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Scott Galloway@profgalloway

Published on October 16, 2020

5-min read

While the entire professional class, and every elected official, all claim to be optimists, I see the world through gray-colored glasses. Vaccine by fall, herd immunity, a robust recovery, markets will continue to surge, AI … 

Yeah, right. 

Pessimists are underappreciated, as while optimists built the first plane, pessimists suggested seat belts. Both parties have a role. Neville Chamberlain, Charles Keating, and Bobbi Brown were all likely optimists. But I digress.

So, being angry and depressed doesn’t mean I’m wrong. There are good companies that are overvalued (Tesla, Snowflake), good businesses whose emissions are bad for society (Facebook, Twitter), and firms that are just a menace (Uber). There are also firms that are all three (Palantir). However, occasionally there is a firm that is so gangster even I can’t help but see the glass as half empty, vs. empty. The most valuable private firm in America is Airbnb.

I believe this time next year, Airbnb will be the most valuable hospitality firm in the world and one of the world’s 10 strongest brands. (Note: rankings of “the world’s best brands” are a desperate yelp for relevance from ad agencies begging clients to buy more media and cling to the nineties, the Brand Era.) The SF platform will likely be worth more than the three largest hotel firms, combined. Why?

The Biggest Moat in Travel

Ride hailing requires local supply (drivers) and demand (hailers). Hotels need local supply (hotel rooms) and regional demand (guests). But a global hotel brand requires both local supply and global demand, as guests are from all over the world. Airbnb has global supply, boasting more than 7 million listings worldwide — more than Marriott International, Hilton Worldwide, InterContinental Hotels Group, Wyndham Hotel Group, and Hyatt Hotels, combined. More impressive, and singular, Airbnb is the only hospitality brand that has the global awareness to generate unrivaled demand. 

In 2021, there will be more Airbnb users in the U.S. than people in California.

Outside of luxury, which is not relevant/affordable to 90% of travelers, there isn’t a truly global brand, until now. Google searches reflect that Airbnb has eclipsed the equity of century-old brands, in one decade, across markets big and small. While competitors may have equity in a specific market, no brand sits on the iron throne across all markets as Airbnb does. 

This equity also bests that of airlines and online booking engines that may have global awareness (like Qantas) but only regional relevance (i.e., not an option for intracontinental travel in markets outside Australia). 

So, how to value the gangster of all private gangsters? What is the benchmark and the corresponding multiple? It’s clearly not a hotel business, but not a SaaS firm either. However, Airbnb is a tech firm and highly “disruptive.” The firm has a greater share of employees with an engineering background than Amazon or Uber.

How to Value?

The only firms I can think of that have global demand/supply and brand equity, and an asset-light high-margin business are the credit card companies, which trade at 20+ multiples of revenue. Airbnb projects 2021 revenues of $5-6 billion, yielding a potential $100-120 billion valuation. 

In 2020, in the private markets, Airbnb shares have traded at a valuation ranging between $15-30 billion. The media pegs the IPO valuation at $30 billion. Put on your seatbelts, as the bankers will have no excuse to not price the shares at the high end of a recast (higher) range, and then reward their institutional clients with a Snowflake-like flurry when it begins trading. There’s something about weather and cruise analogies that becomes more appealing as you get older.

Ali vs. Holmes

In 1980, 38-year-old Muhammad Ali returned to the ring to fight a 30-year-old undefeated Larry Holmes. In the pre-fight examination Ali was unable to consistently touch his finger to his nose, had difficulty coordinating the muscles used in speaking, and could not hop on one foot. Boxing pundits describe the medical clearance to fight as criminal. I’m pretty sure the physician who cleared Ali for the fight now serves on the board of Facebook. 

It’s difficult to identify another sector, this large, that has one player more ascendant while the rest of the industry can’t touch its nose. The hospitality sector has experienced an unprecedented shock that dwarfs 9/11 or any recession. Recessions, even wars, take occupancy levels down to 60%, or even 50%. No hotel owner or management firm modeled occupancy dropping to 0%. The result is an entire industry on its heels, except for one player that’s on its toes, waiting to spring forward with an information-age Super Bowl ad, the Initial Public Offering, and begin firing a howitzer of capital as other firms return fire with squirt guns.

Airbnb is also a better value than hotels, offering more space but with less Covid (no check-in, elevators, or common areas) at a lower cost. A crisis is a terrible thing to waste, and Covid afforded the CEO the cloud cover to cut costs and refocus on the core business. In May Airbnb laid off a quarter of its staff (1,900 employees). CEO Chesky managed to pull a Bezos and was seen as a hero for his empathetic approach to layoffs (generous severance, extended healthcare, and a website of Airbnb employees who were laid off to help them find new leads). Firing people, sending out dick pics — tomato/tomahto. Chesky and co-founders relinquished their salaries, cut pay in half for executives, and slashed nearly $1 billion in marketing expenses. The firm is in fighting shape.

