Airbnb is in a tough spot as it prepares to go public amid a downturn in revenue but for the rest of the travel industry the company is thriving
In its IPO prospectus on Monday, Airbnb said third-quarter revenue fell 18% to $ 1 3 billion compared to food delivery company DoorDash, which said in its file on Friday that sales in the fourth quarter more than tripled from between The year’s hottest IPO so far, software maker Snowflake more than doubled revenue in the quarter prior to its IPO, while gaming company Unity grew 43%
Unlike those companies and other companies that hit public markets in 2020, Airbnb was hit hard by the Coronavirus pandemic with the year approaching the $ 35 billion valuation and growing investor demand, Airbnb was attacked when travel was halted, which did not It not only causes business deterioration but also forced the company to compensate travelers for cancellations
Along with airlines, hotels, and online travel agencies, Airbnb saw a disastrous second quarter cut revenue by 72%, the company laid 25% of its workforce, downgraded its valuation and raised nearly $ 2 billion in high-interest debt.
While other parts of the industry remain in chaos, Airbnb is falling even as revenue dips in the third quarter. This was Airbnb’s second-largest period on record, after only the same quarter in 2019. And because the company cut sales and marketing costs by 74%, Airbnb made a quarterly profit of $ 219 million
People weren’t traveling much to big cities like New York, Chicago, and Los Angeles, but starting in the summer, they were looking for cabins by the lake or in the mountains for a weekend getaway or as a one or two months’ retirement from working remotely.
“They decide to ride in their cars and travel close to home, often residing in small towns and rural communities,” Airbnb founders wrote in their letter to potential filing contributors “Our business bounced faster than anyone expected, and it showed that as the world changed, our model Adaptable “
Compare that to online travel giant Booking Holdings, which reported earlier this month that third-quarter revenues were down 48% due to closures and travel restrictions, “continuing to impact travel in the near term,” the CEO said. Glenn Vogel Expedia performed worse, with sales down 58% in the period and prospects for a “long and bumpy road to recovery”, CEO Peter Kern said.
Airlines and hotels collapse Delta recorded a 79% decline in revenue in the fourth quarter, United sales down 78% and Southwest down 68% On the hospitality front, Marriott revenue fell 66% while Hilton and Wyndham hotels fell by 40%.
Across the board, travel companies confirmed the industry has bounced back from its lows in March and April, the first months of the pandemic, Hilton CEO Christopher Nacita said in the company’s earnings statement this month, “Although a full recovery will take some time, we are … It is well positioned to capture growing demand and implement growth opportunities “
The fourth quarter might be ugly for all of them, including Airbnb Yos scores close to 150000 new Coronavirus cases every day, more than double the rate it was a month ago, and infectious disease experts are advising people to avoid large family gatherings during Thanksgiving and the Christmas holidays. Increasingly it seems that the arrival of the Covid 19 vaccine to the masses will return the economy to a normal state More
Airbnb is not hiding the risks The company referred to Covid or Coronavirus 219 times in the prospectus and said it expects a sharp drop in bookings volume year on year in the fourth quarter compared to the third quarter due to the recent rise
“The COVID-19 pandemic and the measures taken to mitigate the COVID-19 pandemic have had a material impact and will continue to adversely affect our business, the results of our operations, and our financial position.
Nevertheless, Airbnb has at least shown that in a world where people travel to remote areas and find creative ways to work from anywhere, the company has a more optimistic story than its industry counterparts.
Instead of trying to fill empty hotel rooms or keep middle seats open on planes, Airbnb’s offerings are well suited to adapt to this changing dynamic, the company says
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World News – US – The Airbnb IPO file shows it is out of the epidemic better than its travel industry peers