April 1, 2017 | Webinar

Unlocking Secrets Behind Airbnb’s Growth Story Featuring Airdna

Rohit Kulkarni 00:00

On behalf of everyone here at SharesPost, I would like to welcome you to today's webinar. I am Rohit Kulkarni, managing director of the private research group here at SharesPost, but I oversee a bunch of things including our website, content data, and the research group. We are very excited to have with us Scott Shatford. He's the co-founder and CEO of AirDNA. AirDNA is a very interesting data analytics company. I came across this company during my research work on Airbnb, as well as followed them over the last few years, and thought their data and insights would be very helpful for anyone looking to do more work in the space. So I'm excited, too, because [inaudible] here on a very relevant topic around Airbnb, and what happens to hotels, and many other elements in the ecosystem over the next two, three, four, five years.

Rohit 00:57

I have a quick presentation that I'll walk through. Anyone who's joining us for the first time, here's a quick overview of SharesPost. We are a financial services firm, a FinTech firm, bringing together shareholders, and individuals, and institutional investors to create liquidity within the private tech growth asset class. Here are just a few sample of companies that we have transacted in and these are a bunch of reports that we have published to date. A couple of important ones that we did over the last couple of months, Uber and Ridesharing in January of 2017, and last month we published the Airbnb report. And we have been doing such expert webinars for everybody on the line, would welcome your ideas and suggestions of any new topics because we are always looking for interesting discussions and speakers such as Scott. In terms of Airbnb, we did do a webinar walking through a whole bunch of things that we talked in our research report. It's available for anybody once they log in onto SharesPost. I'll quickly go through this because the main topic today is getting into Scott's presentation. There are a bunch of investment positives and investment negatives.

Rohit 02:19

Also, what we thought was interesting was essentially a thought exercise about how would Airbnb's IPO look like. Again, we do not have a special crystal ball here, but we try to make a case for a $50 billion IPO in 2018 for Airbnb. Again, many ifs in this next statement. For example, if Airbnb pursues an IPO route, if they decide to go public in the next 18 months, we would guess that prospective and potential public investors in Airbnb shares would calculate their enterprise value based on 2019 expectations. So that's almost three years, two and a half years away from today. But we think they would reach 600 million room nights in 2019. That's a pretty big honking number, but this is based on publicly available information, based on CEO commentary. We just constructed a simple scenario about what Airbnb could look like in over the next two to three years. And from a valuation standpoint, if you look at valuation multiples for online travel marketplaces such as Priceline, Expedia, TripAdvisor, they have hovered around say 30 to 35 times, one year forward [given down?] multiples. That means-- what does that mean? I guess, profitability, Airbnb would need to have that probably in the range of 1.5 to $2 billion of [inaudible] expected in 2019. That translates to somewhere in the range of 10 to 15 percent margins. We did a survey of more than 5,000 online travel customers. A lot of insights in the report. I won't go through that. I would welcome your suggestions once you have had the chance to look through that. I'll stop talking right here because the most important topic is going through Scott's presentation. So, Scott, again, thank you so much for joining us. We are just switching the presenter mode to you and looking forward to your slide deck.

Scott Shatford 04:31

Hey, Rohit. Thanks for inviting me to talk today. And, yeah, I'm happy to talk to everybody about the data that we're seeing in the growth of Airbnb over the last couple years. So, there's lots of ways to measure the growth of Airbnb. Most people really look at the overall listing growth of Airbnb. And the listing growth of Airbnb has slowed down slightly over the last couple of years. Listing growth is just the number of properties that you can see on the website in a given month, has grown 70% over the last year. But the previous years, it was growing at 100, or over 100 percent. So now it's down to about 70%, which is obviously still a very healthy growth rate, just for the number of properties in the US that you could see on the website in any given month. I think the more interesting thing is when you start to dig into those properties, kind of what is happening with those properties, that is showing different trends in how these properties are behaving in different sorts of ways. You could analyze the professionalization of those properties. So when we start to looking at total supply, which is basically the number of nights that a single unit is available for rent on the platform, we see that the growth rates get up into the triple digits. So what we're seeing is 117% growth rate in room night supply from 2015 to 2016. What you can read into that is that if a property is on Airbnb previously, a property on Airbnb that was trying to get rented out for the month would only be available for about 12 nights of the entire month. And that number has moved all the way to 20 nights a month that we saw in the last year.