The reduced cost structure and market recovery mean the path to profitability has become bigger, better lit, and shorter. There are rumors the firm will accelerate into/through profitability in 2021. The story here won’t be one of distant, but burgeoning, profits.

The New Story Stock

The story stock of 2020, where the narrative rode shotgun as the numbers sat quietly in the backseat, was Tesla. Airbnb will not electrify the world, but it will host it and reshape the resources required to let people tap into a basic instinct: to explore with others. What Airbnb lacks in story (unlikely Mr. Chesky can land two Brooklyn studio apartments on dual barges concurrently), it makes up in performance. There is no better vision than performance. 

This morning I was on Bloomberg TV discussing SPAC stocks. Despite the echoes of “It’s different this time,” I believe SPACs are canaries in the digital coal mine and will continue, over the medium- and long-term, to underperform the market (note: this year they have overperformed). My advice, if you want to play SPACs, is to buy a basket, as among the bastards (I’m rewatching all eight seasons of GOT with my son), a dragon will be birthed. Or you could just buy the dragon … Airbnb.

Life is so rich,

P.S. On the pod I spoke to Sinan Aral about his new book on social media and how to overcome its negative effects. And … we have a new sprint — Product Strategy, taught by my NYU Stern colleague Professor Adam Alter. Sign up to join the early access list.




    Just to say heard you on bill maher, reciting the truth so Subscribed- hope to learn how to help protect my grandchildren and others vs social media , propoganda And mind manipulation

  2. John T says:

    The “Sign up” link in the last sentence is broken.

  3. Andreas Lanz says:

    go go go!

  4. fauxfox says:

    winter is coming

  5. Seb says:

    Scott, this type of article makes me facepalm because you’ve overlooked that Airbnb is an OTA (online travel agency), similar to Booking Holdings and Expedia. The former has a $66.1bn market cap today and the latter $12.7bn. You don’t need to compare them to credit cards (wrong market dynamics), etc… since there are already stock market listed comparables. Other similar business models include comparing them to Greystar (the world’s largest apartment operator) wouldn’t make sense, in the same way that AIrbnb connects you supply to demand, but they do not operate the underlying accommodation. It really drives me crazy when people compare Airbnb the company to Hilton / Marrriott – they are different businesses, in different parts of the value chain! You could compare hotels vs. alternative accommodation categories (i.e. Airbnb-type accommodation), e.g. how much spending is shifting from hotels to vacation / short-term rentals (btw – Airbnb didn’t invent the market, but popularized it.. people have been renting out their homes for many, many decades… VRBO now part of Expedia was the first to hit the mainstream in terms of online distribution, but Airbnb capitalized on the zeitgeist or urban markets and the sharing economy). The other type of tech company that you might want to compare it to are the global distribution systems, initially set up by airlines and spun off (they’ve bounced between PE and the stockmarket), e.g. Sabre and Amadeus.

  6. KD says:

    Airbnb will get regulated just like Uber. Comparing 7M accommodations to Marriot/Hilton etc is like comparing Uber 10M vehicles vs Hertz, it misses the mark.

  7. Thomas says:

    Prof, very interesting piece, however wouldn’t it be a better comparison to pair AirBnB with online booking sites? Say or Trivago? I understand such websites have a very similar core business and are in some sense also asset light (in the likes of the major Tech Co’s)?

  8. Joe says:

    Warts and all. Yes, Air BnB will dominate the world, but they run the risk of being like E-Bay. Too much clutter. Have you every tried to sift through dozens of booking options only to find the dream apartment is really trash? Until this gets better I’ll keep a bit of caution on their future.

  9. Adam says:

    Its a total B.S. You have to be ignorant to believe that people will stay in other people’s house after everything going on in the world…

    • JuanChami says:

      My Airbnb has been solid for the past 3 months.

    • Kim Smith says:

      My houses have all been booked solid since May. As well have the ones I manage for others. People will not stay put for long.

    • Tom says:

      Much better being in a place by yourself than in a socially distanced hotel with people from all over the world… a stance which I think a lot of people will be taking!

    • fia says:

      My cottage located in a rural, tourist area in upstate NY has been booked solid since NYS reopened. It’s been my best year in the past 5 years of Airbnb listings, despite the pandemic.

  10. Vijay says:

    Shouldn’t comparison be versus OTAs like, Expedia & Tripadvisor?

    • Thomas Beattie says:

      I asked the same question. They seem better comparables than the old school asset heavy hotel/hospitality co’s.

  11. Alex says:

    Great article – thank you. I of course will some shares at the IPO – watch them drop 30% after 30 days and then keep buying them. Great company with serious growth prospects if they can tap other markets.

