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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

by 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.
lurk2 1y ago
I had this experience years ago. The first place I ever rented in had Wi-Fi that didn’t work and after about a week the water stopped working. I cancelled my booking through support and the owner called me 3 or 4 times on WhatsApp and then left me a bad review. The second place had a shower that didn’t drain and the washing machine flooded the apartment one evening. The third place had black mold growing out of the kitchen ceiling. I tried to get them to waive the cleaning fee over it, but the owner claimed he had told me about it already and refused to do anything. When I left, he told me he had written me a good review and expected one in return. I pointed out that he had done nothing to remedy the mold issue and then posted my own review, and found that in his review he had accused me of bringing prostitutes and drugs into the apartment (which I did not). It was nominally cheaper to travel this way, but for my next trip I’ll be staying in hotels.
- bombcar 1y ago
  This is how things like Airbnb (and ebay) die - the hosts and sellers know all the tricks and so the buyers just leave; it’s not worth the hassle.
  - nothercastle 1y ago
    The eBay experience has improved dramatically. Its far better than Amazon 3rd party
    - bombcar 1y ago
      I've actually noticed that; perhaps it's easier to scam/sell crap on Amazon now than eBay - and so eBay becomes actually usable again.
      - nothercastle 1y ago
        I think the scams are all automated on Amazon so that makes it even easier
munro 1y ago
No model is perfect, but some are useful. Their "baseline LTV" looks at the sum of listings on their platform (plus other features), then tries to forecast the next 365 days — so this should indirectly capture people coming and going. I think their cannibalization model is quite clever as well. Going deeper with modeling users might yield some tighter estimates, but I imagine this gets estimates far closer than some simple accounting formula, and likely helpful for budgeting a year out — but it would have been nice to have seen some performance metrics.
- mmasu 1y ago
  I also think the cannibalization model is clever. The baseline model is however a bit underwhelming, as bookings can be misleading by themselves - you have cancellations, impressions, and so forth. For example if you only look at bookings in next 365 days, new listings will be penalized. But as you said no model is perfect :-)
avidiax 1y ago
> A listing could look great online and receive a lot of bookings (so high LTV), but ultimately drive users away from the platform. I am precisely this kind of churned customer. I have personally booked maybe 3 AirBNB stays, and stayed with family in them on other occasions. The units I pick are always well-reviewed. But in the cities I've stayed in (LA, SF, Rome), the price is really no cheaper than a hotel, and the quality is extremely variable. You have to really carefully read those 5-star guest reviews to read between the lines. And you feel pressured not to leave a negative review, as that would negatively impact your ability to book in the future, since the hosts (I have heard) can see your average review score. My impression has been that AirBNB's customers are actually the hosts. You, the guest, are an expendable commodity. You will use AirBNB until you have a severe enough problem, and experience them siding with the host over you. Then you'll be churned permanently, and by force if you do a chargeback. If I were going to disrupt AirBNB, I'd offer hosts a better percentage with the requirement that the experience is standardized and high-quality. There would be an in-unit noise & vibration sensor, reporting directly in the app. 24 hour check-in and check-out. A minimum set of amenities, minimum WiFi speed. The bedding would be standard. Cleaning fee standard. Every unit subject to a surprise multi-point inspection at least once per year. Essentially, make it no worse than an average hotel, and maybe some units as good or better than high end hotels.
- secabeen 1y ago
  > If I were going to disrupt AirBNB, I'd offer hosts a better percentage with the requirement that the experience is standardized and high-quality. This is an interesting idea, but it puts the quality level way above what I want to pay for. Hotels are anti-septic and cold. I like staying in an apartment that feels like someone actually lives there. I don't mind a few dust-bunnies under the couch, nor a little dirt behind the toilet. It's even better when the kitchen is fully stocked, including a selection of non-perishable food (think cooking oil, salt, pepper, maybe a bag of ground coffee and a box of pasta.) Sure, the sheets and towels should be freshly laundered, but beyond that, I don't want much. AirBNB allowed me to pay less to get a more human-feeling space. Hotels are like McDonalds, they are designed for the regular customer who wants to get that Hilton-feeling, regardless of if they are in Wichita or Cairo. I want to feel like I'm in Cairo, and if that means that I'm in a mud brick house with a single bathroom, no A/C, and no daily housekeeping that's great! AirBNB opened those worlds to us as travelers, in a way that hotel chains never did.
listenallyall 1y ago
Good point and it affects far more than just Airbnb. I'm sure some companies internal ROI for app notifications is universally positive... but when you send me 10 app notifications a week for a product or service I only purchase occasionally, I'm uninstalling the app. Obviously I'm in the minority because the app still has millions of users but hopefully others have turned notifications off.
- maxrmk 1y ago
  Yeah I think about this model weirdly often.
  - Rastonbury 1y ago
    I think it's pretty hard to attribute bad stays to stoppage of the service though unless they use reviews in a model which is probably the best data they have to predict this. I haven't booked an Airbnb in years, whether it be due to having hotel points to redeem or someone else in my party booking on their account or just the price differences in that specific city I am going to. I'm not averse to the service but my account is basically dormant
- eastbound 1y ago
  I basically uninstall all apps between two uses of them: Uber, AirBnb. Even the bank, I have a problem with the mandatory confirmation-on-phone for the yearly stock options plan I use. Wouldn’t want a thieve to see that app.
  - ghaff 1y ago
    Can't you just turn off notifications. I have very few enabled.
BrenBarn 1y ago
An interesting distinction is between staying at a listing vs booking it. I booked an AirBnB in Texas for the eclipse last year. The booking was made months ahead of time. Minutes before I left for the airport, the host canceled with no communication and didn't respond to messages. I got a refund, but I wasn't able to leave a review because the stay hadn't begun. I had only used AirBnB once or twice before and was leery of it, but after this experience I'm unlikely to use it again. The inability to review the host in such a situation is pretty much a dealbreaker. (Note that I want to review the host --- not the property, but the person who decided to cancel the booking at the last minute.)
- Winsaucerer 1y ago
  We had an experience not as bad as that, but cancelling on us a week or two before we were due to fly (and had booked everything else). They wanted US to cancel, but I saw no advantage to us in doing so. I assume it was to maintain some reputation on their side. We declined.
j4coh 1y ago
AirBnBs are as expensive as hotels now, except you have to clean it yourself and deal with an often insane host and their random rules. I am back to hotels and resorts all the time now, you at least know what you’re going to get.
scarface_74 1y ago
> There are many sites I won't use because the ads are so overwhelming or are often offensive. I hate to sound like the “Do people still watch TV? I haven’t owned a TV in 20 years.” Guy. But why are you seeing ads on the web? Don’t you use an ad blocker?
- maxrmk 1y ago
  I used to use one but when I started working on ads it felt hypocritical. I want to support the sites that I use, especially those that don't paywall content. I don't work on ads anymore but have stuck with it.
  - scarface_74 1y ago
    Most advertising these days are based on click through. If you aren’t clicking on the ads, you aren’t making them money.

