoffs were service industry, front line, immediately impacted by a stoppage of cash flow, there will be a cascading effect on the economy for a long time.

[1] https://www.cnbc.com/2019/10/17/airbnbs-quarterly-loss-repor...

[2]https://skift.com/2020/03/12/airbnb-loses-276-million-and-6-...

Companies preparing to IPO start 'reporting earnings' internally a few years in advance. This is because of both SEC requirements and expectations of the banks working on the IPO. While quarterly earnings reports would not be publicly available, AirBnB certainly does do them internally.

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