  12. Aashish Shrivastav says:

    Yes, absolutely you have rightfully highlighted the problems and challenges faced by Traditional Business in the Hospitality Industry by Platforms in the market. However, in order to deal with the Platforms the Traditional Business…… can apply any of the following strategies: 1. Call your Lawyer and seek for legal advices: Since, these platforms are new to the market many countries don’t have dedicated laws for them. Hence, many a times they are found to guilty of breaching the laws in many occasions. 2. Adapt to New Model: If you are observing that the new model is gaining trend and is a Disrupting Technology and is appreciated by your demands, then you should Adapt to New Model. As there is no harm in copying good values in ones life….. but ones adopted, it doesn’t suits your personality then you can leave it. But, at least give it a shot once. 3. Highlight your Strengths: By highlighting your key strengths there is a chance that you might stand apart as compared to that of some Newly entered player in the market. 4. Bow to the Inevitable: If you are unable to do anything then it’s better for you to pack your bags and leave with money in your pocket at right time….. because by this time you have already washed-off your customers. Traditional business have to apply these strategies in order to deal with the platforms. However, in India; it was first time people saw these strategies being applied by a Platform (Amazon) to regulate traditional retail chain (Future Group India) [by taking Legal Actions], after Future Group India’s deal with RIL (Reliance Industries Limited).

  13. Claudio says:

    Don’t forget that Airbnb isn’t the only one out there. On the other hand, channel management software services offer multiple exposures on a listing, for example, the same listing can be advertised on the Airbnb site but has exposure on at the same time. First come first serve, when one site gets a booking the channel management block the other site ad based on those booking days. That is very difficult to factor on a valuation metric to determine.

  14. Bill says:

    A bit of a different take on Airbnb: – How can the SEC even consider their IPO given the tens of thousands of illegal listings worldwide? If they want the privilege of access to capital markets then they should be a responsible corporate citizen and run a “clean” operation. Their knowingly, willingly aiding and abetting illegal activities is a disgrace. – There is no moat! The booking engine might be branded, but the product – accommodations – are anything but. The actual rooms are totally inconsistent, uninspected, unreliable, unregulated and unbranded – – There is no moat! To beat the fees, direct booking sites by hosts are proliferating exponentially – Last year 80% of STRs in Scottsdale were listed on Airbnb – This year only 38% – Buh-bye Airbnb! – If the “value” of Airbnb is $30B the social costs are 10x more. Airbnbs kill jobs, creating only “fractional gig” housekeeping jobs instead of full time hospitality jobs at legitimate hotels. Airbnb ADR/pax is 1/3 or less that of legitimate hotels, killing “bed taxes” that tourist destinations rely on. 45% of Police calls in one Arizona town are now due to nuisance Airbnbs. – Social Costs II – Last weekend at an Airbnb in a very nice part of Scottsdale a party got out of control – there were 100 shots fired, hitting 5 cars and 5 houses! (Phx police report #2020-1711113) Now actual residents have to cower in their own homes in fear for their lives so Chesky can make another $1B – This is grotesque! The backlash for this unconscionable strip mining of residential neighborhoods is coming!!

  15. Althaf Khan says:

    Loved this article..Thank you very much for sharing this valuable information. I hope to see more of these articles in future.

  16. Francisco says:

    I hope the Airbnb and all the employed work togheter it is a great company

  17. Jack Murphy says:

    Love the article but it’s comparing apples to oranges. Yes Airbnb has 7million listings which is huge right? Heaps larger than the Marriott Hilton combined. had 27million listings (Google how many listings on It also has more than 3x the monthly web traffic of Airbnb (use to compare). When you compare apples with apples, Airbnb is far from a star performer and the huge layoffs have hurt their ability to deliver their promises to the platform users. Since covid19 hit there has been a huge spike in the #bookdirect movement and the normally 100% loyal Airbnb hosts have realised that they’re actually a short term rental business and Airbnb is simply a booking channel that delivers guests. A highly effective booking channel but they’re definitely not in any way a dominant force in the market.

  18. Jim Prugh says:

    Airbnb’s primary threat to its IPO are its professional hosts whose small businesses are voluntarily leaving Airbnb behind, even as I write this. They encourage their guests to book direct, not through Airbnb or other OTA (online travel agency such as VRBO,, Expedia and countless others). These pioneers have created their own identities (properties, logo, professional photography, branding and marketing, savvy SEO) outside of the influence of Airbnb for quite a few years now. They rely on any of the 60+ software programs (property management software) that does everything Airbnb’s platform does and much more. Matt Landau’s concept of Listing Site Non-Dependence (LSND) on encourages rule-breakers in the vacation rental community to attract some, but NEVER all, of their guests from Airbnb. These software programs have “channel managers” that can integrate with all the major listing sites. Most professional hosts attract and book guests through their own websites, avoiding Airbnb’s 15% fees. When we communicate with our guests upon arrival, we let them know about our website which offers direct communication to the professional hosts. Airbnb censors communication between hosts and guests on their Message Center to avoid leakage, as described in the previous paragraph. Airbnb is already being undermined by these professional hosts and their guests who understand that they can book direct, as advocated by the Vacation Rental Management Association. No news outlet or, for that matter, professor in any business school has ever addressed this threat to Airbnb’s IPO, so there’s still time. Please contact me if you’re interested to learn more.

