The sharing economy has changed the way we stay, work, and play. From ride-hailing apps to short-term house rental services like Airbnb, our lives are becoming more interconnected. This change has not come without controversy. Airbnb is a perfect example of this trend. It’s also one of the most expensive ways to travel. But it can be a great investment for some people. Is Airbnb a good investment? Read on to find out!
The Growth of Airbnb
Airbnb’s rise to success is one of the best-kept secrets in the stock market. The company provides short-term lodging services. Homeowners rent out their property on Airbnb to earn extra cash. This comes in addition to what they make from renting out the house on a nightly basis. As a result, Airbnb is now a billion-dollar company. In 2015, the company had $2.6 billion in sales.
“We believe everyone should have the opportunity to share their home,” says Airbnb.
Airbnb serves a lot of travelers. In fact, over 2.5 million of them stayed in one of their 2 million listings last year. It is the third-largest online travel agency, trailing only Expedia and Priceline.
Airbnb CEO Brian Chesky called the listing growth “staggering”.
What Would Happen if the Government Regulates Airbnb?
Airbnb is growing like wildfire. The company just passed a milestone, where it opened its 3 millionth apartment in 80 countries. Airbnb sees enormous potential. The company wants to take over the entire hospitality market.
However, Airbnb would not be allowed to grow into its potential if governments all over the world didn’t allow the short-term rental marketplace. Just this week, Australia put a moratorium on Airbnb in order to study its effects on affordable housing.
Canadian authorities are concerned about Airbnb’s effect on the affordable housing market. As a result, they are expected to soon announce new regulations on Airbnb and other short-term rental platforms.
In Germany, Airbnb is already banned in some cities. They’re looking to ban Airbnb altogether.
How to Invest in Airbnb
Airbnb has grown at a fast pace and is now available in around 65,000 cities in 191 countries. This is impressive growth but nothing compared to the company’s progress. Airbnb was launched in 2008 and currently has a market cap of $30 billion. That’s over 40% of the world’s five major hotel companies, according to J.P. Morgan Chase. (1) The airline industry, and every stock exchange in the world. (2)
However, this simple answer doesn’t tell the whole story. Many people don’t understand the intricacies of how a lot of the sites work. This is where I come in.
I studied supply and demand economics, financial mathematics, and technical analysis. I then went on to work in the field for many years.
Buy Airbnb stocks
To find out if this trend is for you, I want to start by mentioning a few facts. In the most recent quarter, the company had $2.45 billion in gross bookings.
Airbnb’s user base has doubled in the last three years, from 72 million users in 2016 to 156 million in 2018. In that same time, the average home rental revenue has grown from $6,700 to $14,700. Those aren’t small numbers, and they reflect the importance of this company to the entire industry.
Advantages of Airbnb Stock
Airbnb’s biggest advantage over other sharing economy companies is the trust it has established in the minds of the public. Most people now view the company as an alternative to hotels. This has led to continued growth in the number of people using Airbnb.
Invest in an index fund that has a stake in Airbnb
First, we need to consider why this company can be a good investment. For one thing, it’s doing very well financially. For the second year in a row, Airbnb enjoyed its most successful year of revenue ever in 2018. The company’s revenue climbed from $2.3 billion in 2017 to $3.3 billion in 2018.
Additionally, Airbnb increased its net income from $65.6 million in 2017 to $142.3 million in 2018.
Airbnb may still be in its infancy, but it has huge upside. As a quick look at Airbnb’s top competitors suggests, Airbnb may have even more room to grow. Booking Holdings (NASDAQ: BKNG ) lost $66 million in the third quarter of 2018, after a loss of $109 million during the same period in 2017.
Airbnb, on the other hand, is profitable. It earned $303.
Rent out your home on Airbnb
Airbnb is a website where travelers can make money renting out a room or a house. This can be a great way to take advantage of the “sharing economy.” Many people believe that online sharing is better than offline sharing. In fact, in a survey conducted by YouGov last year, 59% of respondents said that online sharing is better than offline sharing.
The main selling points of Airbnb are ease and convenience. You can make money renting out a room in your house without ever leaving home. Of course, this convenience comes at a cost. A typical Airbnb rental fee is usually 10% of the rental price.
Airbnb has taken steps to improve their service. For example, they are now able to detect under- or over-booking of rooms. So, travelers shouldn’t be at the mercy of scammers.