Airbnb: how the “Amazon of travel” was spruced up for market
The home-sharing giant Airbnb is expected to make its stock-exchange debut next month, valued at around $30bn. There’s nothing like a quick spruce-up to impress would-be punters, said The Wall Street Journal – and Airbnb has dressed to impress. Its filing documents are full of hints on how to turn deep cutbacks into a profit. Indeed, “by overhauling its business and shedding costs to help manage lockdown restrictions”, Airbnb managed to post a profit of $219m in the third quarter. Quite a makeover for a business that looked in tatters when Covid19 forced it to shelve its original IPO in March.
Bankers then had hoped to portray Airbnb as the “Amazon of travel”. But co-founder Brian
Chesky was left “scrambling to save his company” when the shutters came down, said James Titcomb in The Daily Telegraph. Not only did bookings plummet, but “millions of guests started demanding refunds”. The San Francisco-based company was forced to lay off a quarter of its workforce and take $2bn in emergency loans to stay afloat. But easing lockdowns produced a V-shaped summer recovery and, having shifted to “staycations and rural escapes”, Airbnb has returned in a far stronger position than many rivals in the hotel business, who are “saddled with heavy property costs” and unused rooms.
There was “immense pain” in the short run, but it would be “hard to design a better scenario for Airbnb in the long run”, said one former executive. Indeed, 12 years after its founding, the company’s float – which is expected to bring in $3bn for the business – will be “the biggest on Nasdaq since Facebook raised $16bn in 2012”, said Danny Fortson in The Sunday Times. One thing that’s certain is that it will be a “wealth-creation bonanza” for the company’s 6,000 shareholding workers and early backers – including Amazon’s Jeff Bezos.