I feel like this is missing a really important factor: how likely are guests to use airbnb again after staying at a listing?
A listing could look great online and receive a lot of bookings (so high LTV), but ultimately drive users away from the platform.
A certain ad platform I worked on cared a lot about this - offensive ads could get you to quit the site altogether. You might want to count every ad as positive for the company since you make money, but some might actually be negative expected value! As a side note, I think this is a really undermeasured problem. There are many sites I won't use because the ads are so overwhelming or are often offensive.
avidiax 3 hours ago [-]
> A listing could look great online and receive a lot of bookings (so high LTV), but ultimately drive users away from the platform.
I am precisely this kind of churned customer. I have personally booked maybe 3 AirBNB stays, and stayed with family in them on other occasions. The units I pick are always well-reviewed.
But in the cities I've stayed in (LA, SF, Rome), the price is really no cheaper than a hotel, and the quality is extremely variable. You have to really carefully read those 5-star guest reviews to read between the lines.
And you feel pressured not to leave a negative review, as that would negatively impact your ability to book in the future, since the hosts (I have heard) can see your average review score.
My impression has been that AirBNB's customers are actually the hosts. You, the guest, are an expendable commodity. You will use AirBNB until you have a severe enough problem, and experience them siding with the host over you. Then you'll be churned permanently, and by force if you do a chargeback.
If I were going to disrupt AirBNB, I'd offer hosts a better percentage with the requirement that the experience is standardized and high-quality. There would be an in-unit noise & vibration sensor, reporting directly in the app. 24 hour check-in and check-out. A minimum set of amenities, minimum WiFi speed. The bedding would be standard. Cleaning fee standard. Every unit subject to a surprise multi-point inspection at least once per year. Essentially, make it no worse than an average hotel, and maybe some units as good or better than high end hotels.
secabeen 3 hours ago [-]
> If I were going to disrupt AirBNB, I'd offer hosts a better percentage with the requirement that the experience is standardized and high-quality.
This is an interesting idea, but it puts the quality level way above what I want to pay for. Hotels are anti-septic and cold. I like staying in an apartment that feels like someone actually lives there. I don't mind a few dust-bunnies under the couch, nor a little dirt behind the toilet. It's even better when the kitchen is fully stocked, including a selection of non-perishable food (think cooking oil, salt, pepper, maybe a bag of ground coffee and a box of pasta.) Sure, the sheets and towels should be freshly laundered, but beyond that, I don't want much.
AirBNB allowed me to pay less to get a more human-feeling space. Hotels are like McDonalds, they are designed for the regular customer who wants to get that Hilton-feeling, regardless of if they are in Wichita or Cairo. I want to feel like I'm in Cairo, and if that means that I'm in a mud brick house with a single bathroom, no A/C, and no daily housekeeping that's great! AirBNB opened those worlds to us as travelers, in a way that hotel chains never did.
thefounder 3 hours ago [-]
I think that's more common in other parts of the world. (i.e. getting places that people actually live in).In Europe most/all of the apartments I've stayed in are basically business apartments (more or less).
You don't feel that someone lives there because nobody actually lives there. It's like a long term rental apartment that in best case scenario someone is using as a savings/investment vehicle but on short term. "Worst case" it's part of an apart-hotel.
When I travel as part of a large group(i.e. more than 3 people) a short term apartment is great because we need a big affordable space (i.e. someone may sleep on the couch and we don't want the hotel "greetings & house keeping" experience) but nevertheless I don't want or expect a dirty place in any way, shape or form be it in Cairo or somewhere else. I'm pretty sure there are people living in less than sanitary conditions all over the world including Western Europe and the U.S. That doesn't mean I have interest in experiencing that kind of "living/sleeping".
All that being said I've stopped using Airbnb years ago. It seems a broken system. For short term rentals/apartments Booking.com is the only sane choice(IMHO).
secabeen 2 hours ago [-]
> In Europe most/all of the apartments I've stayed in are basically business apartments (more or less). It's like a long term rental apartment that in best case scenario someone is using as a savings/investment vehicle but on short term.
If that the only thing AirBNB offered, I would have much less interest.
