Airbnb has shaken the travel industry – not always to the delight of renters or local authorities. At the end of the pandemic year 2020, the company is now daring to go public.
By Katharina Wilhelm, ARD Studio Los Angeles
It all started 13 years ago with an idea from three students when they were struggling to pay their rent in expensive San Francisco. For an upcoming conference they put three air mattresses in the living room and gave up their offer. The idea for Airbnb, in English “air mattress bed and breakfast”, was born. In 2008 the start-up was officially launched. At least that is the founding mythology that Brian Chesky, Joe Gebbia and Nathan Blecharczyk like to tell.
Of course, something more was needed, namely a good strategy and technical know-how. Founding member and managing director Chesky told the technology conference “Code” what he measured with Airbnb: “My role models were eBay and Craigslist. They were the big ones in the classifieds.”
Half a billion overnight stays
Airbnb is now mentioned in the same breath as other big players in the so-called sharing economy. More than 500 million overnight stays have been booked via Airbnb since the company was founded. Airbnb provides a platform where providers and customers come together. If the placement is successful, the company receives a placement fee.
The Silicon Valley company is successful, and that also means that you have to take responsibility, as Chesky admits: “The tech world has always wanted to stay out of a lot, but that’s not the role society sees it in. We always thought we were the good guys. But we have to do more. Suddenly we’re so big that we have a big impact on society. ”
The company is repeatedly accused of contributing to the housing shortage in metropolises such as New York, Berlin or Paris. The result: some cities have completely banned subletting to holidaymakers or at least adopted strict rules. For example, in some major cities, guests have to stay overnight for at least 30 days if they want to rent an entire apartment, or occupancy taxes are due. Despite all that: Airbnb is one of the strongest competitors for the hotel industry and has some imitators.
However, the stricter regulations also mean that it is less worthwhile for private landlords to offer their rooms or apartments. There are now many professional companies on the market. There is not much left of the original idea of giving private individuals a little extra income via room service.
2020 should be the year for Airbnb. The company actually wanted to go public this spring, but then the corona pandemic came. “I felt like the captain of a ship that was hit by a torpedo,” CEO Chesky told Bloomberg TV channel in the summer.
Expressed in numbers: In March 2017 the company was worth 31 billion US dollars, in April 2020 it was suddenly only 18 billion. Entry stops and exit restrictions had not only taken away the desire to travel, but in some cases these were not allowed – worldwide.
Large-scale layoffs
Airbnb had to take tough countermeasures. The company laid off 25 percent of its workforce, around 2000 employees, cut marketing expenses and the salaries of the board members for six months. The austerity program showed success by autumn. In the past quarter, a profit was even posted, Airbnb is still not profitable for the full year, the losses in 2020 were too high for that. The investors had to help with cash injections.
After all, there is also a positive trend for the apartment broker: Travelers are looking for houses and apartments for self-sufficiency, hotels tend to be avoided. This is exactly where Airbnb could obviously score with its offer. In the USA, this is commonly known as “staycation”, a play on words made up of “stay” and “vacation”: it means to take a vacation nearby. “People go on vacation only a few hundred miles away from their home, but then sometimes they stay longer, even a month,” said Airbnb boss Chesky.
The new trend: vacation away from the hustle and bustle
Places far away from the big cities are popular in Corona times. In California, where the company was born, this means, for example, renting a cabin near Sequoia National Park or somewhere in Wine County. In the metropolitan areas, lettings are still largely bad. In the USA in particular, many large cities have become desert experiences. Due to restrictions on going out and the high number of cases, cultural life comes to a standstill there.
For the planned IPO Airbnb wants to sell its shares according to media reports for 56 to 60 dollars, which would mean that the group could be valued at up to 42 billion dollars.
The corona crisis could perhaps still pass Airbnb, because managing director Chesky is hoping for the trend of the home office. Many employers have become more flexible. They made it possible for their employees to work with a laptop – from anywhere, including a rented holiday apartment in the middle of nowhere.
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