Scott 06:27

So basically, even though the room night supply isn't-- even though the unit supply isn't growing at the same rate in triple digits, we are seeing the total supply really growing quickly. And demand is keeping up with supply, is what we're seeing. More travelers are choosing Airbnb, and typically, from many of the markets across the US that I've looked at closely, there's no lack of demand. As new properties come on board, the existing properties aren't charging less. They're not getting less occupancy. Demand is able to keep up with supply as it comes on to Airbnb in nearly every market that I look at. How much-- obviously generates a lot of revenue for Airbnb. And so, getting into this revenue number is probably a nice opportunity to think about how we are generating these numbers. So in the last three years, here at AirDNA, we've been scraping every single property globally on the Airbnb platform. Prior to October 2015, we were, I believe, the only company able to see the actual reservation IDs within the source code of each listing listed on Airbnb. So we were actually able to see with close to a 100% accuracy what was the reservations that were occurring for each listings globally. Since that point, when we started coming up with reports with a lot of equity analysts and other people, Airbnb hid that reservation ID from their platform.

Scott 08:04

So, at AirDNA we spent about six months working on a model machine learning algorithm that was able to look at any new booking that was coming into a listing on Airbnb, and able to model and say, "Was this a reservation, or was this the owner blocking out that day from being rented?" So we've been able to do this with a high level of accuracy, and so just want to throw some context out there about how we're getting these numbers. So, yeah, in general, we're seeing occupancy stay relatively the same. ADR is increasing, and mostly related to higher quality units, bigger units coming on the market, and that's mostly driving the ADR. When we look at same store sales, for lack of a better term, properties, what they're earning last year versus this year, it's a bit more flat. But overall, there's more premium properties coming online, there's bigger properties coming online, and that's what's driving a bit of their ADR growth, and same goes with the RevPAR growth as well.

Scott 09:09

So there's some of the high-level numbers, so taking a step further and looking at the different cities within the US, here's an interesting chart that shows pure number of listings on the X-axis, and the rate of change, growth rate over the last year. So this is telling, in a lot of ways, what's happening. You see at the bottom of this chart San Francisco and New York. Obviously, some of the most publicized Airbnb markets, and most heavily regulated Airbnb markets. So while they still have a substantial number of properties, regulation in those cities has definitely slowed their growth rates. And what's been able to make up for that lack of growth rate in those major urban markets has been cities like Orlando, cities that aren't on this chart, which are more like resort cities, the Lake Tahoes, Myrtle Beaches, [E Town?], beach towns, have really made up the real growth engine for Airbnb over the last year. So Orlando has had nearly 300% growth, year over year, and this speaks to Airbnb's strategy a bit, in finding the easiest path to growth these days is outside of the San Franciscos and New Yorks and Miamis, and it really is in growing into traditional vacation rental markets. So looking at the numbers, that's what we see as being a huge engine of growth for them.

Rohit 10:43

Hey, Scott, Rohit here. Sorry to interrupt. Do you have a sense of what proportion of Airbnb's companies are in geographic areas that you would characterize as urban, and which ones are-- what portion are not?

Scott 11:01

Yeah, and I think there might be a slide in here, in a few slides, that breaks it down a little bit more. But high level, we see 66% still being in what is designated as an urban ZIP code. The US census, they put out some population density and classify things as urban, suburban, or rural, and 66% of Airbnb properties are still within these urban categorized ZIP codes. But that is changing. I'll show a chart about that here in a little bit. So, yeah, so some more global context about what we're seeing. These are the top 25 globally for Airbnb. We see the same sort of story about regulation really hindering growth in some of these markets like Berlin and Barcelona, which have really strict regulations and enforcements of those regulations. And we see slightly lower growth rates for Paris and London. I think, basically, they're just hitting some sort of saturation level in those cities. Paris has had a lot of properties for a long time that I think if we look at the Paris market in general, it's obviously slowing. Hotels are slowing there and Airbnb's are slowing down a bit as well. London is still growing at a really nice, healthy pace. Rio de Janeiro, obviously buoyed by the Olympics, had some pretty astonishing growth as well. But I think the real growth story is really in Japan. Japan has really taken to Airbnb and their growth rates there are like nowhere else we've ever seen. So there's a ton of growth within Japan, and Shanghai is obviously an interesting market to look at. Airbnb has spent a lot of time focusing on the Chinese market and it seems like they're having some success. It's still kind of TBD about how that is really comparing to the growth of other platforms out there and it's not something we really looked at. But it is interesting to see that they actually did see some legitimate growth in 2016.

