Billionaire investor Warren Buffett, who regularly steers clear of investments in technology, has the company Airbnb in his sights. But not for the reasons that you might think.
Berkshire Hathaway, Warren Buffett’s investment company, recently reached out to the home rentals company. They did this in order to provide cheaper alternatives for lodging to the over 30,000 shareholders that travel the Omaha each May for the annual meeting. He mentioned that Omaha hotels raise rates significantly when the meeting takes place each year, and some shareholders complain about the high cost of rooms.
The Omaha World Herald also reported recently that hotels raise the price of rooms to as high as $350 a night when the Berkshire Hathaway event is taking place. This is a two or three time increase from the normal rate of rooms. As well, some of the hotels will place a minimum stay of three days when the annual meeting is in town.
Buffett mentioned to CNN on Wednesday that he has received letters from shareholders complaining about the rates at hotels, and some people have even stopped coming to the meeting because the cost is so high.
“People think all Berkshire shareholders are rich,” said Buffett. “Half our shareholders have an investment of $12,000 or less in the company. So if you spend a couple thousand dollars going to the meeting that is significant.”
That’s why Buffett had Tracy Britt Cool of Berkshire Hathaway, who is also a young key adviser and a rising star at the company, reach out to Airbnb. She encouraged this business to think about expanding its presence in Omaha. Buffett tells us that the response from Airbnb was quite positive and said that they plan to look into the situation. Airbnb didn’t respond immediately when a comment was requested.
Buffett also made a note of mentioning that Airbnb would unlikely be ready for a partnership for this year’s annual meeting, which is scheduled to take place on May 3. Most of the shareholders have already taken care of their lodging requirements, and Buffett also mentioned that the Airbnb conversation is still “very much at the exploratory state.”
He also doesn’t have an interest in investing in Airbnb, which based on reports is in the process of raising a new round of financing with venture capitalists. This could potentially value the company at $10 billion.
“This is not an investment idea – this is for our shareholders,” said Buffett.
At this time, Berkshire Hathaway does not own shares of any of the major hotel chains. They also have no investment in airlines. A Wall Street Journal report from last Tuesday said how Buffett also mentioned being annoyed with the way that airlines charge higher fees on flights to Omaha when the Berkshire Hathaway weekend event is taking place.
As a matter of fact, Buffett says in his annual letters to shareholders this year that attendees might consider flying into Kansas City and rent a car in order to drive in to Omaha to save money.
“I’m like a mother bear wanting to protect her cubs when it comes to the shareholders,” said Buffett to CNN.