Why isn’t Airbnb profitable? Is Expedia Group losing market share? What about Booking.com losing ground in short-term leasings? In current separate published interviews, the CEOs of each business pushed back against the criticism.
At Airbnb the Money Is Flowing
In a CNN interview, reporter Richard Mission last month pointed out to Airbnb co-founder and CEO Brian Chesky the many unprofitable business years ago– and we need to point out today– that spoke of a “path to profitability” in the face of losses and informed Chesky “there has to be a much better service case.”
In the first quarter, Airbnb’s narrowed its bottom line to $19 million, and its market cap June 2 mid-day was $78.8 billion compared to competing Reservation Holdings’ $94 billion.
Chesky responded to that Airbnb’s complimentary capital in the first quarter, which is normally a sluggish quarter, was $1.2 billion.
“We are lean, we have 6,000 employees,” Chesky stated. “We were very, very lucrative from a totally free capital perspective in Q1. We are feeling actually excellent.”
Certainly in 2021, which saw Airbnb notch a bottom line of $352 milliion, the red ink was mostly due to interest expenditure and “other income” cost, mainly a remeasurement of financial instruments.
He included: “We are not pulling on the breaks. We are stepping on the gas.”
Chesky remembered https://skift.com/2020/03/30/airbnb-ceo-apologizes-to-hosts-with-a-260-million-relief-package/Airbnb lost 80 percent of its service in two months during the start of the pandemic in 2020, and reorganized. “We did the layoffs, restructured our business,” he stated. “We restored the business from the ground up.”
Chesky stated he can’t control stock prices and the sour state of mind on Wall Street about risk-taking as it connects to high-growth companies.
“However ultimately as a CEO, I try to focus on things I can control,” Chesky stated. I certainly can’t manage the stock market. I can manage the performance of the company and that’s what we’re focused on.”
He included: “If you hold a stock enough time, the terrific business will go up,” Chesky said.
“And we are not pulling on the breaks. We are stepping on the gas.”
Expedia Withdraws From Southern Europe, States Reservation’s Advantage Is Not Structural
Appearing Wednesday at the Cowen 50th Annual Innovation, Media and Telecom Conference, Expedia Group CEO Peter Kern reacted to issues that his company is losing market share.
Kern stated much of these concerns originate from an absence of appreciation of “mix shift,” and that rivals often do not discuss that they “purchased”– indicating they invested a great deal of marketing cash– their numbers enhancements.
For instance, Expedia did well when the U.S. travel recovery took place while Europe was still shut down, and likewise sees the effect when Europe, where Expedia isn’t the greatest, opens.
“We ignored business in Europe in bad locations, and especially in Southern Europe, where we simply weren’t making money and we were just burning money,” Kern said. “We did not have a winning method there. And from my viewpoint, you do not keep banging your face against the wall in the exact same place doing the same things. You regroup. You figure out how to win. And then you return into the market. And have we quit some service there, some transactions? For sure, we have. But we did it with our eyes open, and we’re comfortable with it.”
Although Booking.com is the leading online travel bureau in Europe, Kern, who ended up being an Expedia board member prior to Booking.com’s ascendancy, stated it wasn’t constantly that method.
“None of this is structural,” Kern stated. “We have actually traded clients for many years. In fact, we used to be pretty dominant in Europe long earlier. And the other guys came up with a sharper method to win in Google, and we gave up organization slowly. However there’s nothing structural about that. There’s nothing sticky about their product. Honestly, there’s not enough sticky about our item although we have all these commitment capabilities.”
It’s clear that Kern does not believe much about Booking.com’s Genius loyalty program, while Expedia Group remains in the midst of attempting to revamp its own five commitment programs into one.
So how will Expedia and its Vrbo unit compete with Airbnb in short-term rentals?
Kern stated Expedia/Vrbo will not be as huge in cities as Airbnb, and will continue to focus on the getaway rental of homes, not homes.
He argued that Expedia has the advantage over Airbnb in its business-to-business partnerships, a sphere where Airbnb is mostly absent.
“And we have that big chance,” Kern stated. “I imply, think of all the rewards programs we assist power like Amex and Chase and others that we can power– that we can press through even places like big hotel chains that are beginning to rent homes to their benefits members.”
Booking.com Making Short-Term Rental Improvements to Win U.S. Customers
Why U.S. hosts or residential or commercial property supervisors sign up and list on Booking.com in addition to– or instead of– Airbnb and Expedia/Vrbo?
Speaking at the Cowen conference Thursday, Glenn Fogel, who heads both Booking.com and parent company Reservation Holdings, said the company understood it needed a better short-term rental offering– he calls it alternative accommodations– and added liability insurance, for instance.
“If you own a home and you want to lease it out to strangers, among the important things you might be concerned about what would took place, [if] they insinuate the kitchen, they break the leg,” Fogel said. “Who’s going to pay you for that? And it’s– if you needed to think that some supplier is going to give you totally free insurance for you, oh, that’s good, however we didn’t do that, other people did, we didn’t. Now we do.”
Fogel stated it is https://skift.com/2021/07/09/booking-holdings-new-fintech-unit-aims-to-help-travelers-beat-banks-at-their-own-game/bettering the payment system it utilizes with big residential or commercial property managers.
“And now we have a much better payment system dealing with the large property supervisors so that the circulations and the reconciliates, everything works lot better, that’s another way to get more stock,” Fogel said.
Fogel stated Booking has a huge grip in Europe in short-term leasings, but the business is under-represented in the U.S.
“We have an excellent item in Europe,” Fogel stated. “It works extremely well. We’re a very big gamer there, and we’re developing gradually here. We’re going to continue to work on that. “