> I'm pretty sure there are people living in less than sanitary conditions all over the world including Western Europe and the U.S. That doesn't mean I have interest in experiencing that kind of "living/sleeping".
Thankfully, AirBNB doesn't have to be all things to all people. As long as there are enough people like me to keep them afloat, they can provide a product that I am happy with, and you can stay at hotels that are immaculately clean.
I do hate the way that many AirBNB hosts have made hosting a business, and would fully support a limit on the number of listings per host. People renting out a space in their house, or a vacation rental in a vacation destination that they also stay in too is fine. People buying 3 or more apartments to rent them out (taking them off the long-term rental market) is terrible, and should be prohibited.
listenallyall 2 hours ago [-]
> My impression has been that AirBNB's customers are actually the hosts
Yes for sure. Avg # of transactions per host dwarfs avg # of transactions per guest. Same with revenue. A frustrated host who pulls a unit (often, multiple units) off the platform is much more detrimental than an individual customer leaving the platform.
1 hours ago [-]
munro 4 hours ago [-]
No model is perfect, but some are useful. Their "baseline LTV" looks at the sum of listings on their platform (plus other features), then tries to forecast the next 365 days — so this should indirectly capture people coming and going. I think their cannibalization model is quite clever as well.
Going deeper with modeling users might yield some tighter estimates, but I imagine this gets estimates far closer than some simple accounting formula, and likely helpful for budgeting a year out — but it would have been nice to have seen some performance metrics.
mmasu 4 hours ago [-]
I also think the cannibalization model is clever. The baseline model is however a bit underwhelming,
as bookings can be misleading by themselves - you have cancellations, impressions,
and so forth. For example if you only look at bookings in next 365 days, new listings will be penalized. But as you said no model is perfect :-)
MajimasEyepatch 6 hours ago [-]
In the case of Airbnb, wouldn't that show up in the listing's reviews, requests for refunds, etc. and ultimately drive down the listing's LTV? Nobody leaves reviews on an ad, and I imagine that very few users report inappropriate ads, so you can only measure that indirectly. But if somebody books an Airbnb and has a bad experience, they are much more likely to give you direct feedback about it.
maxrmk 5 hours ago [-]
I think it could show up in those other places, but probably isn't fully captured?
Imagine an airbnb that's great for most guests but absolutely terrible for 1 in every 5, so bad that they quit airbnb. Maybe it's next to a music venue, so every once in a while it's very loud.
It's possible it could maintain a decent average star rating and LTV as described in the article but actually have negative (real) lifetime value for airbnb if the 1 in five that they lose would have spent a lot of money on the platform otherwise.
Nextgrid 4 hours ago [-]
Bad reviews are often moderated away and refund requests are stonewalled (and few people know about chargebacks so that isn't factored in). It is easier for the platform to acquire guests than hosts, so the platform takes the side of hosts.
Edit: at least that was the situation a couple of years ago. A host below now reports that the situation has changed and they take the side of the guests; however, either way it's open to abuse no matter which side they take.
The issue is that in a marketplace where both sides can be dishonest, the only way to ensure quality is to do spot checks by trusted actors (aka company employees) where the penalties for failing such a check are dissuasive enough that it becomes more profitable to play by the rules.
This is similar to how law enforcement is supposed to operate - the reason the penalty for theft (for example) is more than merely returning the stolen items is that since law enforcement can't observe everyone all at once, the penalty needs to be enough of a deterrent to make the bad behavior unprofitable overall, to discourage it even in cases where law enforcement isn't there to witness it and enforce said law.
lurk2 5 hours ago [-]
I had this experience years ago. The first place I ever rented in had Wi-Fi that didn’t work and after about a week the water stopped working. I cancelled my booking through support and the owner called me 3 or 4 times on WhatsApp and then left me a bad review. The second place had a shower that didn’t drain and the washing machine flooded the apartment one evening. The third place had black mold growing out of the kitchen ceiling. I tried to get them to waive the cleaning fee over it, but the owner claimed he had told me about it already and refused to do anything. When I left, he told me he had written me a good review and expected one in return. I pointed out that he had done nothing to remedy the mold issue and then posted my own review, and found that in his review he had accused me of bringing prostitutes and drugs into the apartment (which I did not).
