Airbnb in 2020
After a banner year in 2019, Airbnb was a victim of the economic downturn just the same as many other major companies in 2020. With such a heavy reliance on travel and tourism to support Airbnb’s revenue stream, there were certainly losses to account for. In 2019, over the first nine months of the year, the company brought in a collective $3.7 billion. That was down significantly in 2020, with Airbnb only reporting $2.5 billion in revenue over the same period of time, a $1.2 billion drop off. This also resulted in a net loss of $697 million, another major disappointment. These losses also applied to Airbnb’s workforce, which saw 1,900 employees get let go this year, roughly 25% of the entire company staff.
Despite the incredibly rough start to the year, Airbnb eventually made a turnaround in the final months as reduced budget and new avenues of revenue became strong points for the company as it began to recover. In fact, in the quarter ending in September, Airbnb made a strong return to form reporting a profit of $219 million. Much of this was attributed to the growth of business again as consumers began taking longer trips to areas closer to their residences. As more people began working from home, the ability to travel for extended periods of time became significantly easier, and revenues for Airbnb were quick to notice it.
The company expects to see more business in a similar manner moving forward as large portions of the population look to continue to work from home even after the COVID-19 pandemic begins to wane. This has all led up to Airbnb’s recent IPO, which has been nothing short of an unfettered success.
Airbnb debuted on the public market on December 10 of this year to rousing enthusiasm from investors. With an initial set price of $68 per share, the company was expecting solid value but nothing overwhelming. However, despite this being the benchmark set by the company, Airbnb’s stock opened at a whopping $146 per share, more than double its original set price. Airbnb closed today up 112.81% on the day with shares peaking sometime in the afternoon at $163.16 per share. At close on the 10th, Airbnb’s market cap was just shy of $100 billion sitting comfortably at $99.995 billion.
These sorts of numbers have not simply been good for Airbnb, but historically good as well, with the company’s debut being the 10th best in 2020. There is a level of optimism about the future as well. With 650,000 hosts in the United States alone, Airbnb will be well equipped to handle the oncoming surge of travel and tourism once the pandemic eases and the millions of cooped up people around the world rush to see the world once again. The fact that Airbnb ended up turning a profit at all at the end of 2020 is more than a good sign that they will be set to see significantly larger numbers in 2021.
Airbnb’s successful IPO speaks not only to the strength and confidence many people have in the company itself but possibly also to the confidence people have in economic recovery moving into 2021. As vaccines have already begun distribution in certain portions of the world, investors are looking forward toward the oncoming spike in the many industries that have fallen by the wayside in 2020, including travel and tourism.
About the Author
Tom Price is a writer focusing on Entertainment and Sports Features. He has a degree from NYU in English with a minor in Creative Writing. He has been previously published for Washington Square News, Dignitas, CBR, and Numbers on the Boards.