The Download: Airbnb submitted its filing for a $1 billion initial public offering on Monday. The San Francisco–based home-sharing company will list on the Nasdaq under the ticker ABNB; the listing will be led by Morgan Stanley and Goldman Sachs.
The Outlook: Once valued at $31 billion in 2017, Airbnb’s valuation fell to $18 billion when it secured an emergency equity and debt round at the beginning of the pandemic. While it reported a $700 million net loss on $2.5 billion for the first nine months of 2020, compared to a $322 million net loss on $3.7 billion in revenue for the same period the year before, drastic cost-cutting measures and a rebound in bookings led to a $219 million profit in the third quarter.
In Their Own Words: On the resiliency of its business model: “People wanted to get out of their homes and yearned to travel, but they did not want to go far or to be in crowded hotel lobbies. Domestic travel quickly rebounded on Airbnb around the world as millions of guests took trips closer to home. Stays of longer than a few days started increasing as work-from-home became work-from-any-home on Airbnb. We believe that the lines between travel and living are blurring, and the global pandemic has accelerated the ability to live anywhere,” the company stated in its prospectus.
Surface Says: Airbnb is in a unique position to capitalize on the paradigm shift in travel. But you can bet hotels are taking note of the work-from-home trends, too, and the industry will be racing to innovate as we emerge from the pandemic. The recent news that Airbnb hired Jony Ive and his firm LoveForm to revamp its app, website, and rating system piqued our attention, though we’ll have to wait and see whether it proves to be a fruitful partnership. The travel industry will be watching the company’s IPO closely for clues about its enduring strength.