Rohit 13:17

Hey, Scott, sorry to interrupt again. These numbers for international market, they are-- when I compare them with the one on the previous slide, they are really big, as in Osaka, Shanghai. It is still almost two times the size of San Francisco, as in-- and growing five times the rate. Paris, London are more than almost twice the size of New York. So why is that? Is this because of no competition? Less regulation? Have you kind of sliced into any of the whys behind why these global markets are so-- kind of outside of US so larger than what we see Airbnb's impact in US?

Scott 14:02

Sure. Yeah. It's hard to pinpoint any kind of one or two reasons. It's kind of a confluence of a bunch of things. We're talking to people in Japan. What they're telling me is that there's just a basic lack of hotel supply. The hotels that are available are very expensive and that that difference between what a condo can be purchased for or rented for is-- the margin between what a hotel is per square foot and what a local condo is per square foot, there's a huge margin there. So it becomes this kind of this opportunity to take the places, the condos that are right across the street from the hotel, and make them look pretty, and charge half the rate, and still make a lot of money on those properties. And so typically you'll see that in a lot of the popular places that are growing quickly, which is sheer lack of hotel supply, cheaper real estate, and when people have this new way of monetizing these one- or two-bedroom apartments which generates two to three times the revenue of a long-term rental, you see this transition to Airbnb units happening much quicker. And so, yeah, typical to see and obviously, no regulation in sight in markets makes them explode much quicker. So, yeah, in general, the size is shocking because people think that San Francisco would be one of the top 20 markets for Airbnb, but it's-- probably it's not even in their top 50 markets globally.

Rohit 15:40

Okay. Interesting.

Scott 15:42

And I think that there's a lot of influences here, right? Barcelona, poor economy, high unemployment. This is a nice lifeline for people to make some money renting out a spare room in their house or being entrepreneurial and taking on a couple places. So we definitely see that or anecdotally, that places that are a little bit more economically not performing well, that they seem to kind of flock to Airbnb a bit quicker.

Rohit 16:10

Yeah, actually, that's a very good point. As in, we have heard how kind of there's a countercyclical element to Airbnb. So if the world goes into a recession then hotels won't do well but Airbnb might because of exactly the point you made. Cool. Please go ahead.

Scott 16:34

Sure, so kind of touched on this point a bit earlier, but when we're looking at room night availability, this is an interesting trend seeing that the growth is really fueled by larger places now. Where room night supply used to be mostly studio and one-bedroom sorts of units that maybe could be considered to be more comparable to hotel properties, now we're seeing a lot more bigger units, these three-, four-, five-plus bedroom places emerging on Airbnb more closely overlapping with what you would expect to find on a Home Away or a BRBO, and much more directly competing with that sort of larger vacation home supply. So you can see when we look at these growth rates, room night supply going from 4 million room nights to over 14, it is interesting to see that this is because they're adding a lot of four-bedroom places, a lot of larger units, which is really what is kind of growing that room night supply number.

Scott 17:40

So I think another interesting thing to take away from this is how quickly is Airbnb becoming a professional business for people? And we look at this pretty closely to see when a place is on Airbnb how often is it rented? Is it rented all year or is it rented for one week while somebody goes to Europe? Do people have multiple properties or are they just renting out their primary residence? And everything points to a very quick professionalization of Airbnb. As it becomes more competitive, you just see that it takes a bit more in terms of how you're pricing well, how you're decorating, how you're managing the customer experience to really perform well on Airbnb. It's become a much more competitive environment and professional people are able to take the great photos and do the things that really make them stand out from the group.

