Airbnb Lost $3.89 Billion in Q4 on High IPO Charges and Falling Bookings

By Adriaan Brits Friday, February 26, 2021

Airbnb, a vacation-rental online company, reported it lost $3.89 billion in Q4 to end-December 2020.

Various travel apps on a smartphone.

High IPO Charges Yield Higher Losses

Airbnb said it lost $11.24 per share due to high charges related to the initial public offering (IPO) the company conducted in December last year. A loss of $3.89 billion is much higher than a loss of $352 million reported a year ago.

On a more positive note, the company reported a Q4 revenue of $859 million to beat the $748 million the market’s analysts expected. A higher-than-expected revenue was recorded despite the fact that the rental business reported 46.3 million nights and experiences booked, representing a plunge by 39% year-over-year (YOY).

“Our performance in 2020 showed that Airbnb is resilient and inherently adaptable. Travel is coming back and we are laser-focused on preparing for the travel rebound,” Airbnb co-founder and CEO Brian Chesky said.

For the third quarter to end-September, Airbnb reported 61.8 million nights and experiences. The company generated $5.9 billion from gross booking value, down 31% YOY.

The business expects “to have limited visibility for growth trends in 2021 given the difficulty in determining the pace of vaccine roll-outs and the related impact on willingness to travel.”

The COVID-19 pandemic resulted in strict lockdown measures implemented to curb the spread of the virus. Given falling revenue, the rental business said it will cut marketing costs.

“What the pandemic showed is that we can take marketing down to zero and still have 95% of the same traffic as the year before. We’re not going to forget that lesson,” Chesky told CNBC.

Airbnb completed its IPO in December to mark an extremely turbulent year for the hospitality business. Airbnb stock opened at $146 per share on the first trading day, which is more than double compared to the $68 per share opening price set a day earlier. The stock ended the first day 112% in the green.

In the meantime, Airbnb’s business valuation has surpassed the $100 billion mark. However, the management is not paying too much attention to that front.

“I don’t think I’m going to worry much more than in April and May when we saw our business drop 80% in eight weeks in the middle of a pandemic,” Chesky told CNBC in December when asked about the business valuation of his company.

Summary

Airbnb reported higher-than-expected revenue for Q4 2020 and a $3.89 billion loss amid falling bookings and high IPO charges.

About the Author


Headshot of Adriaan Brits

An analyst of global affairs, Adriaan has an MSC from Oxford, with diverse interests in the digital economy, entertainment, and business. He is a specialist trainer in advanced analytics and media.

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