    • Hostess Cupcake says:

      Would like to learn more about direct bookings. I’ve heard it a lot on Get Paid for your Pad. Interested in how a host would do it easily? That’s why Airbnb is so great- they make it so easy for hosts. My calendar stays full!

  19. Warren Beth says:

    Why isn’t a good comp? I feel like it should be mentioned in the asset light hotel business model

  20. Samantha says:

    Scott, thanks for exposing this. The other side is the way this sharing economy is taking away long-term rentals AND driving investors to purchase what used to homes – now turned into tricked out houses. We live in a resort destination and the trend has gone somewhat unoticed until recently because there have always been vacation rentals. But now the pressure seems greater as ever and if we don’t put guard rails we’re going to be without a community at some point. There are many ways cities have put in restrictions, but the East Coast is behind. And resort destinations are also behind. Realtors will say it’s bad news, but protecting a community is something everyone can rally around. It should be a priority.

  21. Richard Clarke says:

    Your top chart would look quite different if you did available room nights not listings. Vast majority only available part of the year

  22. Deborah Drummond says:

    The health and safety issues with Airbnb continue. Washing linens in luke warm water, in a residential clothes washer. No guidelines for emergency exits or accessibility for those with less mobility.

  23. William Daub says:

    Hi Prof. Galloway. I like your article very much. My family uses AirB&B occasionally and we like it a lot. The only thing I didn’t see in this paper was mention of Push Back by local neighbors, merchants, and governments. I know that before the pandemic there was the beginning of a push back. It might get worse as local governments start looking for additional revenues. What are your thoughts on this.

  24. jose pedro araujo says:

    How can anyone think they can produce a hotel room cheaper than an hotel chain? AirBnB like Uber only works in sharing economy, if you have to build capacity sooner or later the economics will go against you, and its the owner of the BnB and the car that are going to be stuck with a fail concept.

  25. Gyanana says:

    I think this post lacks research: how is Booking Holdings never mentioned once? It has 28m accomodation listings of which 6.2m are homes/apartments (the AirBnB competitor).

  26. Christopher says:

    I’m an Airbnb host and I love the concept. This is my second year and I will have another property onboarding in a few weeks. Check out my listing:

    • jose pedro araujo says:

      You should go back and take a good look into your business plan, or maybe you think you can produce a room cheaper than a big hotel? One think is renting your house for vacation, the other is buying a property to rent through AirBnB… which makes no sense, sooner or later you are going to be stuck with a bad investment, and airBnB will drop you

    • Tracie says:

      @jose pedro araujo Hotels aren’t private homes which is exactly why chains like Marriott started their Homes & Villas sector. They see the writing on the wall and are trying to catch up. The homes in that program? Same ones listed on Airbnb 😉

