Airbnb IPO launch in doubt

As per data from AirDNA showed Airbnb bookings have collapsed by 40 per cent in China and European cities due to the Covid-19 pandemic, their plans for an initial public offering this year are seriously in doubt.

The cancellation or suspension of big conferences and festivals such as South by South West in Austin, Texas and Mobile World Congress in Barcelona, has hit Airbnb and the host who rent out their homes on its platform.

 In China, AirDNA project year-on-year revenues for Airbnb hosts in Beijing would fall 43 per cent in March, following a 22 per cent decline in February.

This wave of cancellations is also likely to hit Airbnb’s US and UK market, Kameron Bain, director of strategy at Beyond Pricing an Airbnb affiliate that provides pricing suggestions to hosts take into account supply and demand, said there had been mass cancellations in urban centers such as San Francisco, Chicago as well as in Paris and London.

Unlike typical IPO, it can be argued Airbnb is considering a direct listing in which no new shares are created potentially allowing the company to float with a smaller base of public investors.

 In February Airbnb had posted a $322m net loss for the first nine months of 2019, compared to $200m profit for the full year in 2018. Airbnb gave the reason for dismal performance was due to one-off costs in upgrading systems and investing in safety, such as the creation of a 24-hour hotline to deal with emergencies.