Airbnb, the online marketplace that connects people who want to rent out their homes with people seeking such accommodations, is filing to go public soon. The company on Monday released its prospectus. The company would be listed on NASDAQ as “ABNB.”
Data showed the company realized $219 million net income on revenues of $1.34 billion last quarter. However, this figure is a 19% decrease in the $1.65 billion in revenue it made within the same period in 2019. In spite of the net losses incurred over the years, the company still showed turned out occasional profits in some quarters, especially the second and third quarters of 2018 and third quarter of 2019.
The company said it would build a community around its hosts and guests and ensure that such a community is among the best to find in the accommodation marketplace. It stated that it would set up an endowment for hosts, made up of 9.2 million shares of non-voting stock.
Last year, the company reported a net loss of $674 million on revenues of $4.81 billion. It has so far reported a net loss of nearly $697 million on revenues of $2.52 billion. This double decline in revenues is expectedly occasioned by the coronavirus pandemic, which has seen the hospitality industry take a dip in patronage due to travel bans and restrictions.
“The COVID-19 pandemic and the impact of actions to mitigate the COVID-19 pandemic have materially adversely impacted and will continue to impact our business, results of operations, and financial condition,” the company said, as part of its risk factor.
On the company’s list of competitors were the likes of Bookings Holdings, Expedia Group, Google, TripAdvisor, Trivago, Craiglist, and hotel chains Marriott, Hiltons, among several others.
The company will offer three stock options. Class A stockholders will get one vote per share; Class B holders, made up of founders and early investors, will get 20 votes per share. Class H, reserved for long-time hosts, will get no votes.
It’s been a tough year for Airbnb, which saw their revenues halved from last year’s figure. The coronavirus pandemic restricted travel all over the world for months on end. To survive, Airbnb, with a valuation pegged at $18 billion, raised $2 billion in new debt funding. The company also announced significant cost-cutting measures, including slashing of marketing costs and the layoffs of 1,900 employers, representing 25% of its staff, CNBC reports.
The U.S. Travel Association, in its November 5 report, estimated that the travel industry had lost a whopping $443 billion in revenues due to the coronavirus pandemic.
However, the company experienced an increase in revenues when residents who could afford it thronged to the rural areas to avoid the rising cases of coronavirus infections that had blighted the urban areas. The company said this rebound started just after two months into the pandemic.
Airbnb admitted that the number of rentals has since slumped once again due to the pandemic, and further decline can be expected. It said many hosts relied on the service to help meet their mortgages, living expenses, and other financial commitments, and with no listings coming forth, these people may see their source of income severely impacted.
The company had lots of issues with its hosts this year when it enforced an extenuating circumstances policy in March, which could set aside hosts’ cancellation policies and offer full refunds to guests affected by the coronavirus.
Airbnb has since established a $250 million coronavirus relief fund for hosts. This fund made possible a 25% refund of what they would have received under the rescinded cancellation policy. Still, many hosts said they had not received theirs, or in some cases, incomplete payments were made.
One of the company hosts sued the platform in a class-action in November for violating the terms of its contract with hosts when it implemented the extenuating circumstances policy.
Source: wsj.com