Scott 18:36

So we can see this in the numbers a bit, by just the total number of hosts that have multiple properties, which hovers around 10% for most of the markets across the US. So those 10% of hosts manage about 30% of the properties on the platform, and then they account for about 40% of the revenue. So basically, the quick and dirty of this is that 40% of the revenue generated on Airbnb right now is from people that I think are doing this on a full-time basis as a full-time job, or as part of a larger property management sort of organization. So, and this has quickly changed. This didn't used to be this way even two years ago. As it kind of follows my story, I had one property was like, "Oh, my God, I'm making three times my rent on this property." Went to 2 properties, went to 10 properties and next thing I knew, I quit my job and I was a full-time Airbnb host. And so a lot of people are kind of following that same trajectory and seeing a lot of profit in this industry and kind of following that same path.

Scott 19:57

So, yeah, we were talking about the urban versus non-urban locations, and this is like a dual access, definitely not the same, but what we are seeing is the growth rate outside of urban markets is starting to outpace the growth rate in the urban markets. And this is a very conscious effort by Airbnb. I hear by talking to property managers across the US, and channel managers, and pretty much everybody in the ecosystem that Airbnb is very actively pursuing supply that is in traditional vacation rental markets with less regulation, less chances of regulation, less friction with the local residents, and they're finding that to be a very easy way to grow supply with as few PR headaches as possible, right? So it is interesting to see that that is starting to outpace the growth of the urban markets here.

Rohit 20:59

And do you see this kind of non-urban growth outpacing urban growth as just a US phenomenon or is it global?

Scott 21:11

It's definitely a global phenomenon, and from what I hear from the marketplace, there's a kind of segment in the vacation rental world that's called the channel manager, and these people manage a bunch of different properties, hundreds of thousands in some circumstances, that are kind of spread out throughout Europe. And Airbnb approaches these guys to try to get their inventory on the Airbnb. In many cases, they're telling these guys, "Hey, I don't want your London properties. I don't want your Paris properties. I don't want your Barcelona properties. Those are giving us too much of a headache. I want all of your cottage homes in the countryside and I'll take those on today but I don't want your urban properties. It's creating too much of a headache for us." That's kind of what I'm hearing from the crowds. This is definitely throughout Europe, you're going to see the same trends.

Rohit 22:03

Okay.

Scott 22:06

So business travel, It's a hard thing to get to from our data, but we do some things to get to it, which I'll explain in a second. But these are just some stats, basically, from Airbnb-- 10 million business trips in the last 12 months. We think this is growing slow and steady. Our data, it's really hard to say how quickly this is growing. We don't really have the user profiles and understand the intent of trips. We do some things that look at length of stay and, for example, we look at stays that are originating on a Sunday, Monday, or Tuesday that last three days or less. That seemed to be a good proxy for what a business travel-- for the kind of core business travel that hotels really want to hold onto looks like. And when we look at that analysis, we see very flat, sort of, growth on that sort of stay. So in our data we can't see a ton of growth for short stays mid-week. But from other companies we know that are joining Airbnb, we know they're doing a fairly successful job of bringing on companies as an alternative for their employees to stay at hotels. They have the option to stay at an Airbnb. Mostly we see people choosing Airbnb for business travel for longer stays, when people are going to be on-site for a week, or for a month, to train up a new staff, or open up a new office. This is the kind of business travel that we think Airbnb is going to start really owning a high percentage of long term. So just like consultants and people that are going to be on-site for a week plus are definitely gravitating towards Airbnb.

Rohit 23:57

SYes, I do see that in the mobile app push as well. Over the last few months, as in I use more Airbnb for weekend trips to [inaudible] and [inaudible] local. But every time you open the app, they do ask us to-- ask the users to fill out your work email address, and if you use Airbnb for work there are more incentives right now. So this clearly seems to be a strategic initiative for them.

Scott 24:29

Yeah, no. Yeah, definitely agree. And so one of the interesting things I continue to hear when I talk to hotel industry analysts is that loyalty programs are really what's going to keep those business travelers sticking with the hotels that they have built their rewards programs with. And, yeah, I think it's an interesting stat from a Focus Right customer survey that 36% of hotel loyalty guests have used Airbnb. And while this might be slightly skewed because probably hotel loyalty program members just travel more in general, I think it kind of follows this point that we just talked about, is that when Airbnb makes sense for your trip, or you're going on a trip with your family, or you're going to go on a longer trip, you're still choosing Airbnb for that trip. If you're going to be one night for a conference, obviously Airbnb doesn't make sense. But I disagree with the kind of thought that nobody's ever going to use Airbnb because they have some loyalty points. And often to the contrary, when I traveled to New York a couple weeks ago, I booked my Airbnb with my Amex card, and I got three points for my trip for future Airbnb stays through Amex, and I also got Delta rewards because I went on Delta. So what Airbnb is doing is, I'm not going to have my own loyalty program, but I'm going to partner with all these other banks and rental car companies and airlines. And I'm going to create a bunch of incentives and loyalty programs that are more third-party loyalty programs, which is a pretty smart move on their part.

