Airbnb was rumoured to be planning to file for its IPO by the end of this month, despite a reported 67% drop in revenue for the second quarter.
The platform has seen bookings build as travel restrictions ease, with travellers drawn to the social distancing potential of its properties.
Prior to the pandemic Airbnb had planned to IPO this year, with a direct listing mooted, which would have allowed its investors to exit, but without raising additional cash.
Reports suggested that the company saw revenue fall to $335m in the period ending June 30, with a loss before interest, taxes, depreciation and amortization of $400m. Bookings were down 30% in June from a year earlier, compared with a 70% decline in May. The company reported an adjusted loss of $341m in the first quarter, compared with a loss of $292m a year earlier.
Short-term rentals were found to be more resilient than hotels during the pandemic, according to analysis from STR and AirDNA.
The study reported that, at the end of June, hotel revpar in 27 markets around the world was 64.8% lower than the previous year, while short-term rental revpar was down 4.5%.
The research said: “The fall for short-term rentals was not as severe as hotels’ for a variety of reasons. First, short-term rentals can make social distancing easier given the availability of larger units as well as an availability of inventory in more rural and/or remote vacation markets - locations that allowed travellers to escape more densely populated urban markets where cases were spiking.
“Second, most short-term rentals offer full-service amenities (such as kitchens and living space), which allowed for longer-term stays and became more popular as families looked for spaces to retreat. As a result, average length of stay increased by 58% during the crisis.”
The initial stages of the pandemic had seen a move by landlords back into the traditional rental market, according to research by Airdna and RightMove.
The high yields of the short-term rental market appeared to have been abandoned in favour of the stability of the long-term rental market, with Rightmove reporting a 45% year-on-year increase in central London homes listed.
“There was a notable increase in new rental listings coming on to Rightmove in some of the most popular tourist areas like Bath, Edinburgh, Brighton and areas of central London, likely as landlords who normally rent out their properties as holiday homes looked to find another income route by offering it to long-term tenants instead,” Rightmove’s Miles Shipside said.
In April Airbnb raised $2bn, with a $1bn syndicated term loan from institutional investors adding to $1bn it raised from Silver Lake and Sixth Street Partners.
Airbnb co-founder Brian Chesky said that the money meant rather than, rather that “merely hunkering down”, the company would “continue moving forward”.
It was thought that private equity firms Silver Lake, Apollo Global Management, Sixth Street Partners, Oaktree Capital Management and Owl Rock participated, with the loan priced at an interest rate of 750 basis points over the Libor benchmark.
Chesky said: “We know travel will return and rather than merely hunkering down, the support we have received will allow Airbnb to continue moving forward as we invest in our community. All of the actions we have taken over the last several weeks assure that Airbnb will emerge from the storm of the pandemic even stronger, regardless of how long the storm lasts.”
Insight: Will they, won’t they? It’s been more tense than trying to guess how many Travelodges will be left in the UK by the end of the year. Well, maybe not as tense than all that, after all, the more times Airbnb gives us a look at its ankle, the less thrilling it is.
Because for those of us observing the sector, it’s all about getting a look under the hood at Airbnb and finding out what it’s really made of. Multiple times our hopes have been dashed, is now the time? It could well be. At the start of the year Chesky was all about how he didn’t need to IPO, didn’t need the money, it was more about giving investors a chance to get out. Now, having taken private equity’s dollar, and not cheaply, he may well be less sanguine.
What will we see? What we haven’t seen so far is the much-chatted-about move to long term and, with so many people turning to the platform for some splendid isolation, Airbnb is no doubt less inclined to start having revenue thoughts about students. There not being many students wandering the globe is only going to compound this. Until the pandemic shifts, Airbnb will continue to be a thorn for hoteliers. Start work on that vaccine, folks.