  27. Adam J says:

    Cracking post as usual! Just to give my take on it as we (kinda) compete with AirBNB so I have a few insights. Who are AirBNB’s Competitors? You mentioned the hotel brands like Marriott or Hilton (which are really franchises like McDonalds) as being AirBNB’s main competitors. That’s true in a small way, but AirBNB is a platform not an operator – so its real competitors are, Expedia and Trip (previously CTrip). (technically Booking Holdings) is by far the biggest travel business in the world (that is, after Google which is really the biggest travel business in the world but no one knows it – travel is Google’s most profitable product). is worth US$68 billion – AirBNB is tipped to list at circa US$30 billion. Booking has 6 times the revenue of AirBNB and they are both pure marketplaces (Booking doesn’t operate hotels like Marriott). Interestingly, AirBNB has moved into’s realm with its purchase of Hotel Tonight (which is essentially an OTA, ‘online travel agent’). To compare AirBNB to hotel operators is not really correct – the operators are great at running hotels but they are terrible marketers. AirBNB is solely a marketing platform, like the OTAs. They don’t clean rooms and make breakfasts like Hilton or Hyatt. The valid comparison is how many rooms does Booking or Expedia have versus AirBNB in certain markets (as an aside, Expedia owns an AirBNB competitor, HomeAway). I suspect Booking would have far far more than AirBNB. How good a business is AirBNB? I think you’re largely right on here – any travel business has two key pieces of economic goodwill. That is: – Control of Supply; and – Consumer Trust AirBNB has amazing supply because it has direct relationships with more home owners than anyone else. There are a couple of caveats though – and they’re big ones. Like Uber, many AirBNB properties also list on HomeAway (and many also list on So AirBNB doesn’t ‘own’ their supply (as opposed to say Facebook or Insta, which tends to own their users’ News Feeds). Moreover, brands like Marriott enter into 20+ year Management Agreements with owners – AirBNB can be cancelled at any time. So they have the best supply, for now, but it’s not locked in. It relies on demand. Currently, AirBNB has great consumer trust (this has progressively improved over the years) which allows them to create the flywheel through a scale effect on supply. It is (currently) the second best marketplace (after Booking) because it’s the second most liquid marketplace. So it’s absolutely a great business run by incredible and very gritty founders – but should it get a 20x revenue multiple. I don’t think so. Will AirBNB replace Branded Hotels? I don’t think there’s any chance AirBNB will ever replace hotels in a meaningful way. Will it continue to eke market share? For sure. It’s a great product. I booked an AirBNB in January because it was half the price of the Westin and more square metres and literally 50 metres away. But there are a lot of people who want to stay at the Westin (I would have if it were priced lower but refused on principle to spend $2,000 a night). There are places though that AirBNB will almost certainly not penetrate – if you’re going to Thailand or Bali do you want to stay in a villa or a hotel with a pool? Some will always want a villa but more I suspect want a hotel (it’s not as if AirBNB hasn’t had a chance to shift more of that demand in the last decade). Similarly, if you’re a business traveller, do you want to go through the hassle of choosing a different AirBNB every time you go to NYC? Some price conscious business travellers absolutely will (I often do), but a lot won’t. To suggest the hotel room is dead ignores some of the inherent weaknesses of the individual property model. This isn’t like electric cars replacing combustion – that will happen because they’re essentially the same product but electric cars are simply better than gas. Hotels and individual keyed properties are NOT the same thing. How should AirBNB be valued? AirBNB has been valued at US$30b for around three years – the valuation has really barely moved (it dropped then rebounded during COVID). The market is in an insane bubble now circa 1999 so your suggestion that AirBNB could hit $100b could prove right in the short term while the market is a voting machine (although I doubt it), but in the end, the weighing machine should kick in. AirBNB is a marketplace and should be valued like every other marketplace (ie If AirBNB was so much better, why would it need to buy HotelTonight? It would be like Tesla buying Fiat. To suggest that going public will cause it’s intrinsic value to increase is classic bubble mentality. AirBNB isn’t a tech business like Uber isn’t a tech business and Amazon (not AWS) isn’t a tech business – they’re tech enabled retailers. Is AirBNB a great business? Absolutely. Should it be valued like a SaaS business with recurring revenues and 80% gross margins – I wouldn’t think so.

    • Steve W. says:

      Spot on with this assessment. As a Business Traveler and customer of AirBNB, I see them as very different things. Chart that Scott shows is skewed by the fact that most business travel has been on hold since March, but people are still willing to take vacations locally. As a semi-professional traveler, I need the concierge services and flexible booking provided by hotels. Try re-booking or canceling your reservation on AirBnB. It’s awful (Side Note: I cancelled a planned trip to UK due to COVID and it took 4 months and 18 phone calls to get my refund. I never spoke to the same person twice, I had 5 separate case numbers, and the lack of competence was astounding). This level of professional, consistent, penalty-free booking experience is critical for frequent business travelers. When business travel rebounds, you will see professionals like me flock back to Marriott and Hilton. We value consistency of things like good WiFi, fitness facilities, cleanliness, print services, decent food late at night, and a reasonable hotel bar. We might take our families on vacation to an AirBnB (I never will again), but we could just as easily use some of those hotel points to stay at a really nice downtown hotel or seaside resort.

    • jose pedro araujo says:

      @Steve W. Not only that, but big hotel chains have economies of scale and experience marketing and managing hotels. How can an individual build and explore a room cheaper than an hotel… he must be forgetting to factor something in the Business Plan, maybe the fact that half of the capacity is AirBnB is not sold, and has your property gets older and gets bad reviews, you are going to be stuck with a bad investment… Or making a maid’s salary in order to save money…

    • ANDREW CHALK says:

      “travel is Google’s most profitable product” Please explain!

    • Chip says:

      @Steve W. exact experience I have had. I just did a cross country trip; i needed flexibility. despite poor past experiences with cancellation, I proceeded with airbnb anyway. BIG MISTAKE. The first night, I didn’t make it to the town, tried to cancel my room. I am still dealing with it. But after that night, every room I booked was with a marriott as I could easily do it on the fly and make changes. One time I didn’t make it to a town, and even though I was beyond the time of cancellation, they applied the funds paid to the hotel where I was going to stay. For business, I would NEVER use airbnb as like you, I always employ the other services offered at a hotel.

