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Home / Business / What is Airbnb before its IPO? – Quartzy

What is Airbnb before its IPO? – Quartzy

Until a few years ago, the phrase "getting airbnb" meant one thing: sleeping in the apartment, in the house, or in a guest room of a stranger, probably at a reasonable price compared to nearby hotels.

But in 2019, things are not that easy. Eleven years after the company was founded in 2008 – and with endless speculation about the timing of the IPO – the significance of this expression has multiplied.

Sure, the original offer is still standing. "Getting an Airbnb" (or "Airbnbing" which is now a verb) could also mean staying on a "plus" list, defined as "a selection of homes that have been tested for quality and design." Or yours Quotation could be offered by a verified superhost that may or may not have activated Instant Book, a feature that eliminates the clumsy but sometimes charming step of communicating to your potential host prior to booking.

With Airbnb, you may have a fully equipped vacation with multiple rooms rental or villa, where your "host" is likely to be a person employed by a rental agency. You could be in an old school guesthouse or a real bed and breakfast because Airbnb invited them to join the platform. And maybe it's surprising that you may be in the kind of accommodation where Airbnb was originally thought of as the original and original alternative to a hotel room.

If you can book all these things and more on Airbnb, you should ask yourself: what is even these days Airbnb?

The bubbling language of enterprise technology is an end-to-end travel platform that combines where you stay, what you do and how you go, all in one place. "But as he did so, he moved farther and farther from what he was when his founders started them – literally with inflatable mattresses.

That's fine, of course. There was never a guarantee that Airbnb would remain as it once was – a clever, well executed and groundbreaking idea in the Halcyon days of the early sharing economy. Risk capital-driven growth requires that good ideas reach a precarious scale and that approach and mission must change. However, the transformation of Airbnb has made it less and less clear what the company itself wants to be.

Mama and Pop

Proof of how far Airbnb has come is the emergence of the term "Mama and Pop" as an Airbnb host. Although not formally used by Airbnb, the term has become an abbreviation for a normal person who occasionally rents out their own home or apartment, perhaps when they are not in town themselves or when they are ready to go to their own couch Sleep to Make Money

That the modern lexicon gives the hosts a nostalgic glow by using the platform as it was originally intended says. These days, Airbnb is routinely accused of being "professionalized" or being crawled by commercially motivated operators operating informal hotels (some in accordance with local regulations, others not). These hosts rarely interact with guests, critics say, and are far from providing the ideal of a "live-like-local" experience that makes Airbnb itself popular. The professionalism of Airbnb is also due to the fact that housing becomes prohibitive for locals by encouraging landlords to rent houses for an endless parade of short-term guests at higher rates than would be possible for longer-term tenants.

That the modern lexicon gives a nostalgic glow to hosts who use the platform as it should originally be used, it says.

Did Airbnb lose his soul? One way to fix this would be to ask a simple question: what percentage of all entries on Airbnb contain hosts with a single entry? What percentage of hosts have more than five? When Quartz asked a company spokesman, we did not get a clear answer. He just commented that the company is "letting more professional hospitality entrepreneurs enter our community just because they want to access our global network of hosts and guests and provide the kind of high quality and unique experience that guests enjoy

Reuters / Bobby Yip

You too can "live like a local."

On a more local basis, the company has disclosed portions of this data in the past where they represent a rhetorical point. For example, in February, Airbnb told me that 73% of hosts in Lisbon, Portugal, have a single listing, while only 9% have more than four, but even these figures are difficult to deduce – for example, they do not highlight how many entries the larger operators have and what percentage of the total of these 9% are the operators who are "professional" – they can each have dozens of them. for everything we know.

Airbnb's unwillingness to share these figures, and the general reluctance to publish much data on demand, make it difficult to value the company for more than a decade as it prepares for an IPO. Most data analysis on this key question about their offerings comes from sources with strong interests: either those who consider the company as competitors (hotels and their lobbying groups), or companies that want to support the growth of the rental housing industry. If Airbnb reaches an assumed double-digit billion IPO, this information may become more transparent: investors are likely to expect solid responses to Airbnb's revenue from people's vacant rooms.

When Airbnb floats on the stock exchange An alleged double-digit billions in value, investors are likely to want solid answers on how much of Airbnb's revenue comes from people's vacant rooms.

