Just to put this in perspect. Starwood has a valuation of about $10 billion.
Starwood employs 150,000 people, has 1000 hotels worldwide, and has revenues of ~$6 billion
I'm not saying AirBNB can't be huge one day, but a $2B valuation... wow.
Starwood employs 150,000 people, has 1000 hotels worldwide, and has revenues of ~$6 billion
I'm not saying AirBNB can't be huge one day, but a $2B valuation... wow.
If it takes Starwood 150,000 people to make $6B, and AirBnB can make hundreds of millions with hundreds of people, I think it's pretty clear which is headed to a bigger valuation.
is the valuation high? potentially, but this is not a metric that will tell you anything at all about that
The valuation is high, but it isn't unreasonable. Also I view AirBnB as having a low risk of falling out of fashion, unlike Zynga or Facebook.
Looks like they charge a 3% fee meaning a night @ $100 would bring in $3 of revenue (not profit). At 30M nights that's $90M in revenue, putting the $2B valuation at 22.2x revenue... seems slightly unreasonable (at least not a valuation that public markets are likely to put on it). Thoughts?
Your numbers start to look a lot better at a 10% fee instead of a 3% fee.
The total airbnb fee on a stay is about 12% (lets assume 9% avg guest fee and 3% host fee). But roughly 3% goes to credit card processing fees and then you have to deal with paying out in countries like Brazil where paypal and ACH aren't viable options. Lets just net it out to 9% for discussion purposes. Average price per booked night when I worked there was $100+.
If you do the same math as the post above then revenue would hypothetically be $270MM, as a revenue multiplier the range we're talking about begins to seem possible for a company on this trajectory with organic growth.
I have a vested interest in a high valuation, but having seen the growth from when I first joined (feb 2011, celebrated 1MM nights booked the first week I was there) to now its really unbelievable - true hockeystick growth.
see: (1) network effects (2) organic demand
It might not seem like it, but theres a difference.