Airbnb reveals its fears: Google, mayors and earthquakes
As Airbnb prepares to sell billions of dollars in shares, the hosting giant has explained the wide range of risks it faces: from search engines to angry mayors to earthquakes. .
Since the peer-to-peer platform was founded in San Francisco in 2008 by Brian Chesky, Joe Gebbia, and Nathan Blecharczyk, it has become a dominant force in the hospitality industry.
The company is looking to lure investors into an initial public offering to raise around $ 3 billion (£ 2.3 billion). As part of the process, he is required to disclose his “risk register” in a filing with the United States Securities and Exchange Commission,
The hosting giant cites another California giant as its main concern.
The Airbnb flyer warns: “We believe our SEO [search engine optimisation] results were affected by the launch of Google Travel and Google Vacation Rental Ads, which reduce our platform’s importance in organic search results for travel terms and Google placement.
Airbnb also warns of the threat posed by “SEO and meta-search sites, such as TripAdvisor” and headlines Booking.com, Expedia and Trip.com – which includes the comparison site Skyscanner.
“Our competitors are adopting aspects of our business model, which could affect our ability to differentiate our offerings from those of our competitors,” says Airbnb. “Increased competition could result in reduced demand for our platform from hosts and guests, slow our growth and have a material negative impact on our business, results of operations and financial condition.
“Many of our current and potential competitors enjoy substantial competitive advantages over us, such as greater name and brand recognition, longer operating histories, greater marketing budgets and marketing programs. retention, as well as significantly greater financial, technical and other resources. “
But traditional hotels are far from the list of worries: “Hotel chains, such as Marriott, Hilton, Accor, Wyndham, InterContinental, Oyo and Huazhu, as well as boutique hotel chains and independent hotels.
Of particular concern is the practice of some Airbnb hosts to “list” their properties.
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“When properties are crossed, the price paid by customers on our platform may be or may appear to be less competitive for a number of reasons, including differences in fee structure and policies.”
Airbnb typically takes more than 15% of the value of each reservation.
“Some property managers contact our hosts and guests to encourage them to register or book directly with them and bypass our platform,” he notes.
The coronavirus pandemic is wreaking havoc. “Many hosts and guests are fearful or unwilling to share homes due to concerns surrounding the transmission of Covid-19. “
In the longer term, the prospectus identifies political antagonism in Europe as a problem: “A group of mayors representing 22 cities (including Amsterdam, Barcelona and London) met with the European Commission to demand increased regulatory oversight with regard to short term rental. platforms.
“These regulations include ordinances that restrict or prohibit hosts from short-term renting, set annual caps on the number of days that hosts can share their homes, require hosts to register with the municipality or the city, or require hosts to obtain permission before offering short-term rentals. term rentals.
“We are subject to a wide variety of complex, evolving and sometimes inconsistent and ambiguous laws and regulations. “
Natural disasters are also a threat. “Our head office, a significant portion of our research and development and some other critical business operations are located in San Francisco, built on a high risk liquefaction zone and close to major earthquake faults.
“Additionally, northern California has recently experienced and may continue to experience power outages during fire season and our corporate headquarters does not have a back-up generator to maintain full business continuity. “
Airbnb also notes the risk associated with “sources of political uncertainty, such as the United Kingdom’s exit from the European Union (‘Brexit’)”.
But the company thinks it has a good story to tell: “In more than 220 countries and regions around the world, our hosts have welcomed more than 825 million guest arrivals and have racked up more than $ 110 billion (83 billion pounds sterling). “Airbnb” has become synonymous with unique travel on a global scale.
“And just like when Airbnb started during the Great Recession of 2008, we believe people will continue to look to accommodation for extra income.”