However, there are some strong signs that the website is becoming increasingly professional. AirDNA, the provider of market knowledge for the holiday industry, is one such source that is specifically suited to Airbnb and holiday rentals. The company gets its data by "scratching" the Airbnb website almost every day and analyzing the calendar, for example, to determine the number of entries. (It is noteworthy that Airbnb says that while crammed data can serve a purpose, it may not be accurate and may lead to "unreliable conclusions that do not capture the complexity and nuance of the Airbnb community." [19659002] AirDNA shares data with Quartz, which shows that since January 2016, multi-listing hosts (including hotel deals and other traditional hospitality offerings on the platform) have grown faster in the US than single-listing hosts, the speaker pointed out Many of these professional or commercial multi-list operators are leasing companies rather than sole traders.

A report from CBRE Hotels, a commercial real estate services company from 2017, also relied on AirDNA-discarded companies for data on Airbnb entries in 13 US It found that 32% of all revenue, the Airbnb scored in the US from October 2015 through September 2016, from multi-unit hosts (defined as hosts that "rent two or more distinct, complete residential units in the same month"). and revenue growth in this category increased 89% year over year in the 13 markets studied.

AirDNA founder and CEO Scott Shatford argues that increasing professionalization is not necessarily a bad thing – and in many ways, consumer demand for "a more consistent, hotel-like experience," as Airbnb is mature.

He notes that the more professional an Airbnb host is, the more likely he is to comply with the rules that emerge in cities around the world – even though he said evidence supporting that claim is anecdote , He even went so far as to argue that these regulations, which should curtail Airbnb's influence on neighborhoods, may boost professionalization by making it too difficult for "mom and pop" hosts to rent out their homes.

"When you go To let a homeowner go to the town hall, wait three hours in line to get a permit for two weeks to rent his place while you are in Europe. They just will not do it. "

" If you will make a homeowner go to the town hall, wait three hours in line to get a permit for two weeks while they are in Europe. You just will not do it, right? "Shatford said. He argued that this dynamic "pushes down the little mom and pop". Airbnb hosts who find the process too difficult.

Airbnb itself did not respond to the question of whether the increased regulation in cities around the world was a driver of the host professionalization.

"Guerrilla War"

So, when Airbnb is inexorably professionalizing, losing its meager atmosphere, and adapting to local laws, why does not the company just accept its entire reputation as a company that has more listings than the first six hotel groups combined?

In part because this is not possible. Airbnb's unique home-sharing offer has been based since the first day on a practice that is questionable and, in some cases, completely illegal under the zoning, health and safety regulations of many cities (not to mention individual buildings) at best. Setting up a legal hotel or bed and breakfast business is a costly and time-consuming process. Airbnb's success, at least in part, is to give hosts a convenient way to ignore much of it.

AP / Paul Hawthorne

Does anyone live here?

Antipathy to Airbnb and the broader era of homesharing "Living Like a Native" has led the journeys initiated to a series of reactive regulations in cities around the world that are interfering with the company's basic practices. This includes the limitation of the total nights per year in which a property can be rented. The "whole house" ban Airbnbs is required if a host is present for stays of less than 30 days and the registration of the host in the city or state is required.

The Company is Busy In a recent piece by Wired titled "City-by-city block-by-block guerilla warfare," when it comes to tax, zone, and security laws ,

In fact, in the midst of all these urban resistances, the company is addressing the question of what a source in a recent play "Wired" (Paywall) has called "a city-by-city block-by-block guerrilla warfare," when it comes to regulations, tax, zone and security laws. (The taxes in question are those that the Airbnb hosts must collect from the guests and then transfer to the local coffers.) In the same way, hotels often have to charge the occupancy tax in addition to a room rate.) Much of the company's disagreement with the cities is not as proactive as Airbnb – which sees itself as a platform rather than an accommodation provider – should ensure that its hosts levy and pay these taxes.)

While Airbnb often emphasizes collaboration with city officials on many of these issues, it does They also fought (with varying degrees of success) with lawsuits in cities such as Boston, Miami, New York, and Palm Beach. Airbnb said in an email to Quartz that it has "committed to treating each city personally". As part of this effort, partnerships with more than 500 locations worldwide have been closed and taxes of one billion dollars have been transferred to governments.

"In this work, we have argued for reasonable rules that ordinary people can follow without having to hire a team of lawyers and accountants," Airbnb wrote. "There is no question that renting a room or renting a home is fundamentally different than running a hotel, and we think that rules and regulations should reflect that."

"While we do this work, we have advocates reasonable rules that are regular people can follow without hiring a team of lawyers and accountants. "

Josh Bivens, Director of Research at the Economic Policy Institute – and author of a recent literature review, stating that Airbnb's economic costs are likely to outweigh the benefits – but these tax treaties are still" voluntary "ad hoc Agreements that often do not reach the same level as the hotels that are legally required to pay. "The amount of data they provide to the tax authorities is less than that required by other commercial operators." For example, these agreements often hide the names of the hosts and the identification of the details before the tax authorities – a clear departure from the usual practice, "said a former Tax Commissioner Wired, which makes it difficult to confirm the payment of the correct tax.

