Many people thought Airbnb would not survive this past spring, much less continue on its path to an IPO by the end of this year. However, thanks to innovation, flexibility, and some effective debt-avoidance fundraising, the travel site still might pull off a win in 2020.
Although urban rentals have, not surprisingly, declined since March of this year, suburban rentals have increased dramatically, taking rural rental revenues along with them. These sectors have “massively outperformed” urban rentals, said data provider AllTheRooms head of growth Steven Jankowski. He noted that as more and more people choose to avoid plane travel and, as a result, vacation closer to home, hosts in rural areas of the United States actually earned more than $200 million in June 2020. This was up 25 percent over June 2019, and gives the company real, solid hope for its IPO, particularly in conjunction with data indicating 200,000 new hosts have rented properties through Airbnb globally since March 11 of this year.
Jankowski predicted these trends would continue for “some time,” with rental bookings for future dates showing rural areas outperforming urban ones. The company’s “Forward Booking Index” shows dramatic declines in bookings in New York City, for example, into Spring of February 2021.
“COVID-19 has massively handicapped the short-term stays in urban environments, which was a big part of Airbnb’s business. But the other part…which is more longer-term stays in more suburban and rural settings, has expanded to sort of offset that,” said venture capital firm Metaprop’s co-founder Zach Aarons.
Airbnb filed paperwork for its IPO in mid-August. Although financial specifics have not been revealed, the company was valued at $18 billion in April of this year. Although this was down from $31 billion in 2017, analysts say Airbnb’s outperformance of other competitors during the pandemic could be motivating the company to take advantage of changing host and tourist behavior. “For all its market positioning as a different kind of travel provider…Airbnb still sits firmly within the tourism sector,” Beth Daly, editor and general manager of The Conversation, warned in a recent report on the IPO. “It’s success still depends on post-pandemic rebound.”
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