It was nominally cheaper to travel this way, but for my next trip I’ll be staying in hotels.
bombcar 3 hours ago [-]
This is how things like Airbnb (and ebay) die - the hosts and sellers know all the tricks and so the buyers just leave; it’s not worth the hassle.
nothercastle 3 hours ago [-]
The eBay experience has improved dramatically. Its far better than Amazon 3rd party
listenallyall 2 hours ago [-]
Good point and it affects far more than just Airbnb. I'm sure some companies internal ROI for app notifications is universally positive... but when you send me 10 app notifications a week for a product or service I only purchase occasionally, I'm uninstalling the app. Obviously I'm in the minority because the app still has millions of users but hopefully others have turned notifications off.
maxrmk 2 hours ago [-]
Yeah I think about this model weirdly often.
iambateman 2 hours ago [-]
Airbnb’s original promise was magical, thrilling, interesting - get to stay in unusual places that are full of charm and possibility.
But that promise was broken for me when Commaleta played back the video of her front door camera and counted that we had 10 people walk in her door, not eight. She proceeded to accuse us of throwing a party, when we absolutely did not, and tried to charge us $1000 extra dollars.
At that point, I decided that Airbnb’s hosts were too much of a wildcard in most travel situations.
By the way, the story above is from 10 years ago and I will never forget her name for the rest of my life…she turned what should’ve been a relaxing, beautiful week into a miserable arbitration process. It’s hard for ABNB to succeed long term when one experience like that can ruin everything.
kreyenborgi 6 hours ago [-]
Man I'm so sick of trying to find something on Airbnb only to discover by the time I order that the price has doubled.
Airbnb these last years went from feeling fresh and adventurous to scammy and dubious
ceejayoz 6 hours ago [-]
Use the .com.au variant to find listings, as Australian law requires they list the full price, inclusive of tax and fees.
nickjantz 3 hours ago [-]
Meh, they're just complaining because it's cool to whine about AirBNB online these days, US based AirBNB has had this feature for quite awhile now.
sabellito 4 hours ago [-]
Use booking.com, better in every way and customer support that won't stonewall you.
hankchinaski 2 hours ago [-]
Booking is a total scam fake photos fake listings fake reviews
9283409232 4 hours ago [-]
Booking.com is awful. Anyone can make a listing on Booking.com for places that don't exist. Airbnb at least makes an effort to verify the building is real.
sabellito 3 hours ago [-]
I have done dozens of reservations and never heard of anything like that.
Maybe don't book places with fewer than 5 reviews? Same goes to airbnb or any platform that allows for anyone to publish a listing.
On the other hand had one severe issue with a booking on airbnb and they essentially told me to go fuck myself.
philipwhiuk 4 hours ago [-]
If anything the flight bit is even worse.
carlosjobim 4 hours ago [-]
I've made thousands of reservations work booking.com, this does not happen.
ambicapter 1 hours ago [-]
Thousands? Personal reservations?
9283409232 3 hours ago [-]
I guess if its never happened to you its never happened at all.
philipwhiuk 4 hours ago [-]
Worse is when your booking is confirmed but then cancelled a week before you go, at which point all the prices are much higher
sabellito 3 hours ago [-]
Insane that they allow that. Maybe it's an option the host can set on the listing?
Booking, as far as I know, straight up doesn't allow hosts to cancel. Recently, a host sent me a message begging me to cancel my booking because they really couldn't be there to receive me.
marcandre 2 hours ago [-]
Hosts can cancel, but they are subject to their cancelation penalties (according to the level they've chosen for guests) plus there is an automatic "review" added stating that "This host cancelled a booking X days in advance". Unless X is very big, I run away from those listings.
game_the0ry 2 hours ago [-]
I wonder if you could use the same methodology to value potential investments in short term rentals.
esafak 6 hours ago [-]
I would have liked more discussion on handling uncertainty; how big is it, how well calibrated is it, how are they approaching variance reduction, how do they reduce the predictive distribution into decisions, etc. And no discussion of causal inference in the marketing section.
huevosabio 6 hours ago [-]
Mega-tangent: As a host, I feel compelled to rant about Airbnb whenever they come up in a discussion.
