It turns out that 2020 had one more surprise up its sleeve for the travel and STR industry: the Airbnb IPO. While the company had planned to go public this year anyway, no one would have predicted that they would have been able to get the valuation that they started 2020 with. Those predictions were right. Airbnb finished 2020 on the Nasdaq at more than three times the valuation it started 2020 with.
Some numbers might help us understand this better. Booking.com, a well known online travel agency (OTA) and competitor of Airbnb, has a market capitalization of $86 billion. At just over $100 billion at the time of this newsletter, not only does Airbnb have a bigger market cap than Booking, it has one bigger than Marriott, Hilton, and Hyatt combined. It turns out those 7 million listings that Airbnb has worldwide continues to inspire confidence in the marketplace, even in a sector that was particular devastated by a pandemic.
What changed for Airbnb?
While there was at first a catastrophic drop in revenue due to lockdowns and quarantines, as Airbnb slashed expenses and made necessary changes, the situation stabilized. People still wanted to travel, and realized that they could do so while still socially distancing.
The other vector that Airbnb never had planned for was the worldwide acceptance of remote work as a new normal. This meant that people were able to travel even though they weren’t on vacation. They were simply “homebasing” someplace else. This has led Airbnb to reconfigure its website to allow for more inspiration at a closer distance from home: 300 miles seems to be the magic number.
Areas of Scrutiny
Now that it’s a publicly traded company, Airbnb is going to receive even more scrutiny, and can no longer play the “brash startup” that it may have played at times in the past.
On a basic level, this might mean that higher standards will be set for hosts and guests in regards to neighborhood noise, partying, and safety. On a higher level, city governments around the world will probably try to find a solution with a publicly traded company now that the narrative is no longer protecting the neighborhood from a “startup.”
Airbnb already has a Neighborhood Support page in place for your neighbors to file a report should they feel there is excessive noise, a disruptive party, or unsafe behavior happening at your property.
If people have a way to resolve an issue with you, it’s easier for everyone than filing a claim with a company. Reach out to your neighbors and give them ways to get a hold of you. If there is something strange happening, you want to hear it from a neighbor before hearing about it from Airbnb (or the police).
Airbnb negotiated good rates for Minut, NoiseAware, and Roomonitor, all simple-to-use solutions to keep you in the loop should the noise at your listing get beyond limits that you set. But beyond that, the pandemic forced them to ban parties globally indefinitely.
Post-IPO Airbnb will likely to continue to put rules and regulations in place to make sure that it solidifies its place in communities worldwide. Hosts can prepare for these changes ahead of time by following regulations in their municipality, having an open line of communication with their neighbors, and using technology to help them monitor noise levels.
Sharing the Wealth with Hosts?
As many of you experienced, there was a major loss of revenue in the first half of the year, but Airbnb tried to address this by offering some percentages of the refunds they had unilaterally given to guests and by establishing a fund that offered strings-free grants to the neediest hosts.
Airbnb continued this line of thinking with its IPO, in which it set aside a $9.2 million endowment fund just for hosts, mostly to fund programs and grants.
All this means that there are more opportunities for you (and for us!) as the new year continues. Who would have thought that after 2020?
This article first appeared in our Guest Book newsletter.