Scott 26:16

So, yeah, I think another huge area for growth for Airbnb is getting into these longer-term stays. When you go to this new part of their website which they recently launched, it's basically for sublets, 30-day or longer stays, and, obviously, right in the search box they put San Francisco, the markets where they-- it is basically illegal to stay for less than 30 days. So we see this growing quickly. And we see that Airbnb is going to expand not just into these four-night stays but they're really going to start taking over some serious market share on these longer, sort of, sublets. And for markets that are highly regulated this is going to be a decent way for my friends in Los Angeles, and New York, and other places. They've actually been able to maybe get 80% of their income from doing a one-month stay instead of a one-night stay. And so it isn't as lucrative, and so not that many people are going to take on investment properties and throw them on Airbnb, because the numbers don't make sense if you have to rent on a monthly basis. But we see a lot of green space for them to go into, in terms of taking some market share on these sort of sublets. And then, the money they can create from these bookings is pretty massive, right? One $5,000-a-month stay creates some pretty nice, healthy fees for them, as well. So this is a new thing that they just released recently so I thought it was worth noting, but it's still a very small part of their overall business with only 0.6% of rentals across the US requiring a 30-night minimum stay. We think we're going to see that grow as more people are looking to Airbnb for more longer term stays.

Scott 28:07

So Section One isn't from my data, but I think that's always an interesting point to really think about - what is driving the growth of Airbnb and, obviously, consumer choice drives the growth of Airbnb. And so exactly why people are choosing Airbnb is not typically what people think about. It's not because you're just getting a great deal. It's really because, one, you're traveling to some place where there isn't a nice hotel that's a walkable distance, right? So this convenient location thing pops up all the time, right? I am going to go visit my sick grandmother in the hospital, and there's an Airbnb 20 steps away from the front door. I'm going to go stay there. Or for a college graduation, or for a music festival, whatever. That convenient location for visiting your in-laws, or whatever, is really a huge reason people are choosing Airbnb. And also I think the other important thing to think about is that it's not really about price why people are choosing Airbnb, it's really about the value. So, they're thinking about how much more square footage they're getting, what kind of a balcony, and the washer and dryer, the access to a kitchen, and all these things they can't get for the same price at a hotel. So when we look at the price difference between the hotels and Airbnb for similar size units, there's not really that big of a gap in most of the major markets. It might be 20 bucks for a kind of a one-bedroom Airbnb versus the average hotel in the area. But what they're getting is triple the square footage, and the balcony, and a kitchen, right? And so that's why a lot of people are choosing the platform.

Scott 29:44

And so this is an interesting slide that I worked with CBRE hotels on trying to figure out how to quantify really what the impact is on traditional hotels. So we did this in kind of three ways. We looked at it in terms of just how many Airbnb properties there are versus hotel properties in the area, right? And so that's what we're calling this market supply index is, for example, in New York, 21.6% of the overall lodging market there is made up by Airbnb units, which is a big number. And then there's this ADR premium index, kind of falling on a point. As I said earlier, there's not a huge discount in a lot of these markets on what the average Airbnb goes for. So this talks about the ADR difference and then just the growth rates, in how quickly is Airbnb growing year after year in terms of this total market supply. So we try to quantify this and rank the top 15 markets that we saw as being potentially heavily impacted, impacting hotels today and over the next couple of years. And so I think this is the best way that we could really think about what happens to the hotels in these markets long-term, and what's going to be the impact to them? And really, I think you hit on a fact that I believe in wholeheartedly, is that there is going to be a softening in the lodging market, and it's going to fuel even more growth. General downturn in the economy is going to fuel even more growth about Airbnb. More supplied Airbnb is going to create reduced ADRs, more supply, more competition, which is going to have a large effect on hotels. And so we can already see that happening at the markets like Houston, which are seeing double-digit declines in RevPAR, but triple-digit increases in Airbnb properties. And so, I think that's really the interesting thing to look forward to over the next year or two is really how this magnifies the issues of lodging in a downturn.

