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Airbnb was losing money even before the pandemic struck and slashed its revenue by nearly a third, the shared-housing company revealed Monday at a securities filing ahead of a planned initial public offering of its shares.
The San Francisco-based company has yet to set a date for the IPO, but is laying the groundwork by filing financial records.
Documents show that prior to the coronavirus outbreak earlier this year, Airbnb was spending heavily on technology and marketing to grow its business. The company said it was expanding its operations and adding new programs, such as tours and other experiences that travelers could book through its website.
Its revenue increased 32% to $ 4.8 billion in 2019, but it reported a net loss of $ 674 million that year. The company also lost money in 2018 and 2017.
This year, Airbnb said, revenue fell 32% to $ 2.5 billion in the first nine months after the pandemic It brought travel to a standstill and caused lockdowns around the world, leaving travelers with no choice but to cancel their plans.
The pandemic forced a financial reckoning, the company said. In May, Airbnb cut 1,900 employees, or about 25% of its workforce, and slashed investments in programs unrelated to its core business, such as movie production.
Airbnb funded operations with $ 2 billion from various sources, including a $ 1 billion investment from private equity firms Silver Lake and Sixth Street Partners.
Now, the company said, demand is picking up as some travelers view home rentals as safer than crowded hotels. The number of nights and experiences booked, which plummeted more than 100% in March and April, dropped 28% in July, August and September.
Airbnb said that indicates its business model is resilient and can accommodate future travel needs, including an increase in business travelers who want to work from a rental home.
“We believe the lines between travel and living are blurring, and the global pandemic has accelerated the ability to live anywhere,” the company said.
Airbnb said it currently has 7.4 million listings managed by 4 million hosts around the world. Eighty-six percent of its hosts are outside of the United States and 55% are women, the company said.
The company said it had 54 million guests in 2019.
Airbnb was founded 12 years ago by Brian Chesky and Joe Gebbia, classmates at the Rhode Island School of Design, and Nate Blecharczyk, a software engineer. His first list was Chesky and Gebbia’s apartment in San Francisco.
Chesky, Airbnb CEO, will receive a multi-year equity grant worth an estimated $ 120 million in lieu of a salary, the company said. The award will be awarded if you meet share price targets for the next decade.
Airbnb’s enormous growth has not been without its complications.
The company has angered some cities who accuse it of promoting over-tourism and making neighborhoods less affordable by take housing off the market. Cities like Los Angeles, Barcelona, Paris, and even Airbnb’s hometown San Francisco they have passed laws restricting their rents.
The company has tried to clean up its reputation for couch surfing by adding luxury rentals and promising to check each of its properties to make sure the photos on its website match the accommodations. It’s also been since a 2019 shooting at an illegal party at an Airbnb home in California that left five people dead.
Meanwhile, relations with their hosts have sometimes deteriorated. Earlier this year, hosts were enraged when Airbnb allowed guests to cancel and get full refunds amid the pandemic. Airbnb then promised hosts $ 250 million to cover the shortfall.
More recently, the company said it will reserve 9.2 million shares for a host endowment, which will fund host projects when their value exceeds $ 1 billion. He also appointed a 15-member host advisory committee to distribute those funds and meet regularly with Airbnb leaders.
