Post by High Priestess on Oct 6, 2015 6:10:29 GMT
Peter shared Oct 5 2015
Thinking Of Investing In Hotel Stocks? Save Your Money For The Airbnb IPO
"For years, growing industry consolidation and a limited supply of rooms allowed the hotel industry to enjoy a great deal of pricing power. That was translated into robust revenue growth, and hefty operating margins.
Then came online sites like Expedia EXPE + 1.25% and Priceline.com, which helped consumers pit one hotel company against another – limiting the power pricing of the industry, while taking a good chunk of revenues from the industry in the form of commissions.
Will this turnout to be the case with Airbnb?
We cannot say for sure. What we can say is that Airbnb’s threat to the industry is still new. So it is too early to determine the full impact the company will have on future hotel revenues and margins.
In the meantime, I’d rather wait for the Airbnb IPO than buy into hotel stocks at this point."
Click here onforb.es/1Lc5nQL for Forbes article.
My two cents: The interesting question is whether and to what extent it is better to invest in hotel sites like Expedia versus home sharing sites like HomeAway or Airbnb (if and when it goes public).
Keith:
Another problem is that airbnb is creating such vast inventory the financial incentives to host are dwindling.
Since airbnb revenues are driven by pricing this will affect their bottom line and margins as well.
In addition hotels still win on consistency.... Your experience at one Marriott will be very similar to your experience at another. This isn't true with airbnb listing--even at similar price points relative to a market.
This will all make airbnb a very risky investment
Thinking Of Investing In Hotel Stocks? Save Your Money For The Airbnb IPO
"For years, growing industry consolidation and a limited supply of rooms allowed the hotel industry to enjoy a great deal of pricing power. That was translated into robust revenue growth, and hefty operating margins.
Then came online sites like Expedia EXPE + 1.25% and Priceline.com, which helped consumers pit one hotel company against another – limiting the power pricing of the industry, while taking a good chunk of revenues from the industry in the form of commissions.
Will this turnout to be the case with Airbnb?
We cannot say for sure. What we can say is that Airbnb’s threat to the industry is still new. So it is too early to determine the full impact the company will have on future hotel revenues and margins.
In the meantime, I’d rather wait for the Airbnb IPO than buy into hotel stocks at this point."
Click here onforb.es/1Lc5nQL for Forbes article.
My two cents: The interesting question is whether and to what extent it is better to invest in hotel sites like Expedia versus home sharing sites like HomeAway or Airbnb (if and when it goes public).
Keith:
Another problem is that airbnb is creating such vast inventory the financial incentives to host are dwindling.
Since airbnb revenues are driven by pricing this will affect their bottom line and margins as well.
In addition hotels still win on consistency.... Your experience at one Marriott will be very similar to your experience at another. This isn't true with airbnb listing--even at similar price points relative to a market.
This will all make airbnb a very risky investment