The last 2 years they have _really_ moved to squeeze the hosts. The customer service has been demolished and they seem to have taken a stance of "the guest is always right". I've spent countless hours going through their customer service as a super host, so I know I have a decent amount of anecdata.
My suspicion is that they found themselves with more supply than demand, so they are "improving the guest experience" at the expense of the hosts. Since they are a quasi-monopoly (depends on the market) it makes sense for them to prune supply in exchange for better guest experience, a full market approach makes less sense since they make money in proportion to the total amount of money transacted (which as a monopoly it can optimize for in the way a free market can't).
But I think this will blowback sooner or later. The biggest value for an Airbnb guest is the review system that allows you to have some degree of certainty of what you are getting. The biggest value for a host is the massive global audience. But guests and hosts, pay a steep fee (17%!) for this. For well-reviewed, long-living stays (like mine :)), paying 17% is way too much to access this audience: the listing already has an online record that provides that quality assurance for the guest, and the host could spend that money on advertising.
So that's what many of us are doing, moving to PMS + paid advertising / SEO to diversify on distribution channels. I think there's an opportunity for capturing that semi-pro host market and bundling them in a similar offering that 1) doesn't squeeze them, 2) offers a proper PMS software, and 3) charges a flat fee instead of a variable rate.
jeofken 5 hours ago [-]
PMS as in Pantone Matching System or Premenstrual Syndrome?
AirBNB can be equally frustrating for users as well.
Recently ended up at night in a new city in northern Japan where the host told me the listing was at a different address, where I found nothing, and got only radio silence from the host.
Every hotel room in town was occupied that night.
Airbnb support, seemingly in far away India, told me to try contacting the host, and that was that.
Also recently stayed at a place with a dog that shat inside due to the owner not taking them out; due to politeness no one had complained in the reviews.
Also Airbnb lists one price but when booking it always ends up being way more with more fees added.
I’m using hotels.com with a filter for “has kitchen” these days, which was the only reason I used Airbnb in the first place
huevosabio 3 hours ago [-]
PMS as property managements software :).
And yes, I use Airbnb as a guest as well, but I gauge the risk of having a bad host into the decision making.
We also get all type of horror stories from guests that had a bad experience and found themselves trying to find a last minute place to stay.
The problem is that the Airbnb app heavily disincentivizes "professionalization". They have a small cartel of PMS providers that can actually hit their API. I can't build my own systems on top of their API, I have to go through a middle man or use the their crappy app.
Their app is so incredibly obtuse that it puzzles me how people shower Airbnb as a "great product design company". It's a beautiful app sure, but incredibly clunky. It's like a call center phone menu made into an art piece.
appreciatorBus 5 hours ago [-]
PMS - Property Management System, aka what actual hotels use to manage room inventory, bookings, etc.
IMO most of the things that people like about AirBnB vs hotels is downstream of the failed experiment of urban planning. If we want hotel operators willing to "spend" floorspace on kitchens and other niceties, then legal floorspace can't be scarce or special, but most of the current planning regime is oriented around enforcing limits on floorspace. Ditto for having options of places to stay that aren't tourist traps or commercial areas.
ghaff 4 hours ago [-]
I suppose hotels can have a few rooms with kitchens but I'm guessing a vanishingly few people care about kitchens when traveling outside of maybe a microwave and a small refrigerator. AirBnB that are larger (e.g. houses) can also be nice for groups but that's more outside of cities than in a city center. Hotels tend to optimize for the 90% case.
Where I'm staying at the moment is a "serviced apartment" and does have a couple burners but that's unusual and I mostly stay here because I like the location in London.
secabeen 3 hours ago [-]
A large fraction of families traveling value the kitchens (leftovers, kid breakfasts, not having to eat restaurant food for every meal, when all the kids want is Kraft Mac&Cheese, etc.) and the common living spaces (kids go to bed early). I hate traveling with my family and being stuck in a hotel room (or two!). When I'm traveling alone or with just adults, I can be out all day and only use my hotel room for sleeping, but with a diverse set of ages traveling, we often hang out in the living room while someone naps, or my kids will be done with touristing by 3pm and we need somewhere to be until dinnertime.
