6 ms·

How Airbnb measures listing lifetime value

96 points by benocodes 1y ago

epolanski 1y ago
Why do they publish blogposts on such a lame paywalled website though...
- josefritzishere 1y ago
  Seems pretty consistent with their revenue model.
- deleted 1y ago
  [deleted]
- tomhow 1y ago
  Is this post paywalled for you? Or is there just a signup/login banner that you can dismiss? If there's a paywall we'll pin a workaround at the top.
  - SSLy 1y ago
    My User Agent goes around the paywall easily.
- JohnScolaro 1y ago
  I was wondering that too! Surely Airbnb - a company that runs a website - has the capability to put a text post on their own website. Then they'd own the content, and people looking for it could find it easier? It's not a revolutionary concept either, Facebook has one: https://engineering.fb.com/ https://engineering.fb.com/ Wait, Airbnb already has one? https://airbnb.io/ https://airbnb.io/ Genuinely confusing.
  - echelon 1y ago
    > Why Distribution. The reason for this blog post is "recruit engineers". Not every engineer is going to visit blog.airbnb.com, but presumably a lot of them are already on Medium. They even close the article with, > We continue to solve interesting problems around LTV every day (and as more insights come up, we’ll keep sharing them on our blog). Can you see yourself making an impact here? If so, we encourage you to explore the open roles on our team. These blogs are always about recruiting.
    - philipwhiuk 1y ago
      Why would I pay for a paywall to read a job ad?
      - merricksb 1y ago
        There’s no paywall. It’s totally free to read. The popup is just a prompt to join/sign into Medium but you can close it.
- deleted 1y ago
  [deleted]
esafak 1y ago
I would have liked more discussion on handling uncertainty; how big is it, how well calibrated is it, how are they approaching variance reduction, how do they reduce the predictive distribution into decisions, etc. And no discussion of causal inference in the marketing section.
maxrmk 1y ago
I feel like this is missing a really important factor: how likely are guests to use airbnb again after staying at a listing? A listing could look great online and receive a lot of bookings (so high LTV), but ultimately drive users away from the platform. A certain ad platform I worked on cared a lot about this - offensive ads could get you to quit the site altogether. You might want to count every ad as positive for the company since you make money, but some might actually be negative expected value! As a side note, I think this is a really undermeasured problem. There are many sites I won't use because the ads are so overwhelming or are often offensive.
- MajimasEyepatch 1y ago
  In the case of Airbnb, wouldn't that show up in the listing's reviews, requests for refunds, etc. and ultimately drive down the listing's LTV? Nobody leaves reviews on an ad, and I imagine that very few users report inappropriate ads, so you can only measure that indirectly. But if somebody books an Airbnb and has a bad experience, they are much more likely to give you direct feedback about it.
  - maxrmk 1y ago
    I think it could show up in those other places, but probably isn't fully captured? Imagine an airbnb that's great for most guests but absolutely terrible for 1 in every 5, so bad that they quit airbnb. Maybe it's next to a music venue, so every once in a while it's very loud. It's possible it could maintain a decent average star rating and LTV as described in the article but actually have negative (real) lifetime value for airbnb if the 1 in five that they lose would have spent a lot of money on the platform otherwise.
  - Nextgrid 1y ago
    Bad reviews are often moderated away and refund requests are stonewalled (and few people know about chargebacks so that isn't factored in). It is easier for the platform to acquire guests than hosts, so the platform takes the side of hosts. Edit: at least that was the situation a couple of years ago. A host below now reports that the situation has changed and they take the side of the guests; however, either way it's open to abuse no matter which side they take. The issue is that in a marketplace where both sides can be dishonest, the only way to ensure quality is to do spot checks by trusted actors (aka company employees) where the penalties for failing such a check are dissuasive enough that it becomes more profitable to play by the rules. This is similar to how law enforcement is supposed to operate - the reason the penalty for theft (for example) is more than merely returning the stolen items is that since law enforcement can't observe everyone all at once, the penalty needs to be enough of a deterrent to make the bad behavior unprofitable overall, to discourage it even in cases where law enforcement isn't there to witness it and enforce said law.
kreyenborgi 1y ago
Man I'm so sick of trying to find something on Airbnb only to discover by the time I order that the price has doubled. Airbnb these last years went from feeling fresh and adventurous to scammy and dubious
- ceejayoz 1y ago
  Use the .com.au variant to find listings, as Australian law requires they list the full price, inclusive of tax and fees.
  - nickjantz 1y ago
    Meh, they're just complaining because it's cool to whine about AirBNB online these days, US based AirBNB has had this feature for quite awhile now.
  - thundergolfer 1y ago
    In New York the website recently updated to do this, presumably because they were forced to. They had a whole banner announcing it. I'm Australian and moved to New York recently-ish. It was one of those classic anti-consumer disappointments one experiences moving to the states. Glad they fixed it.
  - kreyenborgi 1y ago
    That's one thing, annoying but possible to work with. What I'm talking about is Dynamic Pricing. Had to look up what really happens: The host sets a rate-range, and Airbnb first gives the low price and then as you click around in the area they notice you're more interested so they increase it towards the high end of the price range (possibly also time of day and such signals?). Then I guess there's a slow cooldown. Like how a good haggle is made to give you a friendly relationship with the seller, this seems specifically designed to make people hate Airbnb and swear to never use it again.
- sabellito 1y ago
  Use booking.com, better in every way and customer support that won't stonewall you.