Rohit 32:08

Okay, Scott. Quick question-- not great with numbers. So the basic point of the slide is that you think that anything at the top of the list are the places where traditional lodging is impacted most, and anything at the bottom of the list are the ones that you think traditional lodging is not as impacted. Is that the right interpretation?

Scott 32:34

That is correct. These are ranked from the top markets. I believe we looked at the top 25 markets and just ranked them from, yes, most impacted is number 1, and least impacted is number 15 here.

Rohit 32:50

Super. Okay. So I guess we are at the end of Scott's prepared slide deck and we have about 10 minutes for questions. So in case anybody on the line has any questions to ask of Scott or me, but mostly Scott, please type away, and we will start coordinating questions. And while we do that, why don't, as another kind of-- the question about churn rate of listings, as in-- do you have any sense as to why or what the rate of churn is in terms of-- if I list a property today, I am not exactly a professional manager. I list it out for maybe 5 nights a month, maybe 10 nights a month next month, and it's just too much hassle, and I decide to take my property off of Airbnb. Is that something that you can track or estimate?

Scott 33:49

Yeah, it definitely is something that we track, and, I mean, the general number is that we see 20% of properties in the US either appearing or disappearing in a given month, right? So it is a high churn rate [laughter]. So there's a lot of people still using Airbnb as it was originally intended. Just turning on their property when they're going to be away for a weekend, or for a week, or going on a trip. It's just turning on their properties maybe only three times a year. And so, churn is really difficult to-- what does that all mean, right? Is it meaning that just people have their listings already created, so it's super easy to push a button and make some money on your property? Then that's a really good thing. I mean, it's a very elastic supply for Airbnb, and they can add supply and take away supply very fluidly. So I don't think it means that people are hoping to make a ton of money on Airbnb, putting their properties up, saying it's a bust, and then taking their properties off. It is just more-- there's obviously a lot of growth month to month, and there's a lot of people just using the platform as it was intended. So, in general, we see about 20% of properties appearing or disappearing in a month.

Rohit 35:12

Okay, okay. One question we have from speakers is do you have any thoughts on Airbnb's other initiatives like trips? Or in November or October of their annual conference, I think the CEO of Airbnb did kick off the conference with a pretty splashy advertising campaign about these new elements on Airbnb, and where you can interact with the host and all those kind of things. Did you track any of those things, or any opinion, or data to support whether that's being a big success or blah'?

Scott 35:57

Yeah. No, we haven't really gotten into the trips tracking of it yet. We kind of want to wait for it to become a bit more stable in their platform so we can figure out exactly how to track it. For the short term, we think it's going to be a very minimal piece of their income. In general, I think, the trips-- Brian Chesky has this vision of owning the travel experience from the time you walk out your front door to the time you return, right? And the trips piece fills that huge void in the middle of your trip when you check into your place and what you do before you check out, right? So for them, Brian, he sees this as a huge differentiator for his company. A way to kind of separate himself from a maybe an OTA or a hotel experience. That you are planning your whole vacation via Airbnb and all the cool stuff you're going to do when you travel. And so it makes a lot of sense, I think, from that perspective, from a differentiating perspective. But from an actual profit-generating sort of business? It is a serious headache to manage thousands of people that are going to do your surfing lesson, and your stargazing, and your blowing glass sort of activities. And so, I mean, in general, I see this as being a loss leader [laughter] for them to kind of get more people to use their platform for lodging. So, yeah, over the next six months or so we'll start tracking the activities. They have calendars just like listings, so it'll be possible to track. We just think it's going to be such a small portion of their revenue it's probably not worthwhile for the next year or so to really get a handle on it.

Rohit 37:38

Okay. Another question we got on the line over here is about sublets. As in this may be more of a mechanical question, but does Airbnb work directly with kind of landlords to handle sublet payment? And maybe I'll add one more question on data is do you have a sense of how many listings, or how many room nights are entire home versus subletting a room inside my house?