You see this in vacation destinations like Hawaii and Ski towns; there is a significant fraction of accommodations that are Condos, because you need a place to hang. AirBNB brought that to urban areas by sub-letting apartments, when hotel operators only provided maximally-dense sleeping-focused options; multi-bedroom hotel rooms with living rooms and kitchens largely did not exist in major city centers.
ghaff 2 hours ago [-]
My point was that this is a minority preference in most paces.
appreciatorBus 1 hours ago [-]
If it truly is a minority preference, then we need a way to square that with all the people saying they book AirBnB's instead of hotels because of the kitchens. :)
seany 2 hours ago [-]
This is the primary reason I use Airbnb and it's equivalents. My typical traveling party is 4 adults, 3 kids, and 1-2 dogs most of those people have a preference to cook rather than eat out. Accommodating that in a hotel is a disaster unless you get an ultra low price of a double suite or something.
huevosabio 3 hours ago [-]
Yes, this is spot on. The more lax the regulations for hotels, the less appealing Airbnb is.
appreciatorBus 1 hours ago [-]
Sure tho TBF I wouldn't use the word lax - it implies there's something dangerous or untoward going on and we are choosing to let it slide. :)
Rather since the rules limiting hotel size, locations, quantity etc have nothing to do with safety and everything to do with class, exclusivity, and segregation, we can jettison them confidently without worrying that we are being too lax about anything important :)
gregorymichael 2 hours ago [-]
AirBnB and Uber both have a dynamic where the host/driver has often taken out a loan and modified their lifestyle to depend on this income, which makes them the easier party to squeeze.
mtlynch 5 hours ago [-]
>So that's what many of us are doing, moving to PMS + paid advertising / SEO
For those of us not in this space, what does PMS mean?
lurk2 5 hours ago [-]
> Property Management Systems (PMS) or Hotel Operating System (HOS), under business, terms may be used in real estate, manufacturing, logistics, intellectual property, government, or hospitality accommodation management. They are computerized systems that facilitate the management of properties, personal property, equipment, including maintenance, legalities and personnel all through a single piece of software.
gsempe 5 hours ago [-]
PMS as Property Management System
carlosjobim 4 hours ago [-]
You are yourself in the business of squeezing, so any company that will be willing to deal with you will have the aim to squeeze you.
9283409232 4 hours ago [-]
I would love to not use Airbnb as a consumer but there is no real alternative here. I hear a lot of people say that Airbnb is just as expensive as hotels but I just don't see it. I'm looking at traveling and a hotel in the area is $900 to $1200 while Airbnbs are $500 to $800.
barbazoo 5 hours ago [-]
> paying 17% is way too much
Have you considered increasing the cleaning fee to recoup some of that money? /s
hbsbsbsndk 5 hours ago [-]
[flagged]
RandomBacon 5 hours ago [-]
An AirBNB host is not a landlord.
Without landlords, you have no rental properties and everyone who can't afford to purchase their residence outright would have to find another option whatever that might be.
(I have never used AirBNB.)
bavent 5 hours ago [-]
Without landlords we wouldn’t have a chunk of the housing supply held captive as investment, driving costs out of reach for most of the non-HN-reading audience.
3 hours ago [-]
RandomBacon 4 hours ago [-]
So a "damned if you do, damned if you don't" kind of situation?
doctorpangloss 5 hours ago [-]
This isn't an LTV model, it's a regression model. Is it even good? Doesn't seem so.
Maybe their folks need to punch "LTV" into Google Scholar.
And also, is it even actionable?
> For example, suppose we run a marketing campaign that provides hosts with tips on how to successfully improve their listings
Right guys. “Marketing-induced incremental LTV” indeed.
cityzen 3 hours ago [-]
Stopped reading at, “At Airbnb, we always strive to provide our community with the best experience.”
epolanski 4 days ago [-]
Why do they publish blogposts on such a lame paywalled website though...
