Why Airbnb is a Recession Proof Business
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As many people know, Airbnb was founded in late 2008 in the midst of one of the worst financial crises in US history. Over the following years, while most companies suffered greatly Airbnb grew massively and became one of the most successful companies on Earth. This video discusses why that it, why you should care, and how to take advantage of the current opportunity.
So the big question is: why did Airbnb GROW in 2008? What makes Airbnb so recession-proof as a business? How is it that they were able to grow while other companies all over the country crumbled to the ground? That’s exactly what we’re going to be talking about in today’s video.
We’re going to talk about:
1: Why you should even care about how Airbnb reacts to an economic downturn;
2: Why Airbnb acts the way it does;
3: What you can gain from it/how to take advantage
For starters, if you’re looking to become wealthy in your lifetime, you may be interested to know that the stock market creates more millionaires during recessions than any other time. Given all signs are pointing towards the US market diving into a recession this year, it’s a pretty amazing opportunity for those of us who are prepared to walk away with some serious cash.
If you want to make a killing during a recession, the one thing you need is cash. If you don’t have cash on hand when everything suddenly goes on sale, you can’t buy anything. Major companies are literally going on sale for huge discounts, but you literally need to just sit there and look through the window at the Black Friday deals knowing that you can’t have them.
Because having cash is so important and so valuable, understandably you may want to get your hands on some, and in that case having a solid side-business is a great way to do so.
Also, no matter when you start a business, it’s always great to start one that is in fact recession-proof because there’s nothing worse than being at the mercy of other people, governments, etc. which is why most people want to start a business in the first place.
Historically, during an economic downturn, Airbnb has grown because more hosts join and more travelers switch away from hotels. This makes a lot of sense because more people want to make a side-income when times get tougher and more people want to save money on travel.
Thus, Airbnb wins from both directions and is able to grow and profit massively.
Obviously certain things like outbreaks can be a bit different, but that overall:
Tourism is a necessity, so it’s never going to hit zero;
Domestic tourism will increase as people can’t travel abroad;
The bounce back is likely to be huge in a few months
Airbnb is also a company that has a global “supply” meaning that although one area may be heavily impacted, unless the entire world descends into chaos, Airbnb is still going to come out on top because the entirety of their supply isn’t impacted.
For anyone who wants to jump on the opportunity, there are basically three options:
Invest in Airbnb’s IPO (slated for later this year)
Start hosting your own place
Start hosting for other people
Hosting for other people is likely to be an especially great opportunity right now because:
Times are going to get tough and more hosts will be entering the market
Need is going to increase because people are having a tough time with the outbreak
More people are likely going to be moving to Airbnb for travel as the economy suffers
WARNING: IF ALL YOU’RE LOOKING TO DO IS GET IN, TAKE ADVANTAGE, AND MAKE SOME SHORT-TERM QUICK CASH, DON’T BOTHER
The next few months are likely going to be slower returns with the height of the outbreak. The opportunity to start growing however is huge, and if you’re willing to wait and be patient this is a massive opportunity.