Scott 38:12

Sure, yeah. Now, all the stats that we-- we try to really focus on the entire home numbers throughout this sort of presentation here. Yeah, mostly because private rooms and shared rooms just we don't see are having a huge impact on anything else, right? On timeshares, or extended stay hotels, or traditional hotels. We think it kind of has created its own market and it really isn't impacting sort of traditional lodging. So but just in general, there are some high-level numbers, right? 66% of all listings on Airbnb are entire homes, and probably closer to 75% of all room nights and just basic demands are coming from those entire home rentals.

Rohit 39:01

Yeah, kind of makes sense. Okay, I guess-- one more question we got on the line here is on competition. As in, is there a-- I know you track only Airbnb, but do you see any evidence of larger online travel companies or hotels with vacation rental things can affect Airbnb directly, and kind of to ask in a more direct manner is, are companies like Expedia and Priceline affecting Airbnb in pockets, overall - any evidence?

Scott 39:49

Yeah. I can only really talk anecdotally about it from property managers that are listing across all platforms, and the success and the failures they're having across those platforms. Probably most people on this call have a better insight about the actual growth of each platform and how that they're kind of impacting each other, but, I mean, what little we see is that Airbnb used to have a pretty novel approach to how quick you can book a place, and having it being instant bookable, and how pretty the site was, and how great the user experience was. But other people are catching up pretty quickly with that, moving to instant book, not having to deal with calling people or waiting for two weeks of back and forth. And so as people start to emulate the Airbnb model, we're seeing that-- I see, and most of the people that I know that manage 100 or 1,000 properties, are seeing these platforms as interchangeable now, for the most part. And with the emergence of this channel manager sort of role that fits in between a property manager and the booking platforms, it becomes so simple now to create one listing and market it across 40 different platforms.

Scott 41:07

And so really what all these people are really competing for is just going to come down to eyeballs - who can do the best SEO and CTC, and who can get the people in the front door. It's becoming a little bit less relevant for people and what channel they're booking through. And so people in the US that I know that have properties, what their success has been has really been based off of where they're based and the type of property that they have. Right? So I know people in Lake Tahoe, that went to HomeAway, they have a ton of success in HomeAway. They do at least 50% of their business on HomeAway versus Airbnb but you talk to people in the middle of - I don't know, I live in Denver - so, let's take Denver as an example, You'll get 90+% of your reservations coming through the Airbnb. So if you had to go one-bedroom apartment in kind of an urban center, Airbnb is still dominating that because that's the kind of consumer-- millennial, 20s, and 30s, want to go party for a weekend in the city, that's the platform that they're using. So the success has really been just based off of the location and the type of property. Basically, it's the demographic that feels with comfortable or feels like they identify with whatever platform. So it's going to come down to just a marketing and a CTC sort of play. That's the way I see it, they're going to become interchangeable. There's so much convergence here, the experience between one of those platforms becomes almost nonexistent at some point in time.

Rohit 42:45

Okay, super. We are over time and we have a few more questions, I'll shoot them over to you, Scott, but again, I just want to be careful of everybody's time here on a Friday morning and more importantly, be careful of your time as well, Scott. So I think this was very, very insightful and very helpful. So thank you so much for walking through the presentation, as well as answering a whole bunch of questions on the line. So thank you so much, and thank you, everybody, for joining us on this Friday. We will have a replay, a transcript, and all the good stuff available on our website shortly. And I am very happy to connect anybody who wants to connect directly to Scott and he's also given me his personal mobile number, so I think he's more than happy to talk to anybody about all things Airbnb. So, Scott, any last words?

Scott 43:47

No, just thanks for having me. It was great to be invited, so I appreciate it.

Rohit 43:51

Okay, thank you. Happy Friday and have a great weekend everyone, from here at SharesPost. Thank you.

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Analyst compensation is based upon various factors, including the overall performance of SharesPost, Inc. and its subsidiaries, and the performance and productivity of such analyst, including feedback from clients of SharesPost Financial Corporation and other stakeholders in our ecosystem, the quality of such analyst’s research and the analyst’s contribution to the growth and development of our overall research effort. Analyst compensation is derived from all revenue sources of SharesPost, Inc., including brokerage sales.

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This report does not contain a complete analysis of every material fact regarding any issuer, industry, or security. The opinions expressed in this report reflect our judgment at this date and are subject to change. The information contained in this report has been obtained from sources we consider to be reliable; however, we cannot guarantee the accuracy of all such information.

