US: Airbnb is refusing to rule out the possibility of moving ahead with its initial public offering [IPO] by the end of the year, after the process was initially scheduled to begin on 31 March.
It comes as the company reports a recent surge in bookings for listings across the United States between 17 May and 3 June, which exceeds those made during the same timeframe last year, despite the outbreak of the coronavirus. Similar increases for domestic staycations have also been reported in countries such as Germany, Portugal, South Korea and New Zealand.
This unexpected resurgence ensures that Airbnb’s plan to go public this year will remain on the table as a possible option and may not be delayed until next year.
Speaking to Bloomberg, CEO Brian Chesky said: “We’re not ruling out going public this year and we’re not committing to it.”
The company was the subject of a $31 million valuation at the time of its most recent private fundraising round in 2017 but this is now thought to have dropped to around $18 billion as the reality of the impact the coronavirus is having on travel becomes increasingly clear.
Though the rebound is still relatively small compared to pre-pandemic levels, it is clear that the collective impulse of travellers to get out of their homes after months in lockdown is driving an upsurge in reservations. As a result, Chesky said booking windows for international trips were being shortened as guests book more spontaneous trips for weekends in rural destinations that can be extended to become week-long breaks.
It echoed the words of Vrbo president Jeff Hurst, who told Bloomberg that travellers were seeking to rent vacation homes in non-urban locations, rather than hotels, as it is more conducive to social distancing or self-isolation.
Another reason that could be attributed to this booking trend is the sudden shift towards remote working, brought about by restrictions on movement, as well as the concerns over cleanliness and sanitisation in office spaces. Chesky added that many of the bookings are being made as people continue to work, supporting his claim that “work from home is becoming work from any home”.
As travel restrictions remain in place on many borders across the world, however, it is unclear whether this booking shift will be maintained at its current rate through the rest of the year.
If Airbnb does decide to plough ahead with its IPO plans by the end of the year, it will represent an encouraging turnaround for the company and a remarkable indication of confidence in the travel sector’s recovery in the face of grave forecasts. Many professionals in the short-term rental industry were initially predicting a stunted rebound by late-summer or even later, but the signs are that this pick up is arriving earlier than expected.
It was only back in February that Airbnb reported a loss of $322 million for the nine months leading up to September 2019, while the first indications that it would be forced to delay its public debut only came to light at the start of March, as organisers around the world began to cancel or postpone their events and conferences. CNN’s business correspondent Chris Isidore predicted that the coronavirus outbreak would have as seismic a shock for the travel industry as 9/11 did post-September 2001.
Since then, Airbnb has raised $2 billion in two separate tranches through debt, equity and a line of credit as it attempts to weather the storm generated by Covid-19. Then a month ago, it announced a round of layoffs, trimming its workforce by 25 per cent in a further cost cutting measure after previously halting all expenditure on marketing and new hirings.
Airbnb is not immune to the current harsh economic climate and with more than 40 million Americans now unemployed, it is unclear how the company will proceed in unpredictable and unprecedented times. It may, though, show there is light at the end of the tunnel for travel after months of cancellations if Airbnb is able to pull off the move.