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The rickety elevator was a bit scary and made the tiny top-floor apartment in Rome's Monti neighborhood more like a sixth-floor stroll. In Edinburgh, the spacious accommodation with colorful walls and two decorative elements looked like the set of a Wes Anderson film. A skyrise in Vancouver offered breathtaking views of sunrise and sunset. And in Florence, oh, Florence, a comfortable, cozy base was perfect for exploring this amazing city.
Airbnb says it has generated 825 million visits in its 13 year history, but without me and my family it would only be about 824,999,910. Either way, it's an amazing feat. The internet has proven fertile ground for tapping into new markets and recharging some old-fashioned ones, whether it be for short-term stays, driving around town, or selling your collection of beanie babies.
Aaron Pressman / Fortune
This week we saw the spectacular public debuts of two of these companies. DoorDash increased its stock by $ 3.4 billion to $ 102, to climb to $ 186 on Wednesday. Airbnb received $ 3.5 billion for selling shares for $ 68. The stock closed at nearly $ 145 yesterday. This brings the company's market value to over $ 100 billion, more than Marriott, Hilton, InterContinental, Hyatt, Choice, Wyndham, GreenTree, and Red Lion combined (but only more than the first two or three if you include debt) .
On the one hand, you can understand why investors showered Airbnb with love this week. Before the pandemic, sales grew 30% to 40% annually and gross margin increased 75%. Marriott's revenue only grew 1% last year and has to pay the cost of the 1.4 million-room + 7,000 hotels it owns, whatever happens. Of course, Marriott also posted $ 1.3 billion in profit in 2019 while Airbnb lost $ 674 million.
Which one would you rather own for the next 10 years? Investors say Airbnb.
It's not necessarily a good thing. Despite my pleasant stays around the world, many studies have found that the company's service has had a noticeable impact on increasing rents by reducing the amount of housing for residents of major cities (although Airbnb denies the studies, suggesting that some were funded by the EU hotel industry). This means that while travelers can save some by avoiding hotels, the cost to residents is likely to be higher. And while Airbnb may be boosting local tourism, it has also brought visitors to areas that are sometimes ill-equipped to cope with the onslaught (much like Waze turned some neighborhood streets into crowded commuter racetracks). Can regulation and / or taxes fix this? I'm not sure.
The question that now occupies more people seems to be whether Airbnb's IPO after DoorDash, Snowflake and other high-tech high-flyers signals that the stock market has entered a speculative bubble that, like the internet bubble, ended badly 20 years ago could. I just want to point out that 19 IPOs doubled on their first day of trading this year, according to Leslie Picker, CNBC's IPO reporter, the number 78 in 2000 and 115 in 1999. And the story that the internet bubble was burst was A Piece by Barron calculating that new businesses were burning cash so quickly that many would soon be out of business. Airbnb was posting positive cash flow from operations prior to the pandemic and currently has more than $ 6 billion on its balance sheet. Electric vehicle inventories may be in the danger zone and some of the most famous new IPOs, but overall it looks less volatile.
After all, I wouldn't be sure if I didn't direct those of you who want a closer look at DoorDash and Airbnb to check out some of Danielle's coverage this week. I don't know if she's even sleeping, but in addition to handling the antitrust lawsuit on Facebook, she also interviewed Tony Xu, CEO of DoorDash, wrote the first DoorDash and Airbnb market reception, and was watching feature-length DoorDash very soon. Have a nice weekend.
In the latest installment of Fortune's Brainstorm podcast, we discuss how technology drives the holidays. Retailers with services like roadside pickup do far better than others, says Fortune's Phil Wahba. Brainstorming hosts Brian O’Keefe and Michal Lev-Ram also speak to Loren Padelford, Vice President and General Manager, Shopify, and Ben Jones, Ohi CEO. Its smart warehouse company enables smaller brands that want to compete with Amazon and Walmart to get same-day delivery. Listen to the episode here.