• Brett Schafer

Deep Dive: Alex Morris Discusses Airbnb

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  3. Apple Podcasts

Show Notes

Alex (otherwise known as the Science of Hitting on Twitter), came back to talk about one of his new write-ups on Airbnb. You can check out his premium Substack newsletter here. These are some of the questions we asked Alex on the episode:

  1. Most listeners know the Airbnb brand, but may not know how the business model works. Can you explain how Airbnb makes money?

  2. You called Airbnb a “different kind of animal”? Who are their main competitors? What makes them unique?

  3. How have the financials been impacted from 2019 – now with COVID severely affecting demand?

  4. Management has given out lots of data around longer term/monthly stays growing quickly. How much of an opportunity do you believe that is?

  5. Thoughts on management

  6. This is a very newsy company, with complaints like bad room quality, hidden fees, and abrupt host cancellations coming up a lot. Do you believe those matter to the investment thesis?

  7. The company was ramping up Experiences pre-COVID. How has that product evolved? Does it matter to the business?

  8. Chesky has mentioned that they had dozens of products incubating before COVID hit that had to be postponed. In your view, what has the most promise financially to be added on top of the Airbnb platform?

  9. Chesky talked about “trimming the fat” due to COVID. How do you think that will impact the business over the long-term?

  10. How do you go about valuing Airbnb? What key metrics (financial or non-financial) are you tracking? Can they get to the 30% EBITDA margin like the OTAs?

  11. What risks do you see to Airbnb’s business?

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Disclosure: The author and podcast guests are not your financial advisors. Ryan Henderson and Brett Schafer are general partners and portfolio managers at Arch Capital. Clients of Arch Capital may hold securities discussed on this show.

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