huevosabio 1y ago
Mega-tangent: As a host, I feel compelled to rant about Airbnb whenever they come up in a discussion. The last 2 years they have _really_ moved to squeeze the hosts. The customer service has been demolished and they seem to have taken a stance of "the guest is always right". I've spent countless hours going through their customer service as a super host, so I know I have a decent amount of anecdata. My suspicion is that they found themselves with more supply than demand, so they are "improving the guest experience" at the expense of the hosts. Since they are a quasi-monopoly (depends on the market) it makes sense for them to prune supply in exchange for better guest experience, a full market approach makes less sense since they make money in proportion to the total amount of money transacted (which as a monopoly it can optimize for in the way a free market can't). But I think this will blowback sooner or later. The biggest value for an Airbnb guest is the review system that allows you to have some degree of certainty of what you are getting. The biggest value for a host is the massive global audience. But guests and hosts, pay a steep fee (17%!) for this. For well-reviewed, long-living stays (like mine :)), paying 17% is way too much to access this audience: the listing already has an online record that provides that quality assurance for the guest, and the host could spend that money on advertising. So that's what many of us are doing, moving to PMS + paid advertising / SEO to diversify on distribution channels. I think there's an opportunity for capturing that semi-pro host market and bundling them in a similar offering that 1) doesn't squeeze them, 2) offers a proper PMS software, and 3) charges a flat fee instead of a variable rate.
- hbsbsbsndk 1y ago
  [flagged]
  - RandomBacon 1y ago
    An AirBNB host is not a landlord. Without landlords, you have no rental properties and everyone who can't afford to purchase their residence outright would have to find another option whatever that might be. (I have never used AirBNB.)
    - bavent 1y ago
doctorpangloss 1y ago
This isn't an LTV model, it's a regression model. Is it even good? Doesn't seem so. Maybe their folks need to punch "LTV" into Google Scholar. And also, is it even actionable? > For example, suppose we run a marketing campaign that provides hosts with tips on how to successfully improve their listings Right guys. “Marketing-induced incremental LTV” indeed.
- mrweiner 1y ago
  Yeah I thought the same thing. LTV defined as value over the next 365 days…so…not LTV at all?
cityzen 1y ago
Stopped reading at, “At Airbnb, we always strive to provide our community with the best experience.”
game_the0ry 1y ago
I wonder if you could use the same methodology to value potential investments in short term rentals.
iambateman 1y ago
Airbnb’s original promise was magical, thrilling, interesting - get to stay in unusual places that are full of charm and possibility. But that promise was broken for me when Commaleta played back the video of her front door camera and counted that we had 10 people walk in her door, not eight. She proceeded to accuse us of throwing a party, when we absolutely did not, and tried to charge us $1000 extra dollars. At that point, I decided that Airbnb’s hosts were too much of a wildcard in most travel situations. By the way, the story above is from 10 years ago and I will never forget her name for the rest of my life…she turned what should’ve been a relaxing, beautiful week into a miserable arbitration process. It’s hard for ABNB to succeed long term when one experience like that can ruin everything.
- gameshot911 1y ago
  Were 10 people in fact staying when the listing max was 8?
  - iambateman 1y ago
    No, a couple friends who lived in town stopped by for an hour.
    - courseofaction 1y ago
      Last month a first time host confabulated $1200 of maintenance charges. Having left the property already, I was in no position to produce evidence that they were fake. Arbitration was hopeless, I canceled my card and won't be using Airbnb again.
      - hintklb 1y ago
        Funnily enough I went through something similar 3 weeks ago at an Airbnb in France. The host retaliated because we had the audacity to tell her that the place was unclean when we checked in. She claimed 2000$ of fabricated damage and as you Airbnb sided with the host initially. It's only because I lost 3 hours of my time with support and took a thousands of screenshot from our Messages that I got them to drop that charge. I also issued a Chargeback with my credit card for the dirty place. But yeah, this is done for me as well. I had 20+ stays but I will never , absolutely never use them again. My time is worth something and this Airbnb destroyed our holiday and took way too much of my time to handle.
vasco 1y ago
> A deep dive on the framework that lets us identify the most valuable listings for our guests. An opening article lie! For our hosts would be much more appropriate. Why does a guest care about how many nights a place is going to sell in the next few months? This assumes value for guests is how much money the property they stay at makes, when it obviously isn't that.
hintklb 1y ago
My advice to everyone is to never book an Airbnb if you value your time and sanity. After a couple OK stays I had an absolutely horrible experience. The place was super dirty and the shower was clogged. The hosts tried to play nice and made us stay even though they didn't do the cleaning (Our fault I guess but when you are tired and already there you just want to move on and forget about the incident). After the stay they became dishonest and lied to Support, tried to make us pay more. Support sided with the Host and even deleted our bad review of the place. And the final nail in the coffin is that by deleting our bad review the host was able to get to Superhost status. That stay destroyed our holidays. We then had to spend multiple hours on the phone and by message with support to defend ourselves. Ultimately they manage to leave a misleading review for us that we couldn't delete and Airbnb deleted our review of them. It was already overpriced but once you account for the time lost when something goes wrong there is absolutely no point to book an Airbnb ever again. Stay with professional in hotels. Your future you will thank you.