  28. David King says:

    We’ll see how Airbnb can turn its losses this year into an upward swing over the next few years. Naysayers should note it’s not going to just go away anytime soon. So it’s a question of how we all legislate it and make it work. Or in some cases, refuse it and penalize it (for example where there are housing shortages and where it is increasing rents and mortgages too much and for real as some people blame Airbnb for that as a scapegoat for other city problems they are having). As part of a sharing economy it makes sense these days in a lot of ways. So does Uber. And that’s because those industries needed competition to keep their greed in check. Airbnb still needs to iron out so many obstacles in its path in each town and city where it pops up. As do other eco and economy sharing companies. But it deserves a place as a public offering, Uber did so awhile ago already. Airbnb is only ten years old so still will see growing pains. But those guys are smart, responsible when they need to step it up and they are duper resilient. And I know this as one of their very first employees 🙂

  29. Doug says:

    Neville Chamberlain and Joe Biden have the same foreign policy mentality

    • Fred says:

      At least Biden has a policy. Whack-a-mole Trump is too dumb to have one. US Generals think he’s a joke.

    • Doug says:

      Thanks Fred, Donald Trump plays footsie with a dictator from North Korea. He’s not genius. Nonetheless, You just proved that you are a Partisan village idiot. Congrats. Drink some more political kool aid from your tribe. Ignorance is bliss. It’s so easy to get people to show just how dumb and blind they are.

  30. Louis Berghmans says:

    Dear Prof Galloway, cities in Europe are starting to legislate AirBnB out of existence: 1) Amsterdam have put a cap of 30 nights per year per property 2) Paris forces you to compensate the surface you rent out by converting office space 3) Barcelona restricts Airbnb (and similar platform) to max 2 rooms and only people residing in the appartement can rent it out The cities give out fines between 20000EUR and 50000EUR and are aggressively enforcing the new regulations. Rents have been rising in all cities making Airbnb an easy target for politicians. How great will the gangster be if you can only rent rooms on the countryside (that you can also rent on

  31. Daniel Perez says:

    How you wrote this much about airbnb without a mention of booking is beyond me. Booking is much more of their competition than Hilton will ever be.

  32. Timmy says:

    For residents, this has translated into rent increase / shortage of living space over the past five years. BAD for locals, BAD for communities!!! #Realitycheck

    • george says:

      Conversely it helps fight inequality by giving mom & pop airbnb hosts a share of the profits that would have otherwise gone to hotel execs.

    • Ted says:

      @george if you use it this way – yapp! But Airbnb is NOT couchsurfing anymore! It´s big business in real estate in some cities! 🙁

  33. Dan says:

    Dear Prof. Galloway, The figures are correct, but you’re comparing apples to oranges. How about do the same graphs for AirBnB vs Booking Holdings vs Expedia ? Aggregators vs. aggregators, not aggregator vs. hotel chains.

  34. Utkarsh Prasad says:

    Hey Prof. Scott, Why not the same bias towards OYO Rooms? You ripped them apart…and yet they are similar to airbnb…

  35. Liz says:

    I love Airbnb ! The best ! The best ! Would not use anybody else ! Great customer service ! Safe! Used hotels , now only Homes on Airbnb !

    • Andre says:

      When I wrote an honest review re: one of my stays – the others were great,which actually was verified by an Air rep re the host writing a defamatory review, Airb still won’t take it down Was prepared to go back to Europe and file a lawsuit, however, Americans aren’t permitted entry currently … Seems like Airb cares more not to lose income … supposedly!

  36. Kris smith says:

    So happy the Conglomerate hotel chains, have taken a financial blow. They live luxury life’s. While staff lives below proverty lines. Also most hotels pre corona, were not clean as you may believe.Airbnb allows change, I haven’t ever booked where I’ve had problems. Then I love not having that touristy feeling when your new to a city. Major hotels are also linked to alot of child/human trafficking

  37. Lydia Kidwell Sugarman says:

    Call me old – fashioned. I still prefer hotels. I like room service. I like someone else making the bed and leaving fresh towels. I like having some guarantee (which hotels are providing) that the accommodations have been disinfected after the last guest. If I’m traveling, I don’t want to have to do housework or cook or clean up! I like being waited on. I don’t want to worry that everything isn’t as virus-free as humanly possible. There are no guidelines or minimum requirements for AirBnBs! The more people who rush to book AirBnB, the more hotel rooms there are from which to choose at competitive rates.

    • BnbPro says:

      Housekeeping staff does not disinfect. They are given strict timelines to clean a certain amount of rooms so they rush right through all of them

    • I am an AirBNB host. There are COVID-19 five- step cleaning protocols while wearing a mask set by the company. says:

      I am an AirBNB host who follows the company Covid-19 five-step cleaning protocols while wearing a mask, as required AirBNB.

  38. James says:

    I am a great admirer of No Mercy/No Malice, but this is a week the Prof should have taken off. Bad comparison to hotels. Service for AirBnB is atrocious —- for owners, but also for customers. The prior comment about a delayed response from the third world is 100% accurate. Try to change a reservation or try to get a problem resolved, say a failed refrigerator or a modem locked in a closet with an owner away on vacation. Brain damage. The only quality control is the owner’s fear of a negative review. AirBnb can cut overhead because they have/had the usual case of overhead bloated by tech hubris —- visit the SF headquarters. The valuation analysis here should get a grade of F- for the Prof. What happened?