This is basically a real-world “marshmallow experiment” and the people who are willing to wait will end up with a lot of marshmallows in the end 🙂
Hey everyone, my name is James. I'm an Airbnb expert. And today we're going to be talking about how Airbnb acts in a recession and why it's so recession proof overall as a business. Now, I know a lot of you might think I'm crazy saying that with everything that's going on the world right now with the big outbreak, but the reality is there's two different things happening right now. There's the outbreak and then there's the potential for an upcoming recession. Now the outbreak has its impacts on Airbnb hosting, that's very obvious. But what we've seen from the past is that Airbnb was actually born in 2008. In a lot of you probably know that the Airbnb was born and grew massively from 2008 over the last 11 years, 12 years since then, to become one of the most successful companies in the world. Now. It's a, you know, in business, it's in the real estate section somewhat. And it was born in one of the worst financial times in the US history, and especially for us real estate. So the question is, how is that
Why is that the case? How is it that Airbnb was able to be so successful when companies all over the country and all over the world were crumbling? So in this video we're going to address that we're going to talk about first of all, why you should even care how Airbnb x stringers session, you know, What's it to you? Why should you even care about it at all? Second, we're going to talk about how Airbnb does tend to act during a recession and why that is like what the driving forces are behind how Airbnb reacts to an economic recession. The third thing we're going to talk about is how you can take advantage how you can get in on that take advantage in one way or another. We're going to talk about three different ways that you can take advantage of the way that Airbnb reacts in their session and get in on the opportunity. So to start out with, why should you care? Why do you care about how Airbnb action or session? Well, for starters, if you've ever thought about becoming a millionaire, you ever wanted to become wealthy, you want to have some financial freedom? One thing that's interesting to look at is the number of millionaires
And the number of wealthy individuals that are formed and created from the stock market during a recession, more wealth is created from the stock market during a recession during downtime than any other time. Because the reality is that companies all over the world are going on sale, they're going on sale for 30% off, 50% off, 60% off, 70% off. And a lot of that is happening even right now, like we're seeing with, you know, the Dow Jones dropping and hospitality companies all over the world are just losing their footing, you know, so these companies are going on sale, but the underlying company beneath them is still business as usual. It's still a good company with a solid foundation and good profitability. The company's just temporarily on sale. And so it's really important during these time to have cash on hand. And so having cash on hand allows you to buy in and actually pick up on these Black Friday deals on huge corporations. And so if you have a vehicle that allows you to spin off cash journey
In these tough times, then that's obviously really advantageous. Now, I'm not saying by any means that Airbnb businesses all around the world are just spinning off a whole bunch of cash right now we all know that's not true. But what's important to remember is that there's two things at play here, right now, there's the outbreak that's causing a huge downturn in the economy or in tourism rather, and then that's causing there to be a decrease in Airbnb bookings. And then there's also the potential recession that's coming around the corner here. Now, we've been in a great bull market for you know, about 10 years now since 2008 2009. And so, since that's been going on for so long, it's quite predictable that somewhere maybe now maybe in a little while, we don't know what's going to happen and I'm not pretending to know what's gonna happen in the future. But some we're going to enter into another economic downturn, we're going to have a bear market. And so having a vehicle that is able to spit off cash during that time is valuable for two reasons. One, it allows you to have cash to invest into these companies. They're going on wildfire sales.
When an economic recession happens, and number two, having a business that's recession proof that is able to weather the storm and it's able to provide for you and your family and you know, provide you with an income throughout those tough economic times. I don't have to explain why that's exceptionally valuable to anyone. So now we've talked about why exactly it is that most of you would care about how Airbnb reacts during a recession. Let's talk about how it actually acts during our session and why it acts that way. And so what we've seen from the past and looking at how Airbnb was born, and you know, tough economic times in North America, what we've seen is that a couple of things happen during a recession. Number one, people have less money disposable to own travel. Now, travel is a necessity, especially for business for commerce, it actually is very necessary for people to travel and so tourism is never going to reach an absolute zero. Even now we still have people traveling for business for you know, for government, things like that. Even when
Travel is as locked down as it's ever been in history in the entire world. And we still have people traveling domestically, we still have a some level of travel that's able to be quite sustainable. Still, some businesses are still able to survive some Airbnb businesses. And we're staying booked somewhat as hosts just from domestic travel. Now, I know that's not the situation for all of you. And some of you might doubt that, but the reality is that tourism doesn't hit zero. And that in a recession, it's even less impacted than it is right now, right now is as close to zero tourism as we've ever gotten. And we're still not hitting absolute zero. And so with that being said, the tourism is still going to be happening during our session, but people are going to have less money disposable to travel so they're going to want to travel in more economical ways. And the other thing that's true is that in a recession, people need additional income and so they turned to Airbnb as hosts and hosting of the side of hosting the hosting side of Airbnb business tends to actually grow during a recession.
