Airbnb is flying high.
It reportedly had $1 billion in revenue in the third quarter of 2018, according to AP:
Airbnb says it had its best quarter ever, even as cities across the U.S. have started clamping down on the short-term rental market. The private San Francisco-based company says its revenue for the third quarter easily topped $1 billion as guest reservations boomed internationally. Airbnb acts as an online booking agent for homeowners to make extra income by renting rooms, apartments and houses. Its growth has drawn the ire of the hotel industry and communities in the U.S. and abroad.
Airbnb just hired a senior Amazon executive to be Airbnb’s first Chief Financial Officer:
After a search that’s lasted nearly 10 months, Airbnb finally has a CFO.The home-sharing start-up is announcing Monday that Dave Stephenson will join Airbnb as chief financial officer. He spent 17 years at Amazon, most recently as VP and CFO of Amazon’s Worldwide Consumer Organization, responsible for all global website sales. His time at Amazon was interrupted by a two-year stint at Big Fish Games from 2011 to 2013, where he held a number of titles, including president and CFO.The hire brings Airbnb another step closer to a potential IPO in 2019, filling a position that had been vacant since February, when Laurence Tosi left the company amid rumors of tensions with Airbnb co-founder and CEO, Brian Chesky.
The IPO is on a fast track, as Bloomberg reports:
With a private valuation of about $31 billion, Airbnb Chief Executive Officer Brian Chesky has promised he will hold an IPO for the 10-year-old company before 2020 when some employee stock grants expire.
Brian Chesky’s story of founding and building Airbnb is one of the great success stories.
But he’s put it at risk needlessly. He either made a poor decision, or received bad advice, or both.
Airbnb’s decision to delist approximately 200 homes in Jewish settlements in Judea and Samaria (the “West Bank”) might seem like an odd fight to pick, but at one level it makes strategic sense for a company whose growth comes internationally.
The UN Human Rights Council, a disgraceful group of dictatorships and human rights abusers, is obsessed with Israel, The UNHRC, assisted by groups like the anti-Israel Human Rights Watch, is compiling a list of companies to blacklist for doing business in the West Bank. Human Rights Watch has bragged of its involvement in convincing Airbnb to boycott Jewish settlements, which announcement conveniently came the day before HRW was to release a report on Airbnb’s activities in the West Bank.
Airbnb may have thought it was a wise move numerically — delist 200 homes while protecting your international growth by avoiding the UNHRC blacklist. Airbnb also made itself a hero to vocal anti-Israel far-left groups, so it no longer will have its meetings disrupted.
But Airbnb didn’t just pull out of the West Bank, it singled out Jews and only Jews for boycott.
By delisting Jewish settlements, Airbnb has delisted Jews, as explained previously:
The area was ethnically cleansed of Jews by the Jordanians after Jordan captured the area in Israel’s War of Independence. The 1949 Armistice Line was where the fighting stopped, and left many historically Jewish areas, including the Jewish Quarter of the Old City of Jerusalem, in Jordanian hands. Israel recaptured the area in 1967.Israeli Jews in those areas live in settlements because the regular housing market is not available. Palestinians are forbidden by the Palestinian Authority and terrorist groups, often under threat of death, from selling or renting to Jews. And given the long history of violence, including stabbings and shootings, directed towards Jews in those areas, it would be too dangerous.The West Bank is disputed territory. For a history of why the settlements are not illegal and the area is not illegally occupied, see our prior posts….While it couches its language referring to “settlements,’ that is just another way of saying Jews because Jews only can live in “settlements” in the West Bank.
Included in the reaction have been legal actions against Airbnb in Israel and in the U.S.
The Free Beacon covers the domestic U.S. political reaction, Trump Admin, Congress Slam Airbnb Boycott of Israel as ‘Anti-Semitic’:
The deepening controversy over Airbnb’s decision to join the BDS movement is beginning to be discussed within the Trump administration and its allies on Capitol Hill, who could potentially penalize company. Already, there is discussion that Airbnb’s move could trigger state and federal laws barring discrimination based on religion and ethnicity….A State Department official, speaking to the Free Beacon about the matter, categorically rejected Airbnb’s boycott.”The administration’s strong opposition to boycotts, divestitures, and sanctions is well-known,” the official said.On Capitol Hill, Trump administration allies are turning their attention to Airbnb. The move to delist Jewish homes could provide the momentum necessary for Congress to finally pass anti-boycott legislation that has long been stalled.”Airbnb’s actions, sadly, have contributed to the rising tide of anti-Semitism that we’ve seen happening all over the world,” Sen. Ted Cruz (R., Texas), a vocal pro-Israel champion, told the Free Beacon. “They caved to pressure from the anti-Israel boycott movement, which promotes falsehoods in its campaigns against the world’s only Jewish state.” ….”Congressional Democrats may be moving away from Israel but there’s still a bipartisan consensus in Congress that we oppose entities that wage economic warfare against Jews,” said one senior congressional staffer who works with the Trump administration on Israel issues. “That’s also true across dozens of states, many of which have passed anti-boycott laws. Airbnb is siding with anti-Semites who want to destroy Israel, in an effort to undermine America’s Israeli allies. How do they think this ends?”Airbnb did not respond to a request for comment.
Airbnb is acting like a company that doesn’t care about the reaction. They have been mostly silent. That’s a corporate crisis management strategy that says they think they can wait it out.
Even if thousands of consumers boycotted Airbnb, it wouldn’t make much of a difference to a company with a billion dollars in revenue each quarter.
But a consumer boycott is not the risk. Airbnb took a political position, seeking to impost its foreign policy view on the volatile area. As even an sympathetic former Human Rights Watch researcher characterized it in Foreign Policy magazine, If the U.S. Government Won’t Act, Airbnb Will:
A decision by Airbnb last week to stop listing more than 100 rental properties in unlawful Israeli settlements in the occupied West Bank has sparked anger and accusations. But the short-term lodging service is well within its rights; it is merely showing leadership in meeting its international human rights responsibilities—an obligation that the U.S. government has abdicated.
Think about that. Airbnb has chosen to become a political actor.
In a country where the political structure overwhelmingly supports Israel, and where Israel’s popularity is at historical highs, the damage to Airbnb’s brand will be enormous, even if the short term damage to its revenue is not.
Airbnb hopes to have a public offering in 2019. That’s going to be difficult as the number of lawsuits and investigations rise. It will present a pressure point for pro-Israel advocates. Who will be the underwriters, and how can they justify taking public a company that openly discriminates against Jews?
Perhaps Airbnb saw staying off the UNHRC’s blacklist as a better IPO strategy, but that ignores domestic U.S. politics which is where Airbnb will make its Initial Public Offering.
Politicians will jump on board the anti-Airbnb train, because they know that the “Israeli Lobby” is the American people. And if Airbnb were to be excluded from the Israeli market in retaliation for discriminating against Jews, Airbnb would take a serious economic hit, far more so than the symbolic UNHRC blacklist.
Airbnb acts like it is invulnerable and can wait this out. That may turn out to be a serious miscalculation.
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