    • utkarsh says:

      Totally agree with you James, this is F- analysis from Prof. Scott. I would have flunked him in my B school!!

  39. GregoryH says:

    I always see this comparison of AirBnB listings to hotel rooms, but wouldn’t the more accurate comparison be of inventory? has anyone looked at “room/property nights” as a metric rather than just properties? Not all AirBnB listings are available 365 nights a year. Some people are renting their weekday home on weekends, or the weekend home on weekdays, and this type of property owner/AirBnB Host is generating revenue on an underutilized asset. The other category of owner/host is like CW in the comments, someone who has been buying up properties to rent them on AirBnB, or the landlord who has decided that it is more lucrative to run a de-facto hotel than have full-time tenants. It is this latter category that, as others point out, is at risk of regulation. The threat of regulation is not abstract, just ask AirBnB hosts in Seattle. Also, VRBO, Vacasa, Homeaway, while not ubiquitous as AirBnB, do offer an alternative for both owner/hosts and guests, and my experience with Vacasa has always been better than with my experience with AirBnB. Just like the for hire vehicle drivers who have Uber, Lyft and whatever local alternative exists, owner/hosts are doing the same thing with these services.

  40. CW says:

    This company is gravely failing homeowners that provide its inventory Right now, as an Owner with 10 properties on the site, there is no phone number to call if I have a problem. All service inquiries are handled 24 hours to 72 hrs after submission by someone in a foreign land. I have constant, basic tech issues this company is hiding from potential investors. The treat their “guests” like gold and their “hosts” like dirt. We are always wrong. They change terms of our agreements without any say so from owners I could not agree less with this article.

  41. Oliver says:

    Airbnb has never been on my Radar, EVER. I can not believe their market cap, staggering. And wtf was that about the guy that cleared Ali to fight? Does he serve on the board of Facebook? Whaaa? Also, enjoy the rewatch of GOT.

  42. SG says:

    Thx, not sure why you don’t compare between leisure booking platforms. AirBnB is not directly competing per se with Hilton, Marriott & Co. The direct competition is, Expedia group, and to a lesser degree – Kayak, or even Trip Advisor.

  43. Alex Tang says:

    There were EIGHT seasons of GOT, weren’t there?

  44. Michael says:

    I agree with the other commenters who say this analysis misses Airbnb’s true competition – Booking and (to a lesser extent) Expedia. As a quick example of the false equivalency, compare the claimed 7M available Airbnb accommodations in 2020 with the 21M rooms that Booking said it had back in 2015 (!). Airbnb has benefited from being part of a COVID-friendly category (vacation rentals), but it remains to be seen why consumers would default to picking them over the other options. Particularly in Europe, Booking gets a lot more love, and I don’t see anything in 2020 that would have changed that. A loyalty program similar to or better than Booking Genius would probably help a lot.

  45. James Somers says:

    Here’s what I challenge in this post: “Airbnb is also a better value than hotels, offering more space but with less Covid (no check-in, elevators, or common areas) at a lower cost. ” It’s the covid part that’s troubling. It’s not the elevators check-in desks or common areas that trouble me; it’s the rooms themselves. Hotels operate under inspections from local health departments. Who does the health inspections on all those airbnb rooms? I’ll stick with hotels, thank you.

  46. martin berg says:

    Am totally with Prof G that AirBnB is a better investment case than Tesla, although the comparison with the hotels are fatally flawed – see other comments about being the right comparable. That is an unusual lapse of analysis for our otherwise razorsharp ProfG. Assuming ProfG would declare an interest if he was currently long on AirBnB stock, I wonder why

  47. Timothy McBride says:

    Love the Ali-Holmes metaphor! I don’t know shit about business but I love your books and podcasts anyone—for the wit.

  48. kent comfort says:

    Scott, always enjoy your weekly posts. Life is so rich, and so are your comments. I would like to ask if perhaps you are a step out of sequence regarding your read on Tesla. I say this because Tesla is not a car company, any more than Apple is a phone company. Tesla is a software company that delivers their software in a vehicle, among other products and services. Their auto competition can out produce them in putting coaches of all manner and dimension on the road, but they cannot match the software level. Hence, constant delays and missed deadlines for when their EV offerings come on line. Tesla is a long game player. Who gives a shit how they are doing next quarter, or even in the next 4 quarters? Their verticality is something to be hold in the tech universe and their future is blindly bright! I know you will put me in my place, here, but it was fun writing to you. Keep up the great work.

  49. Amber Parkin says:

    Bobby Brown not Bobbi Brown? If not, would love to know the context?

  50. Louis Wong says:

    Yes, after listening to Brian’s appearance on Recode Decode, I see a really strong and empathetic CEO who can lead this company to great things for AirBNB’s future. Like all SaaS companies, what they lack, however, is moat. What’s stopping a competitor from creating its own version with their own twist? Think Lyft vs Uber, Redfin vs Zillow vs Trulia, etc.

