Surface Magazine just republished this 2016 interview with Arne Sorenson. Sorenson was CEO of Marriott, but sadly passed away this week after a battle with pancreatic cancer.
One of the questions he was asked in the interview was about the rise of Airbnb. This is how he responded:
"It’s fascinating. I hope we’re not as exposed to this as the taxi industry is right now. Taxis in many cities are awful and hard to find. So here comes Uber with a better product. In the hotel business, I still think we can deliver better service, so we don’t have quite the same risk. Airbnb is fascinating. Increasingly, it’s less personal, and there are more dedicated units. The more they get into that space, they become a competitor. The story isn’t over, but we’re set up to compete well."
Taxis were awful and that business model is done for good. But how do Sorenson's comments about Airbnb hold up today?
Marriott ended up launching its own home sharing platform in 2019, but it's comparatively small as I understand it. There are also no shortage of bull cases for Airbnb (and just look at its market cap).
But there are also headwinds. Barcelona, for example, is looking to permanently ban people from renting out private rooms on a short-term basis (< 30 days). This is even if the rest of the home remains owner occupied.
So what use cases remain? Only extended stays?
If I look at my own pre-pandemic travel record, I am largely in the hotel camp. I like the consistency and I like certain brands. But maybe that's just me getting older. What do you all think? Leave a comment below.
Side Gallery opened up a new 700 square meter exhibition space in Barcelona last month that is worth showcasing. It's a beautiful space. Designed by Spanish architect Guillermo Santomà, the space sits within an old 19th century factory that used to house an Italian pasta company. It's minimal and stark white, but the architecture of the former factory still comes through. There's also a prominent greenhouse featuring flora that is local to South America. Fitting given that the gallery focuses on Latin American design. Have a look.
I also love these images from the architect, which (I think) use light to completely transform the space.
All photos via Side Gallery and Guillermo Santomà
Airbnb's IPO documents recently went public.
Not surprisingly, their business as a travel company has been heavily impacted by COVID-19. Last year, the platform saw 326.9 million nights and experiences booked, with 251.1 million being booked in the first nine months of 2019. This year, nights and experiences are down to 146.9 million for this same nine month period. Revenue is correspondingly down from $3.7 billion for the first nine months of 2019, to $2.5 billion for the first nine months of this year.
But what is also clear from their data is that people still really want to travel and have new experiences. As soon as April passed and the Northern Hemisphere entered the normally busy Q3 travel season, domestic travel began to quickly ramp back up. For many, this likely took the place of international travel. See above chart.
Of greater concern might be all of the regulation that now surrounds short-term rentals. As of October 2019, about 70% of the platform's top 200 cities (by revenue) had some form of regulation impacting short-term rentals. But at the same time, no one city accounts for more than 2.5% of the platform's revenue. So there's strong geographic diversification.
If you'd like to take a look at the company's S-1, you can do that over here. And for those of you who might be curious, these are Airbnb's top 10 cities based on revenue:
London
New York City
Paris
Los Angeles
Rome
Barcelona
Tokyo
Toronto
San Diego
Lisbon