by maxrmk 1y ago

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.

lurk2 1y ago

I had this experience years ago. The first place I ever rented in had Wi-Fi that didn’t work and after about a week the water stopped working. I cancelled my booking through support and the owner called me 3 or 4 times on WhatsApp and then left me a bad review. The second place had a shower that didn’t drain and the washing machine flooded the apartment one evening. The third place had black mold growing out of the kitchen ceiling. I tried to get them to waive the cleaning fee over it, but the owner claimed he had told me about it already and refused to do anything. When I left, he told me he had written me a good review and expected one in return. I pointed out that he had done nothing to remedy the mold issue and then posted my own review, and found that in his review he had accused me of bringing prostitutes and drugs into the apartment (which I did not). It was nominally cheaper to travel this way, but for my next trip I’ll be staying in hotels.

bombcar 1y ago
This is how things like Airbnb (and ebay) die - the hosts and sellers know all the tricks and so the buyers just leave; it’s not worth the hassle.
- nothercastle 1y ago
  The eBay experience has improved dramatically. Its far better than Amazon 3rd party
  - bombcar 1y ago
    I've actually noticed that; perhaps it's easier to scam/sell crap on Amazon now than eBay - and so eBay becomes actually usable again.
    - nothercastle 1y ago
      I think the scams are all automated on Amazon so that makes it even easier

munro 1y ago

No model is perfect, but some are useful. Their "baseline LTV" looks at the sum of listings on their platform (plus other features), then tries to forecast the next 365 days — so this should indirectly capture people coming and going. I think their cannibalization model is quite clever as well. Going deeper with modeling users might yield some tighter estimates, but I imagine this gets estimates far closer than some simple accounting formula, and likely helpful for budgeting a year out — but it would have been nice to have seen some performance metrics.