JohnScolaro 5 hours ago [-]
I was wondering that too!
Surely Airbnb - a company that runs a website - has the capability to put a text post on their own website. Then they'd own the content, and people looking for it could find it easier? It's not a revolutionary concept either, Facebook has one:
The reason for this blog post is "recruit engineers". Not every engineer is going to visit blog.airbnb.com, but presumably a lot of them are already on Medium.
They even close the article with,
> We continue to solve interesting problems around LTV every day (and as more insights come up, we’ll keep sharing them on our blog). Can you see yourself making an impact here? If so, we encourage you to explore the open roles on our team.
These blogs are always about recruiting.
philipwhiuk 4 hours ago [-]
Why would I pay for a paywall to read a job ad?
6 hours ago [-]
josefritzishere 4 days ago [-]
Seems pretty consistent with their revenue model.
tomhow 6 hours ago [-]
Is this post paywalled for you?
Or is there just a signup/login banner that you can dismiss?
If there's a paywall we'll post a workaround at the top.
A listing could look great online and receive a lot of bookings (so high LTV), but ultimately drive users away from the platform.
A certain ad platform I worked on cared a lot about this - offensive ads could get you to quit the site altogether. You might want to count every ad as positive for the company since you make money, but some might actually be negative expected value! As a side note, I think this is a really undermeasured problem. There are many sites I won't use because the ads are so overwhelming or are often offensive.
I am precisely this kind of churned customer. I have personally booked maybe 3 AirBNB stays, and stayed with family in them on other occasions. The units I pick are always well-reviewed.
But in the cities I've stayed in (LA, SF, Rome), the price is really no cheaper than a hotel, and the quality is extremely variable. You have to really carefully read those 5-star guest reviews to read between the lines.
And you feel pressured not to leave a negative review, as that would negatively impact your ability to book in the future, since the hosts (I have heard) can see your average review score.
My impression has been that AirBNB's customers are actually the hosts. You, the guest, are an expendable commodity. You will use AirBNB until you have a severe enough problem, and experience them siding with the host over you. Then you'll be churned permanently, and by force if you do a chargeback.
If I were going to disrupt AirBNB, I'd offer hosts a better percentage with the requirement that the experience is standardized and high-quality. There would be an in-unit noise & vibration sensor, reporting directly in the app. 24 hour check-in and check-out. A minimum set of amenities, minimum WiFi speed. The bedding would be standard. Cleaning fee standard. Every unit subject to a surprise multi-point inspection at least once per year. Essentially, make it no worse than an average hotel, and maybe some units as good or better than high end hotels.
This is an interesting idea, but it puts the quality level way above what I want to pay for. Hotels are anti-septic and cold. I like staying in an apartment that feels like someone actually lives there. I don't mind a few dust-bunnies under the couch, nor a little dirt behind the toilet. It's even better when the kitchen is fully stocked, including a selection of non-perishable food (think cooking oil, salt, pepper, maybe a bag of ground coffee and a box of pasta.) Sure, the sheets and towels should be freshly laundered, but beyond that, I don't want much.
AirBNB allowed me to pay less to get a more human-feeling space. Hotels are like McDonalds, they are designed for the regular customer who wants to get that Hilton-feeling, regardless of if they are in Wichita or Cairo. I want to feel like I'm in Cairo, and if that means that I'm in a mud brick house with a single bathroom, no A/C, and no daily housekeeping that's great! AirBNB opened those worlds to us as travelers, in a way that hotel chains never did.
You don't feel that someone lives there because nobody actually lives there. It's like a long term rental apartment that in best case scenario someone is using as a savings/investment vehicle but on short term. "Worst case" it's part of an apart-hotel.
When I travel as part of a large group(i.e. more than 3 people) a short term apartment is great because we need a big affordable space (i.e. someone may sleep on the couch and we don't want the hotel "greetings & house keeping" experience) but nevertheless I don't want or expect a dirty place in any way, shape or form be it in Cairo or somewhere else. I'm pretty sure there are people living in less than sanitary conditions all over the world including Western Europe and the U.S. That doesn't mean I have interest in experiencing that kind of "living/sleeping".
