Airbnb was already losing money before the pandemic broke out, cutting its revenue by nearly a third. This was announced by the shared apartment company in documents filed on Monday ahead of a planned IPO of its shares.
The San Francisco-based company has yet to set a date for its IPO, but it lays the groundwork by filing financial records with US securities regulators.
The documents show that prior to the coronavirus outbreak earlier this year, Airbnb was spending a lot of money on technology and marketing to grow its business. The company said it is expanding its activities and adding new programs, such as tours and other experiences, that travelers could book through its website.
Revenue rose 32% to $ 4.8 billion in 2019, but posted a net loss of $ 674 million that year. The company also lost money in 2018 and 2017.
This year, Airbnb said, revenue fell 32% to $ 2.5 billion in the first nine months as travelers canceled their plans for post-pandemic travel crippled and enforced bans around the world.
The pandemic forced a financial settlement, the company said. In May, Airbnb cut 1,900 employees, or around 25% of its workforce, and cut investments in non-core programs such as film production.
Airbnb funded $ 2 billion in operations from a variety of sources, including a $ 1 billion investment from private equity firms Silver Lake and Sixth Street Partners.
Now, the company says, demand is recovering as some travelers view home rentals as safer than crowded hotels. The number of nights and experiences booked, which decreased more than 100% in March and April, decreased by 28% in July, August and September.
According to Airbnb, the business model is robust and can adapt to future travel needs, including an increase in business travelers looking to work from a rental home.
“We believe the lines between travel and life are blurring and the global pandemic has accelerated the ability to live anywhere,” the company said.
Airbnb said it currently has 7.4 million entries operated by 4 million hosts worldwide. 86 percent of hosts are outside of the United States and 55 percent are women.
The company had 54 million guests in 2019.
Airbnb was founded 12 years ago by Brian Chesky and Joe Gebbia – classmates at the Rhode Island School of Design – and Nate Blecharczyk, a software engineer. Her first listing was Chesky and Gebbia’s apartment in San Francisco.
Chesky, the CEO of Airbnb, is receiving an estimated $ 120 million multi-year stock grant in lieu of a salary. The award will carry over when it hits stock price targets over the next decade.
Airbnb’s massive growth has not been without complications.
The company has angered some cities accusing it of promoting overtourism and making neighborhoods less affordable by taking housing off the market. Cities like Los Angeles, Barcelona, Paris, and even Airbnb’s hometown, San Francisco, have passed laws restricting rentals.
The company has tried to improve its reputation as a couch surfer by adding luxury rentals and promising to review each of its properties to make sure the photos on its website match the accommodations.
There has been action against parties since a gunfight at an illegal Airbnb house party in California in 2019. Five people died in the shooting.
In the meantime, relations with his hosts are sometimes frayed. Earlier this year, hosts were furious when Airbnb allowed guests to cancel and receive full refunds during the pandemic. Airbnb later promised the hosts $ 250 million to make up for the deficit.
More recently, the company announced that it would allocate 9.2 million shares to a host foundation that will fund projects for hosts when their value exceeds $ 1 billion. A 15-member advisory board has also been named to distribute these funds and meet regularly with Airbnb leadership.