mmasu 1y ago
I also think the cannibalization model is clever. The baseline model is however a bit underwhelming, as bookings can be misleading by themselves - you have cancellations, impressions, and so forth. For example if you only look at bookings in next 365 days, new listings will be penalized. But as you said no model is perfect :-)

avidiax 1y ago

> A listing could look great online and receive a lot of bookings (so high LTV), but ultimately drive users away from the platform. I am precisely this kind of churned customer. I have personally booked maybe 3 AirBNB stays, and stayed with family in them on other occasions. The units I pick are always well-reviewed. But in the cities I've stayed in (LA, SF, Rome), the price is really no cheaper than a hotel, and the quality is extremely variable. You have to really carefully read those 5-star guest reviews to read between the lines. And you feel pressured not to leave a negative review, as that would negatively impact your ability to book in the future, since the hosts (I have heard) can see your average review score. My impression has been that AirBNB's customers are actually the hosts. You, the guest, are an expendable commodity. You will use AirBNB until you have a severe enough problem, and experience them siding with the host over you. Then you'll be churned permanently, and by force if you do a chargeback. If I were going to disrupt AirBNB, I'd offer hosts a better percentage with the requirement that the experience is standardized and high-quality. There would be an in-unit noise & vibration sensor, reporting directly in the app. 24 hour check-in and check-out. A minimum set of amenities, minimum WiFi speed. The bedding would be standard. Cleaning fee standard. Every unit subject to a surprise multi-point inspection at least once per year. Essentially, make it no worse than an average hotel, and maybe some units as good or better than high end hotels.

secabeen 1y ago
> If I were going to disrupt AirBNB, I'd offer hosts a better percentage with the requirement that the experience is standardized and high-quality. This is an interesting idea, but it puts the quality level way above what I want to pay for. Hotels are anti-septic and cold. I like staying in an apartment that feels like someone actually lives there. I don't mind a few dust-bunnies under the couch, nor a little dirt behind the toilet. It's even better when the kitchen is fully stocked, including a selection of non-perishable food (think cooking oil, salt, pepper, maybe a bag of ground coffee and a box of pasta.) Sure, the sheets and towels should be freshly laundered, but beyond that, I don't want much. AirBNB allowed me to pay less to get a more human-feeling space. Hotels are like McDonalds, they are designed for the regular customer who wants to get that Hilton-feeling, regardless of if they are in Wichita or Cairo. I want to feel like I'm in Cairo, and if that means that I'm in a mud brick house with a single bathroom, no A/C, and no daily housekeeping that's great! AirBNB opened those worlds to us as travelers, in a way that hotel chains never did.

listenallyall 1y ago

Good point and it affects far more than just Airbnb. I'm sure some companies internal ROI for app notifications is universally positive... but when you send me 10 app notifications a week for a product or service I only purchase occasionally, I'm uninstalling the app. Obviously I'm in the minority because the app still has millions of users but hopefully others have turned notifications off.

maxrmk 1y ago
Yeah I think about this model weirdly often.
- Rastonbury 1y ago
  I think it's pretty hard to attribute bad stays to stoppage of the service though unless they use reviews in a model which is probably the best data they have to predict this. I haven't booked an Airbnb in years, whether it be due to having hotel points to redeem or someone else in my party booking on their account or just the price differences in that specific city I am going to. I'm not averse to the service but my account is basically dormant
eastbound 1y ago
I basically uninstall all apps between two uses of them: Uber, AirBnb. Even the bank, I have a problem with the mandatory confirmation-on-phone for the yearly stock options plan I use. Wouldn’t want a thieve to see that app.
- ghaff 1y ago
  Can't you just turn off notifications. I have very few enabled.

BrenBarn 1y ago

An interesting distinction is between staying at a listing vs booking it. I booked an AirBnB in Texas for the eclipse last year. The booking was made months ahead of time. Minutes before I left for the airport, the host canceled with no communication and didn't respond to messages. I got a refund, but I wasn't able to leave a review because the stay hadn't begun. I had only used AirBnB once or twice before and was leery of it, but after this experience I'm unlikely to use it again. The inability to review the host in such a situation is pretty much a dealbreaker. (Note that I want to review the host --- not the property, but the person who decided to cancel the booking at the last minute.)

Winsaucerer 1y ago
We had an experience not as bad as that, but cancelling on us a week or two before we were due to fly (and had booked everything else). They wanted US to cancel, but I saw no advantage to us in doing so. I assume it was to maintain some reputation on their side. We declined.

j4coh 1y ago

AirBnBs are as expensive as hotels now, except you have to clean it yourself and deal with an often insane host and their random rules. I am back to hotels and resorts all the time now, you at least know what you’re going to get.

scarface_74 1y ago

> There are many sites I won't use because the ads are so overwhelming or are often offensive. I hate to sound like the “Do people still watch TV? I haven’t owned a TV in 20 years.” Guy. But why are you seeing ads on the web? Don’t you use an ad blocker?

maxrmk 1y ago
I used to use one but when I started working on ads it felt hypocritical. I want to support the sites that I use, especially those that don't paywall content. I don't work on ads anymore but have stuck with it.
- scarface_74 1y ago
  Most advertising these days are based on click through. If you aren’t clicking on the ads, you aren’t making them money.