All that being said I've stopped using Airbnb years ago. It seems a broken system. For short term rentals/apartments Booking.com is the only sane choice(IMHO).
If that the only thing AirBNB offered, I would have much less interest.
> I'm pretty sure there are people living in less than sanitary conditions all over the world including Western Europe and the U.S. That doesn't mean I have interest in experiencing that kind of "living/sleeping".
Thankfully, AirBNB doesn't have to be all things to all people. As long as there are enough people like me to keep them afloat, they can provide a product that I am happy with, and you can stay at hotels that are immaculately clean.
I do hate the way that many AirBNB hosts have made hosting a business, and would fully support a limit on the number of listings per host. People renting out a space in their house, or a vacation rental in a vacation destination that they also stay in too is fine. People buying 3 or more apartments to rent them out (taking them off the long-term rental market) is terrible, and should be prohibited.
Yes for sure. Avg # of transactions per host dwarfs avg # of transactions per guest. Same with revenue. A frustrated host who pulls a unit (often, multiple units) off the platform is much more detrimental than an individual customer leaving the platform.
Going deeper with modeling users might yield some tighter estimates, but I imagine this gets estimates far closer than some simple accounting formula, and likely helpful for budgeting a year out — but it would have been nice to have seen some performance metrics.
Imagine an airbnb that's great for most guests but absolutely terrible for 1 in every 5, so bad that they quit airbnb. Maybe it's next to a music venue, so every once in a while it's very loud.
It's possible it could maintain a decent average star rating and LTV as described in the article but actually have negative (real) lifetime value for airbnb if the 1 in five that they lose would have spent a lot of money on the platform otherwise.
Edit: at least that was the situation a couple of years ago. A host below now reports that the situation has changed and they take the side of the guests; however, either way it's open to abuse no matter which side they take.
The issue is that in a marketplace where both sides can be dishonest, the only way to ensure quality is to do spot checks by trusted actors (aka company employees) where the penalties for failing such a check are dissuasive enough that it becomes more profitable to play by the rules.
This is similar to how law enforcement is supposed to operate - the reason the penalty for theft (for example) is more than merely returning the stolen items is that since law enforcement can't observe everyone all at once, the penalty needs to be enough of a deterrent to make the bad behavior unprofitable overall, to discourage it even in cases where law enforcement isn't there to witness it and enforce said law.
It was nominally cheaper to travel this way, but for my next trip I’ll be staying in hotels.
But that promise was broken for me when Commaleta played back the video of her front door camera and counted that we had 10 people walk in her door, not eight. She proceeded to accuse us of throwing a party, when we absolutely did not, and tried to charge us $1000 extra dollars.
At that point, I decided that Airbnb’s hosts were too much of a wildcard in most travel situations.
By the way, the story above is from 10 years ago and I will never forget her name for the rest of my life…she turned what should’ve been a relaxing, beautiful week into a miserable arbitration process. It’s hard for ABNB to succeed long term when one experience like that can ruin everything.
Airbnb these last years went from feeling fresh and adventurous to scammy and dubious
Maybe don't book places with fewer than 5 reviews? Same goes to airbnb or any platform that allows for anyone to publish a listing.
On the other hand had one severe issue with a booking on airbnb and they essentially told me to go fuck myself.
Booking, as far as I know, straight up doesn't allow hosts to cancel. Recently, a host sent me a message begging me to cancel my booking because they really couldn't be there to receive me.
The last 2 years they have _really_ moved to squeeze the hosts. The customer service has been demolished and they seem to have taken a stance of "the guest is always right". I've spent countless hours going through their customer service as a super host, so I know I have a decent amount of anecdata.
My suspicion is that they found themselves with more supply than demand, so they are "improving the guest experience" at the expense of the hosts. Since they are a quasi-monopoly (depends on the market) it makes sense for them to prune supply in exchange for better guest experience, a full market approach makes less sense since they make money in proportion to the total amount of money transacted (which as a monopoly it can optimize for in the way a free market can't).
