Airbnb, a company with a worldwide portfolio of social contacts, yet few physical assets, has a market value at $10 billion according to Wall Street Journal. WSJ – March 21, 2014 Airbnb Is in Advanced Talks to Raise Funds at a $10 Billion Valuation.
In contrast, Hyatt Hotels, a company with over 500 hotels worldwide, derives 60% of its business from the 25% of upper-upscale and luxury hotels in the global portfolio the company owns or leases. Long-term management contracts and physical assets ensure a steady revenue. Hyatt Hotels has a market cap value of $8.4 billion.
The Wall Street Journal article has an infographic showing the market cap value of major hotel chains.
A Reuben Brewer article on the financial website Motley Fool offers a good comparison of the business models for Airbnb and Hyatt Hotels.
While Airbnb’s systems could, theoretically, be deployed anywhere around the world, Hyatt is already doing just that. And Hyatt caters to wealthy travelers and business people that are willing to spend money—not cutting corners to try to save some dough.
Reuben Brewer article on Motley Fool (April 24, 2014)
Airbnb may be the next Expedia or Amazon. While Airbnb is still a private company, Wall Street thinks the consumer to consumer business will seek an IPO listing which has led to the $10 billion value being tossed around the financial news sites.
Is Airbnb too big to fail?
Personally, I have not given Airbnb a try yet. Two summers living in Irish BnBs, while a wonderful experience for most stays, was my motivation for getting into hotel loyalty programs in the first place.
At least I know my stays at two Hyatt Regency hotels next week will provide me privacy and a private bathroom. Also, complimentary breakfast in the morning as a Diamond elite member and a few thousand bonus points to help pay for another future hotel stay award.
Will Airbnb start a loyalty program?