Airbnb's big move
MARKETS
- Markets: A bad day for Big Tech and gloomy European economic forecasts conspired to drop the S&P to its fourth-straight loss. Let’s. Get. This. Week. Over. With.
- U.S. employment: Depending on when you read this, the February jobs report will be out. Economists are expecting U.S. employers added another 180,000 jobs.
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HOSPITALITY
Airbnb Books HotelTonight
Airbnb is buying HotelTonight, the last-minute booking service you use when your friend says you can’t crash because her “roommate is sick.” You don’t even have a roommate, Janet.
The financial terms weren’t disclosed, but HotelTonight was valued at $463 million when it last raised money in 2017. That would make it Airbnb’s largest acqusition ever.
The strategy behind the deal
Airbnb, the disruptor du jour in the hospitality industry, is on a quest to become an “end-to-end travel platform,” jargon for “we want to control every aspect of your travel experience.” So how does HotelTonight fit in?
- It adds more hotel inventory to complement Airbnb’s bread and butter: short-term home
- That kind of inventory is in demand: The company said that in 2018 it more than doubled the number of rooms on properties hosts can categorize as “boutique hotels, bed and breakfasts, and other hospitality venues like hostels and resorts.”
What’s next for Airbnb
Like any private company valued at $31 billion, you’re going to start getting questions about an IPO. That’ll likely happen at some point in the next year or two, but Airbnb is in no rush to go public like Uber and Lyft. Something else it doesn’t have in common with those two? It’s been profitable for the last two years.
Right now, it appears Airbnb’s aim is to build an “expansion narrative,” as CNBC puts it. That means showing investors it can become that end-to-end travel platform with initiatives including…
- Airbnb Experiences: “Activities designed and led by inspiring locals”
- Airbnb Plus: A hotel-like service
- Transportation: Still unclear, but Airbnb hired the founding CEO of Virgin America to be its first-ever global head of transportation
A final note about competition...it’s intense. Booking Holdings and Expedia Group (with a combined market cap of close to $100 billion) don’t need any “expansion narratives” to quickly counter Airbnb’s moves.
GROCERY
Kroger Says to Trust the Process
It’s not exactly tanking for Zion, but the grocer is taking some licks as it rebuilds for an e-commerce future. Kroger reported quarterly earnings that showed shrinking margins, which caused investors to shrink its stock price nearly 10%.
Denting profit is Kroger’s multibillion-dollar spending spree to build out its digital infrastructure. That includes remodeling stores, making investments in robot-dominated warehouses, and testing self-driving delivery.
- Some of that is already paying off: Digital sales climbed 58% in fiscal 2018.
- But even that wasn’t enough to impress investors who have one eye on Target, the other eye on Walmart, and pre-installed cameras monitoring Amazon, Aldi, and other players in this competitive space.
Related: Wegmans, the supermarket chain some proud upstate New Yorkers feature on sleeve tattoos, earned the #1 spot on the Axios Harris Poll 100, which ranks the reputations of the most visible companies.
+ Want more grocery discussion? A Brew reader created a subreddit, r/delicounterrumors, for that exact purpose.
INTERNATIONAL
The Eurozone Has a Fever...
...and the only prescription is more stimulus. The European Central Bank announced plans to give the region’s lethargic economy the 5-hour Energy boost it may need.
That shot comes with:
- Cheap, long-term loans for commercial banks to encourage lending to businesses and consumers
- No more interest rate hikes through the end of the year (rates are currently at record lows)
What it means: U-turn. The central bank only recently stopped its gigantic bond-buying program, a strategy it used to stabilize the economy post-crisis. But ECB President Mario Draghi sees more trouble on the horizon.
- Italy is in a recession, Germany came thiiiiis close to one, and trade tensions and Brexit continue to cause uncertainty.
- “The risks surrounding the euro area growth outlook are still tilted to the downside,” Draghi said.
Zoom out, per the WSJ: “With a major policy reversal Thursday, the ECB became the first rich-country central bank to unveil new stimulus in response to the global economic slowdown."
MEDIA
Disney's Quotable Day
Nothing stirs the heart like a quote from a Disney movie (“Have you ever tried shawarma?”...so emotional).
Could these soundbites from a busy day at Disney (-0.77%) make the top 10?
1. "Jesus Christ himself isn't worth 500 times his median workers' pay"—Abigail Disney, the granddaughter of Disney cofounder Roy Disney to CNBC.
- The Dumbo in the room is Disney CEO Bob Iger, who was awarded $65.6 million last fiscal year. Iger is one of entertainment’s highest paid execs, though his max annual pay was recently cut by $13.5 million.
2. “At some point fairly soon after launch, it will house the entire Disney motion picture library”—Iger to shareholders at Disney’s annual meeting.
- Disney will be opening what had been a locked “vault” of classics to put on Disney+, the company’s upcoming streaming service.
3. “No one has ever attempted anything of this magnitude”—Iger again.
- The new “Star Wars” attraction is coming to Disneyland on May 31...but you’ll need a reservation to get in.
QUIZ
Quizzy Izzy
More Instagram followers than Instant Pot. Darker than the Game of Thrones trailer. Never giving up on the last Blockbuster. It’s the Brew’s weekly news quiz.
1. Name the author: “I believe the future of communication will increasingly shift to private, encrypted services where people can be confident what they say to each other stays secure and their messages and content won’t stick around forever.”
2. Fill in the blank: According to a new study, 40% of European AI startups __________.
3. West Texas is in the middle of an energy boom. Which of the following is not happening as a result, per a WSJ report?
The Midland RockHounds minor league baseball team changed its name to the Midland Frackers.
Barbers are making up to $180,000 a year.
Companies are reserving tables at bars for over $6,000.
There are 30-minute lines outside BBQ joints.
4. You’re looking at the updated 1000 franc note of which country?
5. Volvo announced it’ll be capping the top speed of all its vehicles starting next year. What’s the top speed?
Answers: 1) Mark Zuckerberg 2) Don’t actually use AI 3) The baseball team is still the RockHounds 4) Switzerland 5) About 112 mph
WHAT ELSE IS BREWING
- SoftBank is launching a $5 billion investment fund focused on tech companies in Latin America.
- Eventbrite posted a BIG revenue miss and its stock dropped as much as 25% after hours.
- Netflix’s (-1.95%) CMO Kelly Bennett is stepping down after seven years on the job.
- Apple CEO Tim Cook changed his name on Twitter to “Tim Apple” a day after President Trump referred to him as…“Tim Apple.”
BREAKROOM
Friday Puzzle
Today's puzzle comes courtesy of NPR Puzzlemaster Will Shortz and is dedicated to International Women's Day.
Take the 7-letter last name of a famous woman. Drop the letter E. Add an I and an F. You can rearrange the result to get a word that famously describes this woman. Who's the woman, and what's the word?
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Breakroom Answers
Friday Puzzle
Gloria Steinem —> Feminist
Nemo quo iusto dolorum eos rerum quia occaecati. Omnis pariatur minus dolor adipisci praesentium nesciunt. Porro id autem ut maiores numquam. Natus ipsam esse fugiat.
Harum aliquam magnam necessitatibus dolore consequatur totam natus. Quis sunt ipsum sint similique omnis est. Recusandae sit similique vel explicabo. Voluptas saepe vero laudantium ut. Accusantium doloremque labore eum dolorem. Libero non atque aliquid facilis.
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