But I think this will blowback sooner or later. The biggest value for an Airbnb guest is the review system that allows you to have some degree of certainty of what you are getting. The biggest value for a host is the massive global audience. But guests and hosts, pay a steep fee (17%!) for this. For well-reviewed, long-living stays (like mine :)), paying 17% is way too much to access this audience: the listing already has an online record that provides that quality assurance for the guest, and the host could spend that money on advertising.
So that's what many of us are doing, moving to PMS + paid advertising / SEO to diversify on distribution channels. I think there's an opportunity for capturing that semi-pro host market and bundling them in a similar offering that 1) doesn't squeeze them, 2) offers a proper PMS software, and 3) charges a flat fee instead of a variable rate.
AirBNB can be equally frustrating for users as well. Recently ended up at night in a new city in northern Japan where the host told me the listing was at a different address, where I found nothing, and got only radio silence from the host. Every hotel room in town was occupied that night. Airbnb support, seemingly in far away India, told me to try contacting the host, and that was that.
Also recently stayed at a place with a dog that shat inside due to the owner not taking them out; due to politeness no one had complained in the reviews.
Also Airbnb lists one price but when booking it always ends up being way more with more fees added.
I’m using hotels.com with a filter for “has kitchen” these days, which was the only reason I used Airbnb in the first place
And yes, I use Airbnb as a guest as well, but I gauge the risk of having a bad host into the decision making.
We also get all type of horror stories from guests that had a bad experience and found themselves trying to find a last minute place to stay.
The problem is that the Airbnb app heavily disincentivizes "professionalization". They have a small cartel of PMS providers that can actually hit their API. I can't build my own systems on top of their API, I have to go through a middle man or use the their crappy app.
Their app is so incredibly obtuse that it puzzles me how people shower Airbnb as a "great product design company". It's a beautiful app sure, but incredibly clunky. It's like a call center phone menu made into an art piece.
IMO most of the things that people like about AirBnB vs hotels is downstream of the failed experiment of urban planning. If we want hotel operators willing to "spend" floorspace on kitchens and other niceties, then legal floorspace can't be scarce or special, but most of the current planning regime is oriented around enforcing limits on floorspace. Ditto for having options of places to stay that aren't tourist traps or commercial areas.
Where I'm staying at the moment is a "serviced apartment" and does have a couple burners but that's unusual and I mostly stay here because I like the location in London.
You see this in vacation destinations like Hawaii and Ski towns; there is a significant fraction of accommodations that are Condos, because you need a place to hang. AirBNB brought that to urban areas by sub-letting apartments, when hotel operators only provided maximally-dense sleeping-focused options; multi-bedroom hotel rooms with living rooms and kitchens largely did not exist in major city centers.
Rather since the rules limiting hotel size, locations, quantity etc have nothing to do with safety and everything to do with class, exclusivity, and segregation, we can jettison them confidently without worrying that we are being too lax about anything important :)
For those of us not in this space, what does PMS mean?
Have you considered increasing the cleaning fee to recoup some of that money? /s
Without landlords, you have no rental properties and everyone who can't afford to purchase their residence outright would have to find another option whatever that might be.
(I have never used AirBNB.)
Maybe their folks need to punch "LTV" into Google Scholar.
And also, is it even actionable?
> For example, suppose we run a marketing campaign that provides hosts with tips on how to successfully improve their listings
Right guys. “Marketing-induced incremental LTV” indeed.
Surely Airbnb - a company that runs a website - has the capability to put a text post on their own website. Then they'd own the content, and people looking for it could find it easier? It's not a revolutionary concept either, Facebook has one:
https://engineering.fb.com/
Wait, Airbnb already has one?
https://airbnb.io/
Genuinely confusing.
Distribution.
The reason for this blog post is "recruit engineers". Not every engineer is going to visit blog.airbnb.com, but presumably a lot of them are already on Medium.
They even close the article with,
> We continue to solve interesting problems around LTV every day (and as more insights come up, we’ll keep sharing them on our blog). Can you see yourself making an impact here? If so, we encourage you to explore the open roles on our team.
These blogs are always about recruiting.
Or is there just a signup/login banner that you can dismiss?
If there's a paywall we'll post a workaround at the top.