A pandemic that brought global travel to a standstill couldn’t halt Airbnb Inc.’s hotly anticipated public debut.
While business is still down overall and nowhere close to pre-pandemic levels, the San Francisco home-rental startup has gained ground over rivals in the hotel industry as people have ventured into small towns and cities to work remotely, or taken a manageable break from a health crisis that has largely kept them at home.
Source: AirDNA
One bright spot for the company during the pandemic: rural bookings. Big cities visited by tourists had been Airbnb’s strength, but it redesigned its app and website to focus on local stays as people flocked to destinations within driving distance.
In August, more than half of bookings made were for stays within 300 miles of the guest’s location, according to the company.
As Airbnb blossomed into a global behemoth, it spent big. Costs jumped five-fold between 2015 and 2019. The pandemic forced the company to shed a quarter of staff, remove noncore businesses and drastically cut sales and marketing, a big expense.
Airbnb’s bloating costs have largely exceeded its revenue in the past five years.
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$6.0 billion
Expenses have been moving further
away from Airbnb’s base revenue the
past few years.
Costs and expenses
Revenue exceeds
expenses by
$19 million
$490 million
difference
$6.0 billion
Expenses have been moving further
away from Airbnb’s base revenue the
past few years.
Costs and expenses
Revenue exceeds
expenses by
$19 million
$490 million
difference
$6.0 billion
Expenses have been moving further
away from Airbnb’s base revenue the
past few years.
Costs and expenses
Revenue exceeds
expenses by
$19 million
$490 million
difference
Expenses have been moving further
away from Airbnb’s base revenue the
past few years.
Costs and expenses
$6.0 billion
Revenue
exceeds
expenses by
$19 million
$490
million
difference
Like many Silicon Valley startups that are bleeding red ink when they go public, Airbnb has never posted a full-year profit. Its loss last year was greater than its losses in the previous four years combined. And it lost more than twice as much through the first nine months of this year than it did in the year-earlier period, largely because of shrinking revenue earlier in the health crisis.
But an unforeseen pickup in local stays, combined with deep cost cuts, led the company to post a profit in the third quarter of this year. The June-September quarter is typically strong for the platform because of seasonal factors including summer vacations, and Airbnb has turned a profit in that period since 2018. Airbnb’s future prospects will depend on whether it can turn a profit in other quarters and, eventually, annually.
Airbnb’s valuation has been buoyed by the red-hot IPO market. So far in 2020, more than $140 billion has been raised on U.S. exchanges, far exceeding the previous full-year record set at the height of the dot-com boom in 1999, according to Dealogic data that date to 1995. The company is expected to debut Thursday at a valuation of about $47 billion, a remarkable turnaround from the $18 billion that it was valued at early in the health crisis eight months ago.
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December 2020
Airbnb valuation
About
$47 billion*
April 2020
$31 billion
*Based on its IPO pricing
$18 billion
Source: WSJ reporting
December 2020
Airbnb valuation
About
$47 billion*
April 2020
$31 billion
*Based on its IPO pricing
$18 billion
Source: WSJ reporting
Airbnb valuation
December 2020
About
$47 billion*
April 2020
$31 billion
$18 billion
*Based on its IPO pricing
Source: WSJ reporting
Airbnb valuation
About
$47 billion*
$18
billion
$31 billion
April
2020
December
2020
*Based on its IPO pricing
Source: WSJ reporting
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