Airbnb and Crypto Parallels
What do AirBnB and Crypto have in common? Both boomed and have fallen significantly from the top. So, are they going to die or come back?
Where Airbnb goes from here
AirBnB’s failure to control egregious fees and checkout tasks damaged the company’s credibility. AirBnB was a unique, trendy, and cost-effective tool when you needed more than one hotel room. Customers have had too many bad experiences and are speaking with their wallets. Airbnb bookings are down almost 50% in some cities.
The Airbnb collapse is real.
— Nick Gerli (@nickgerli1) June 27, 2023
Revenues are down nearly 50% in cities like Phoenix and Austin.
Watch out for a wave of forced selling from Airbnb owners later this year in the areas hit hardest by the revenue collapse. pic.twitter.com/xjGkj7bFC5
Brian Chesky, the founder and CEO of Airbnb, has doubled down on the most unique aspect of the platform – booking individual rooms. Renting out a single room was how AirBnB started, and it’s the most defensible part of the company’s business. Hotel chains can’t compete with how cheap renting a room in someone’s house is. This means that renting a whole home or apartment on Airbnb will probably not be the company's future focus. It makes sense if you think about it – how is AirBnB different from VRBO or Vacasa for whole-home rentals? It’s not. The competition for niche features or regions in that market segment will be at the edges. For example, Vacasa seems to have the market on ski resort areas cornered.
Where Crypto goes from here
Similar to Airbnb, crypto’s lack of regulation led to the collapse of major platforms like FTX, creating an industry-busting domino effect. The bust was sad to watch because Brian Armstrong, [both CEOs here are named Brian? Coincidence?], the CEO of Coinbase, has been begging the SEC for regulation or basic rules. The SEC has continuously declined to provide guidance, and crypto companies and customers are worse off for it. I’ve had to deal with annoying legal procedures and frozen accounts at Voyager, Hodlnaut, Celsius, and BlockFi, all of which went bankrupt.
Crypto is not going anywhere (sorry, lol), especially Bitcoin. The king of all cryptos is a lot like real estate. It can have its major swings, but it’s incredibly resilient. Every ~10 minutes, Bitcoin’s decentralized network of computers worldwide confirms another block of transactions in the blockchain. Bitcoin will experience another pre-scheduled “halving” in mid-2024. Expect the price to increase around that time.
Wrap Up
Airbnb and crypto are here to stay, but they will look different in the future than they do today. Free markets are incredibly efficient at eliminating bad products and services. Now and later, it’s probably a bad time to be a property owner of a whole-home Airbnb rental. You may be able to do better on a different platform. It’s also probably a bad time to buy many different cryptocurrencies. But for the pieces that have consistently worked well? It will continue to be smart to rent a spare room on Airbnb or buy Bitcoin over time.
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