Bivens added that these voluntary tax treaties could be a picture of compliance, even if the Airbnb hosts ignore other laws. "I think they hope that when they reach an agreement on tax, it means that they have a legal blessing even if we were not supposed to work the way they work on the zone front. "

It is obvious that for a company that is about to go billions of dollars before the stock market launch Stock market is a problem, perhaps Airbnb has recently taken some steps to make its product tastier

Can you still belong somewhere?

These steps cover the entire Experiences product. This is one way the company has diversified its offerings from controversial short-term lists to more enjoyable ceramics and baking classes (and even Instagram). Airbnb's recent acquisition of its boutique hotel booking platform, HotelTonight, provides Airbnb with the opportunity to include verified properties in its growing hotel inventory. This ensures a larger part of the entries that are regulated and taxed like hotels (as they are hotels).

Airbnb also launched a Friendly Building Program that would make more hosts aware of landlord tools, real estate managers and homeowners' associations that want to authorize and regulate Airbnb rentals in their buildings. In some cities where officials such as San Francisco have called for this, Airbnb has also wiped its platform off with listings that do not abide by the rules – although this has been rejected elsewhere or only incompletely.

"Magic Stays"

Even as Airbnb fights against urban regulations and is involved in lawsuits with cities around the world, it still seems to be appealing to the warm and blurred ethos of its early days of common economy maintain. In an email to Quartz, a spokesman used the terms "magical stays," "community instead of goods," and "a world where everyone can belong somewhere" to describe the mission of the company.

"The core of Airbnb has always been … and will remain so – our exceptional hosts who invite guests to their homes," the spokesperson wrote. "We have seen how hosting represents a commercial lifeline for hosts around the world. The support of our hosts will always be our focus. Some of these hosts may have multiple entries for various reasons: some share their entire home when out of town and a room in their home when they are present. Others may help manage homes for their friends and neighbors. "

The idea that a luxury condominium for business travelers served by a management company can still be" magical "is a bit absurd – IPO Airbnb is in an existential tangle, Bivens said. To completely professionalize – not to act differently than another hotelier giant like Marriott – many of the pop-up companies that built an "incomparable brand" would be wiped out ineffective.

I do not want to pretend to be a hotel business, a huge operation of unlicensed hotels in places where they are not allowed, "said Bivens. "On the other hand, if they are not really big, what do investors invest money for?"

The idea of ​​a luxury condominium for business travelers being served by a management company is absurd can still be "magical".

Airbnb's suffering fits into a broader context of the turbulent democratization of travel. Although Airbnb often draws attention to the considerable economic contribution and the concomitant tourists to the cities and tourism revenues around the world, the continuing crisis of the overcapacity has shown that such a thing is too much a good thing. While tourism revenue on paper looks good, these figures do not support the hidden costs that some residents have borne for this growth. It's cool when your neighbors make extra money by renting out their apartment or thriving local restaurants by attracting outsiders – but not so cool that you have to trudge your luggage in the bar every night, mistakenly skipped bouncers, and drunken house parties Week.

No one can deny that Airbnb has changed the face of modern travel in just eleven years. Nor is it undeniable that the concept of renting a local lounge is inextricably linked to Airbnb – even though competitors such as Booking.com and VRBO are building similar homesharing activities. Airbnb bas, however, is in some ways the victim of its own impressive success, from the start of a rent-your-air mattress to one of the largest travel companies in the world due to its meteorological changes.

"Getting an Airbnb" – a person's real home can still be great to be sure of But this Airbnb experience itself is not what it used to be. Nowadays, you may be instructed not to tell anyone living in the building that you are an Airbnb guest, as happened to me in New York and Paris. And when I see anti-Airbnb graffiti on the walls in a city like Lisbon or Barcelona, ​​I do not feel like a local. I feel that my holiday is at the expense of the locals. This is a problem that is difficult to solve with platitudes and branding.

It remains to be seen how Airbnb interrupts this separation while responding to investors. Bivens said, "In my opinion, the pure Wild West ethos that has dominated Airbnb's expansion so far is pushed so far that the pendulum will swing in the other direction. And if they can adapt and thrive while adhering to democratically passed laws and laws and taxes, they should get the chance.

As it turns out, creating a "world where everyone can belong" is easier said than done.

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