because more people need to use that spare space that they've got to, you know, earn some additional income or need to transition their space from a long term rental to a short term rental to again just cushion the amount of income that they're earning. So, for those reasons, Airbnb tends to grow during a recession. And my prediction is that the next recession where we go into is going to act largely the same. And then we are going to see growth in Airbnb. And that is also a really great opportunity for anyone who is in Airbnb management, because a lot of these people that are new hosts coming into the market are not going to have the expertise to be able to really maximize their property, and they're going to need help with it. And so this kind of brings into the next point of how is it that you're able to actually leverage that and get in on the on the opportunity that Airbnb presents during an economic downturn? Well, one way that you can do it is by investing in Airbnb now, right now, you can't do that because they're not a publicly traded company. But they are set to IPO later this year. I'm gonna release a video actually
Later this week or next week, there's going to talk about the Airbnb IPO. I do suspect it is going to be delayed until later this year or even potentially next year because of everything that's going on in the world right now. But once they IPO, you will be able to invest in them as a company, I know already putting some money into it. And this is a business that I understand. But obviously, that's some one way for the average person to get into Airbnb and get involved. Another way is to host your own space. Now, starting sooner rather than later is a great idea because it'll allow you to get a good foundation in place because like I said, a whole bunch of new hosts are likely to be coming into the hosting ecosystem, once things get tougher, and people need more additional income. So having a foundation having a listing with some reviews, having some experience, that's going to be really helpful so you can stand out above that crowd. The other way that you can get involved is to start helping other people and start managing properties for other people on Airbnb. Now, again, getting started with that sooner rather than later is going to be advantageous because they'll allow you to build that foundation.
So that when a whole bunch of new hosts come on and they need your help, you've already got a strong foundation in place. Now I'm linking to a couple of resources down the description below, one of which is going to help you to get started as a host if you want to start hosting your own space, and one of them is a train that's going to be helping you to actually get started hosting properties and managing properties for other people if that's the direction that you want to go. Both of them are completely free training so I recommend checking those out as well they dive way more in depth about it. And by the way, one thing I want to mention is a disclaimer is that if all you're interested in doing is just getting into hosting making some quick cash and getting out don't even bother really what this is it's starting a business it's not quick you know get rich quick just like anything else in the world. There is no get rich quick and if there is then go go ahead take on that opportunity. Go for it. I don't believe it's going to be successful for you because I'm a firm believer that having success in anything takes time it takes effort and Airbnb hosting if you come into it with a mentality of just wanting to make money
guarantee right now you're gonna fail at it because like anything you need to treat your customers with respect, and you treat them fairly. And Airbnb hosting is a really great embodiment of that the community is phenomenal in terms of just being a super welcoming, and value providing community. And so if you don't want involvement in that, then don't even bother. So I recommend just going and checking out the resource down below if you do want to get involved and you're looking for an opportunity that you can put some energy into and focus on long term. Right now Airbnb hosting is not going to be very lucrative for the next month or two months is my guess. Because we're going through a tough time. But if you're ready to weather, that storm, you want to really provide value to people, you want to help people and you want to get started in this business and focus on it long term, then it can be really, really great opportunity to get into and with the economic times that look like they're coming right around the corner. It can be a really good business to be involved with because of the way that Airbnb acts during a recession, as opposed to how most businesses act during our session which obviously is crumbling to the ground, and so on.
I hope you've enjoyed this video. If you did, give it a thumbs up, click the subscribe button and enable some notifications. If you want to get notified when I post new videos, I'm going to post new videos twice every single week talking about Airbnb related topics. We're going to talk a little bit about what's going on in the world. I'm going to keep it a little bit less doom and gloom than some of the other content out there in the ecosystem right now, just because I do really want to focus on providing value to everyone now is a tough time. The reality is that if you weren't prepared, there's not a ton you can do about it. But if you are going through tough times right now and you want some advice on how to deal with that, I'm going to leave links in the description of this video to some other videos that I put together recently that talked about you know how you can deal with the Airbnb apocalypse is happening right now, and other things you can do to take advantage of Airbnb and really operate effectively as an Airbnb host. So I hope you really enjoyed this again, I'd really appreciate if you give this video a thumbs up and give it a like it really really helps me with the YouTube algorithm if you do that. Subscribe if you want more content and until the next video