Any securities offered are offered by SharesPost Financial Corporation, member FINRA/SIPC. SharesPost Financial Corporation and SP Investments Management are wholly owned subsidiaries of SharesPost, Inc. Certain affiliates of these entities may act as principals in such transactions.

Investing in private company securities is not suitable for all investors. An investment in private company securities is highly speculative and involves a high degree of risk. It should only be considered as a long-term investment. You must be prepared to withstand a total loss of your investment. Private company securities are also highly illiquid and there is no guarantee that a market will develop for such securities. Each investment also carries its own specific risks and you should complete your own independent due diligence regarding the investment, including obtaining additional information about the company, opinions, financial projections and legal or other investment advice.

Accordingly, investing in private company securities is appropriate only for those investors who can tolerate a high degree of risk and do not require a liquid investment.

SharesPost, the SharesPost logo, My SharesPost, the SharesPost Index, and SharesPost Investment Management are all registered trademarks of SharesPost, Inc. All other trademarks are the property of their respective owners.

Copyright SharesPost, Inc. 2019. All rights reserved.

PLEASE READ THESE IMPORTANT LEGAL NOTICES & DISCLOSURES

CONFLICTS

This report is being published by SharesPost Research LLC, and distributed by SharesPost Financial Corporation, a member of FINRA/SIPC. SharesPost Research LLC, SharesPost Financial Corporation and SP Investments Management, LLC, an investment adviser registered with the Securities and Exchange Commission, are wholly owned subsidiaries of SharesPost, Inc.

Recipients who are not market professionals or clients of SharesPost Financial Corporation should seek the advice of their own personal financial advisors before making any investment decisions based on this report. None of the information contained in this report represents an offer to buy or sell, or a solicitation of an offer to buy or sell, any security, and no buy or sell recommendation should be implied, nor shall there be any sale of these securities in any state or governmental jurisdiction in which said offer, solicitation, or sale would be unlawful under the securities laws of any such jurisdiction.

This report does not constitute an offer to provide investment advice or service. Registered representatives of SharesPost Financial Corporation do not (1) advise any member on the merits or advisability of a particular investment or transaction, or (2) assist in the determination of fair value of any security or investment, or (3) provide legal, tax, or transactional advisory services.

ANALYST CERTIFICATION

The analyst(s) certifies that the views expressed in this report accurately reflect the personal views of such analyst(s) about any and all of the subject securities or issuers, and that no part of such analyst compensation was, is, or will be, directly or indirectly related to the specific views contained in this report.

Analyst compensation is based upon various factors, including the overall performance of SharesPost, Inc. and its subsidiaries, and the performance and productivity of such analyst, including feedback from clients of SharesPost Financial Corporation and other stakeholders in our ecosystem, the quality of such analyst’s research and the analyst’s contribution to the growth and development of our overall research effort. Analyst compensation is derived from all revenue sources of SharesPost, Inc., including brokerage sales.

DISCLAIMER

This report does not contain a complete analysis of every material fact regarding any issuer, industry, or security. The opinions expressed in this report reflect our judgment at this date and are subject to change. The information contained in this report has been obtained from sources we consider to be reliable; however, we cannot guarantee the accuracy of all such information.

Any securities offered are offered by SharesPost Financial Corporation, member FINRA/SIPC. SharesPost Financial Corporation and SP Investments Management are wholly owned subsidiaries of SharesPost, Inc. Certain affiliates of these entities may act as principals in such transactions.

Investing in private company securities is not suitable for all investors. An investment in private company securities is highly speculative and involves a high degree of risk. It should only be considered as a long-term investment. You must be prepared to withstand a total loss of your investment. Private company securities are also highly illiquid and there is no guarantee that a market will develop for such securities. Each investment also carries its own specific risks and you should complete your own independent due diligence regarding the investment, including obtaining additional information about the company, opinions, financial projections and legal or other investment advice.

Accordingly, investing in private company securities is appropriate only for those investors who can tolerate a high degree of risk and do not require a liquid investment.

SharesPost, the SharesPost logo, My SharesPost, the SharesPost Index, and SharesPost Investment Management are all registered trademarks of SharesPost, Inc. All other trademarks are the property of their respective owners.

Copyright SharesPost, Inc. 2019. All rights reserved.