The hotel industry’s most disruptive competitor is reeling from a plunge in bookings due to the full stop of travel both domestically and worldwide. As reported in The Wall Street Journal, “For Airbnb in New York, bookings dropped 21% from March 1 to March 7 compared with those made Jan. 5 to Jan. 11, according to AirDNA, which combs through Airbnb listings for its analysis. AirDNA said the data is based on more than 10 million global listings. In late 2019, Airbnb said it had over 7 million listings.”
The firm had been intending to go public in 2020, and even though it’s valued at $30 billion, it lost $322 million in the first nine months of 2019, also according to the WSJ. To shore things up, the company recently announced a $1 billion cash infusion courtesy of Silver Lake and Sixth Street Partners that’s being dedicated to a combination of debt and equity securities.
About $5 million of that money is earmarked for Airbnb’s “Superhost Relief Fund,” which will provide grants worth a combined total of $15 million to Superhosts who rent out their own homes and need help paying their rents or mortgages, as well as long-tenured Experience hosts trying to make ends meet.
“First off, I want to thank Silver Lake and Sixth Street for their incredible partnership and support,”said Airbnb co-founder, CEO, and head of community Brian Chesky. “They have a well-earned track record for being insightful thought partners who always have a strong sense of where the world is going. I deeply appreciate the confidence and trust that so many have shown in our company even as every sector in travel is going through the storm of the pandemic.”
The company has also expressed an interest in pivoting to longer stays, which could eventually impact multifamily owners/operators and suppliers of student housing. The identified prospective markets include college students and extended stay work assignment situations. “All of the actions we have taken over the last several weeks assure that Airbnb will emerge from the storm of the pandemic even stronger, regardless of how long the storm lasts,” said Chesky.