96 points by benocodes 1y ago

epolanski 1y ago

Why do they publish blogposts on such a lame paywalled website though...

josefritzishere 1y ago
Seems pretty consistent with their revenue model.
deleted 1y ago
[deleted]
tomhow 1y ago
Is this post paywalled for you? Or is there just a signup/login banner that you can dismiss? If there's a paywall we'll pin a workaround at the top.
- SSLy 1y ago
  My User Agent goes around the paywall easily.
JohnScolaro 1y ago
I was wondering that too! Surely Airbnb - a company that runs a website - has the capability to put a text post on their own website. Then they'd own the content, and people looking for it could find it easier? It's not a revolutionary concept either, Facebook has one: https://engineering.fb.com/ https://engineering.fb.com/ Wait, Airbnb already has one? https://airbnb.io/ https://airbnb.io/ Genuinely confusing.
- echelon 1y ago
  > Why Distribution. The reason for this blog post is "recruit engineers". Not every engineer is going to visit blog.airbnb.com, but presumably a lot of them are already on Medium. They even close the article with, > We continue to solve interesting problems around LTV every day (and as more insights come up, we’ll keep sharing them on our blog). Can you see yourself making an impact here? If so, we encourage you to explore the open roles on our team. These blogs are always about recruiting.
  - philipwhiuk 1y ago
    Why would I pay for a paywall to read a job ad?
    - merricksb 1y ago
      There’s no paywall. It’s totally free to read. The popup is just a prompt to join/sign into Medium but you can close it.
deleted 1y ago
[deleted]

esafak 1y ago

I would have liked more discussion on handling uncertainty; how big is it, how well calibrated is it, how are they approaching variance reduction, how do they reduce the predictive distribution into decisions, etc. And no discussion of causal inference in the marketing section.

maxrmk 1y ago

I feel like this is missing a really important factor: how likely are guests to use airbnb again after staying at a listing? A listing could look great online and receive a lot of bookings (so high LTV), but ultimately drive users away from the platform. A certain ad platform I worked on cared a lot about this - offensive ads could get you to quit the site altogether. You might want to count every ad as positive for the company since you make money, but some might actually be negative expected value! As a side note, I think this is a really undermeasured problem. There are many sites I won't use because the ads are so overwhelming or are often offensive.