  51. Robin Hood says:

    The most unfortunate part of all of this is that Airbnb will do an IPO, instead of a direct listing, and will end up giving up billions that could have gone into their coffers instead of the pockets of wealthy institutional clients who will just get wealthier. Chesky does not need the buzz of an IPO. The stock will fly regardless. At a minimum, Chesky should follow Snowflakes move and give Berkshire a huge chunk of the IPO. This helped Snowflake drive even more interest than it already had. At least this way, Airbnb will get a higher offering price on the IPO and get to put more cash in the bank.

    • Mike says:

      Direct listings aren’t such a simple success, ask Slack. NYSE has approved raising cash, I think but not sure anyone has done so. Also “wealthy institutionals” include pensions and endowments so not the wealthy getting wealthier, and they provide stability to companies dealing with quarterly reports for the first time vs retail investors who could sell off. Berkshire idea is a good one for those who can. Is Airbnb profitable? It loses many of the benefits of scale of hotel chains, and has a drastically different margin profile so I wouldn’t just sum up the value of existing hotels. It might be worth more, but still apples to oranges.

  52. J.A. BUjes says:

    You ignore 2 factors: business travel (which is anchored around hotels) and the inevitable conflict between airbnb properties and local housing needs. When rents/home prices go through the roof because of airbnb capture and artificial scarcity…laws will be passed. Can you comment on this? I could see businesses opting for airbnb, especially if airbnb provides some supporting infrastructure, but the realestate market issue is more problematic and less easily solved.

    • Joe Anhalt says:

      Business travel is at 0% right now with so signs of getting back to normal for years, if ever. I also believe, in the long run, the data will show Airbnb’s help cities of all shapes and sizes. People can now visit that random town 2.5 hours away from their home because that trip to Italy is no more. If Italy is still in fact on the table they’ll probably stay at an Airbnb 🙂

    • Scott Crickett says:

      I echo JA’s sentiment. I’m not sure how much it could affect the overall picture for AirBnB but they are vulnerable to local regulation in the markets where they operate (so, everywhere). “Global Cities” compete hotly for the business market and traditionally offer various regulatory and tax incentives for hospitality. What we’re seeing now are housing markets that are not fit for purpose, rental shortages and increasing pressure on governments around cost of living. The result for AirBnB could be a rise in disincentives for their hosts in cities facing housing shortages – which overnight would have a significant impact on the volume and/or quality of their supply. Conversely, large hotel groups get to increase their supply with large development projects, supported by local and central governments because they do all that great stuff like job creation, local economy stimulation etc etc

    • george says:

      I run my own small business and I have to travel a lot. I stay exclusively at airbnb. Why? Because it’s cheaper. The cheapest motel out there is $60 a night. On Airbnb you can get a room for $20.

  53. David says:

    The successful pessimistic nation you are looking for = France 😉

  54. kristin says:

    You are the Anthony Bourdain of business, said with nothing but love

  55. Barry says:

    Why compare Airbnb’s listings to hotels when they are vastly different in terms of control and margins? Better to compare against expedia or

    • JK says: is still constrained by hotel room inventory. Scott’s analysis is based on the fact that the supply of AirBnB far surpasses hotel inventory.

    • Martin says:

      @JK I am with Barry on this one. Comparing AirBnB to individual hotels is like comparing Amazon to a single book publishers website, and Expedia to a single airlines website. Bookings is the right comparison, who have moved onto AirBnB’s turf by listing private properties too. AirBnB will likely still come out favourable – but not as lopsided. An untypically wrong comparison from @ProfG , who is usually razor sharp and does the better comparisons.

    • Diego Remus says:

      @JK don’t be constrained by the belief that only offers hotel rooms. For many years already, it offers everything Airbnb offers and many other categories. The inventory size and traffic pull are way larger.

    • Patrick says:

      Surprised the article and nobody here mentions and, both rolled into the latter and bought by Expedia. Most of my bookings come through, not airbnb, though are identical. VRBO is huge in Europe.

  56. Pierre Lagarde says:

    You should compare Airbnb’s inventory and demand with’s. You are comparing an asset-lite aggregator to hotel chains which is preposterous.

    • Boris says:

      Most of these hotel chains are asset light management companies (fee machines) without real estate on balance sheet. Hilton spinned off real estate in 90ies. It is now called Host.

  57. Charles Wyman says:

    One of the best discussions on intrinsic value I’ve read.

  58. Gabe says:


  59. Charlie says:

    I think you are right on your appreciation and I think Airbnb will become a dominant force. There’s another company that tried to be in the middle between hotels / Airbnb called OYO (backed by SoftBank) that I think was terrible. Anyway. Congrats on your insights, your podcast and your success. Great articles !

  60. Thiago Catao says:

    Hey hey, curious over your thoughts about this comparison VS, which is nowadays the top 1 player in this market. Best!

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