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My Thoughts on Airbnb

Updated: Apr 29, 2021


Airbnb is going and is becoming a disrupter in the hospitality industry which is why I have invested a portion of my money into them (stock ticker is ABNB). No more do you have to worry about disrupting your next room neighbor in a hotel and no more do you have to be confined to your hotel room. Airbnb has become far more popular, especially with the pandemic starting to fade away, because people are finding that Airbnb's provide a better experience. In fact even before the pandemic, there were Airbnb's that were in high demand for high profile events such as Coachella. Often times in these types of events, hotels hike up rates to capitalize on the increased demand whereas Airbnb is able to provide places to stay for cheaper. When you get a hotel the main reason why you get one is to be as close to the destination you are going to and Airbnb has become better at being in the epicenter of the action. Not only that, but more and more people are Airbnbing their homes as another source of income. The way I see it, Airbnb is a quadruple win. These are just a few reasons why I like Airbnb as a company.

Win #1

The first win is for the consumer since there are even more options given and consumers are not stuck with choosing hotels. The more Airbnb's that pop up are gonna mean cheaper rates or equal rates to hotels but the main difference is, is that the consumer gets more space and more privacy. With the world beginning to open up, more people will want to travel which means Airbnb's will have increased demand then they have been for the past year. Not only that but consumers also get a far more unique experience since some Airbnb's have unique decor or architecture (cabin, modern, farmhouse, etc). Airbnb's can also be in various types of towns that could have secret hidden gems.

Win #2

The homeowners also win because they are able to get a passive income with little effort put in besides the upkeep (which is no different than trying to rent out a home). Another thing is that they could be at lower risk then renting out their homes because Airbnb has a policy where the people staying at an Airbnb can not hold large parties. This means that there could be a less chance of damage being done to the house. I also think since hotels are only meant to be slept in or be a place to relax when your not out and about doing your vacation activities and since Airbnb is meant to be a form of "hotel" that means the people are not going to be in the house 24/7 since most people are on vacation and want to explore rather than sitting at their Airbnb. As more people realize the profit potential in opening up their home to strangers and posting on Airbnb, then Airbnb as a company will grow.

Win #3

Airbnb is also able to benefit from both of these types of people since they are the platform that helps consumers and sellers find each other. I could be wrong, but Airbnb may be like a Zillow where they do not own any of the properties but since they control the marketing and internet aspect of it, they get to take a portion of the profits. To me the more Airbnb helps the homeowners get more people into their houses then the more Airbnb as a company wins. Just like Zillow, I believe Airbnb is a service rather than a producer. Airbnb provides the service of convenience to both the seller and the consumer which is why they are well positioned for growth. Airbnb's website (you can click the link in purple to see Airbnb's website) is so easy to use and visually appealing that they are able to make it easier for the consumer to find what they need.

Win #4

I also like Airbnb because they do not have to build vacation homes unlike hotel chains, such as Marriot where they have to spend billions in renovations or construction. What I love about the Airbnb concept is that it is "reusing" the real estate that already exists by being reliant on homeowners being willing to Airbnb their home. This means the environmental impact Airbnb has could be far less than hotels. In conclusion Airbnb is a disrupter in the hospitality industry. I have begun to put more weight on sustainable companies and from the research I have found, Airbnb is more on the sustainable side compared to other companies in the hospitality industry.

Concerns

The one major concern I have about Airbnb is how they will compete with the luxury hotels, such as The Venetian or Cosmopolitan in Las Vegas. I think Airbnb is great for people who would rather spend more on activities in the area than on the place they are staying but for those with a lot more money who are able to spend a lot of money on the place they stay as well as activities, then I see trouble for Airbnb. So for the La Quinta's, Hilton's, and not as luxury hotels, Airbnb will become a bigger competitor for those types of hotels.


Conclusion

I believe that Airbnb is a great company which is why I am happy with my investment that I made on it. Hopefully this makes you aware of one more company that you can invest in and encourages you to do more research (because nothing I say is meant as investment advice since I am not a financial advisor...obviously lol) or makes you aware of the different options you have when choosing a place to stay when you go on your next vacation.

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*Disclaimer: This is not meant to be investment advice but rather for entertainment and sharing my thoughts/opinions which means stuff I say could easily be false. Make sure to continue your own research when making investment decisions*

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