MajimasEyepatch 1y ago
In the case of Airbnb, wouldn't that show up in the listing's reviews, requests for refunds, etc. and ultimately drive down the listing's LTV? Nobody leaves reviews on an ad, and I imagine that very few users report inappropriate ads, so you can only measure that indirectly. But if somebody books an Airbnb and has a bad experience, they are much more likely to give you direct feedback about it.
- maxrmk 1y ago
  I think it could show up in those other places, but probably isn't fully captured? Imagine an airbnb that's great for most guests but absolutely terrible for 1 in every 5, so bad that they quit airbnb. Maybe it's next to a music venue, so every once in a while it's very loud. It's possible it could maintain a decent average star rating and LTV as described in the article but actually have negative (real) lifetime value for airbnb if the 1 in five that they lose would have spent a lot of money on the platform otherwise.
- Nextgrid 1y ago
  Bad reviews are often moderated away and refund requests are stonewalled (and few people know about chargebacks so that isn't factored in). It is easier for the platform to acquire guests than hosts, so the platform takes the side of hosts. Edit: at least that was the situation a couple of years ago. A host below now reports that the situation has changed and they take the side of the guests; however, either way it's open to abuse no matter which side they take. The issue is that in a marketplace where both sides can be dishonest, the only way to ensure quality is to do spot checks by trusted actors (aka company employees) where the penalties for failing such a check are dissuasive enough that it becomes more profitable to play by the rules. This is similar to how law enforcement is supposed to operate - the reason the penalty for theft (for example) is more than merely returning the stolen items is that since law enforcement can't observe everyone all at once, the penalty needs to be enough of a deterrent to make the bad behavior unprofitable overall, to discourage it even in cases where law enforcement isn't there to witness it and enforce said law.

kreyenborgi 1y ago

Man I'm so sick of trying to find something on Airbnb only to discover by the time I order that the price has doubled. Airbnb these last years went from feeling fresh and adventurous to scammy and dubious

ceejayoz 1y ago
Use the .com.au variant to find listings, as Australian law requires they list the full price, inclusive of tax and fees.
- nickjantz 1y ago
  Meh, they're just complaining because it's cool to whine about AirBNB online these days, US based AirBNB has had this feature for quite awhile now.
- thundergolfer 1y ago
  In New York the website recently updated to do this, presumably because they were forced to. They had a whole banner announcing it. I'm Australian and moved to New York recently-ish. It was one of those classic anti-consumer disappointments one experiences moving to the states. Glad they fixed it.
- kreyenborgi 1y ago
  That's one thing, annoying but possible to work with. What I'm talking about is Dynamic Pricing. Had to look up what really happens: The host sets a rate-range, and Airbnb first gives the low price and then as you click around in the area they notice you're more interested so they increase it towards the high end of the price range (possibly also time of day and such signals?). Then I guess there's a slow cooldown. Like how a good haggle is made to give you a friendly relationship with the seller, this seems specifically designed to make people hate Airbnb and swear to never use it again.
sabellito 1y ago
Use booking.com, better in every way and customer support that won't stonewall you.

huevosabio 1y ago

Mega-tangent: As a host, I feel compelled to rant about Airbnb whenever they come up in a discussion. The last 2 years they have _really_ moved to squeeze the hosts. The customer service has been demolished and they seem to have taken a stance of "the guest is always right". I've spent countless hours going through their customer service as a super host, so I know I have a decent amount of anecdata. My suspicion is that they found themselves with more supply than demand, so they are "improving the guest experience" at the expense of the hosts. Since they are a quasi-monopoly (depends on the market) it makes sense for them to prune supply in exchange for better guest experience, a full market approach makes less sense since they make money in proportion to the total amount of money transacted (which as a monopoly it can optimize for in the way a free market can't). But I think this will blowback sooner or later. The biggest value for an Airbnb guest is the review system that allows you to have some degree of certainty of what you are getting. The biggest value for a host is the massive global audience. But guests and hosts, pay a steep fee (17%!) for this. For well-reviewed, long-living stays (like mine :)), paying 17% is way too much to access this audience: the listing already has an online record that provides that quality assurance for the guest, and the host could spend that money on advertising. So that's what many of us are doing, moving to PMS + paid advertising / SEO to diversify on distribution channels. I think there's an opportunity for capturing that semi-pro host market and bundling them in a similar offering that 1) doesn't squeeze them, 2) offers a proper PMS software, and 3) charges a flat fee instead of a variable rate.

hbsbsbsndk 1y ago
[flagged]
- RandomBacon 1y ago
  An AirBNB host is not a landlord. Without landlords, you have no rental properties and everyone who can't afford to purchase their residence outright would have to find another option whatever that might be. (I have never used AirBNB.)
  - bavent 1y ago

doctorpangloss 1y ago

This isn't an LTV model, it's a regression model. Is it even good? Doesn't seem so. Maybe their folks need to punch "LTV" into Google Scholar. And also, is it even actionable? > For example, suppose we run a marketing campaign that provides hosts with tips on how to successfully improve their listings Right guys. “Marketing-induced incremental LTV” indeed.

mrweiner 1y ago
Yeah I thought the same thing. LTV defined as value over the next 365 days…so…not LTV at all?

cityzen 1y ago

Stopped reading at, “At Airbnb, we always strive to provide our community with the best experience.”

game_the0ry 1y ago

I wonder if you could use the same methodology to value potential investments in short term rentals.

iambateman 1y ago

Airbnb’s original promise was magical, thrilling, interesting - get to stay in unusual places that are full of charm and possibility. But that promise was broken for me when Commaleta played back the video of her front door camera and counted that we had 10 people walk in her door, not eight. She proceeded to accuse us of throwing a party, when we absolutely did not, and tried to charge us $1000 extra dollars. At that point, I decided that Airbnb’s hosts were too much of a wildcard in most travel situations. By the way, the story above is from 10 years ago and I will never forget her name for the rest of my life…she turned what should’ve been a relaxing, beautiful week into a miserable arbitration process. It’s hard for ABNB to succeed long term when one experience like that can ruin everything.

gameshot911 1y ago
Were 10 people in fact staying when the listing max was 8?
- iambateman 1y ago
  No, a couple friends who lived in town stopped by for an hour.
  - courseofaction 1y ago
    Last month a first time host confabulated $1200 of maintenance charges. Having left the property already, I was in no position to produce evidence that they were fake. Arbitration was hopeless, I canceled my card and won't be using Airbnb again.
    - hintklb 1y ago
      Funnily enough I went through something similar 3 weeks ago at an Airbnb in France. The host retaliated because we had the audacity to tell her that the place was unclean when we checked in. She claimed 2000$ of fabricated damage and as you Airbnb sided with the host initially. It's only because I lost 3 hours of my time with support and took a thousands of screenshot from our Messages that I got them to drop that charge. I also issued a Chargeback with my credit card for the dirty place. But yeah, this is done for me as well. I had 20+ stays but I will never , absolutely never use them again. My time is worth something and this Airbnb destroyed our holiday and took way too much of my time to handle.

vasco 1y ago

> A deep dive on the framework that lets us identify the most valuable listings for our guests. An opening article lie! For our hosts would be much more appropriate. Why does a guest care about how many nights a place is going to sell in the next few months? This assumes value for guests is how much money the property they stay at makes, when it obviously isn't that.

hintklb 1y ago

My advice to everyone is to never book an Airbnb if you value your time and sanity. After a couple OK stays I had an absolutely horrible experience. The place was super dirty and the shower was clogged. The hosts tried to play nice and made us stay even though they didn't do the cleaning (Our fault I guess but when you are tired and already there you just want to move on and forget about the incident). After the stay they became dishonest and lied to Support, tried to make us pay more. Support sided with the Host and even deleted our bad review of the place. And the final nail in the coffin is that by deleting our bad review the host was able to get to Superhost status. That stay destroyed our holidays. We then had to spend multiple hours on the phone and by message with support to defend ourselves. Ultimately they manage to leave a misleading review for us that we couldn't delete and Airbnb deleted our review of them. It was already overpriced but once you account for the time lost when something goes wrong there is absolutely no point to book an Airbnb ever again. Stay with professional in hotels. Your future you will thank you.