The travel industry worldwide has been hit hard by the COVID-19 outbreak. Even though we can now perceive light at the end of the tunnel, we still have not become much wiser about what the future holds. In the midst of it all, today Airbnb went public on NASDAQ. In reality, the industry giant has been planning to go public for a whole now, but it is rather baffling as to why they chose to do it precisely in the middle of the worst crisis ever.
All the same, they have little choice as they are under a lot of pressure. They must raise capital if they want to to survive. On 16th November 2020, they filed to go public after two years of financial losses,while knowing that 2020 will most likely end up being a total disaster, as for everyone else in the tourist industry.
Experts are divided as to whether it is worth investing in Airbnb stocks or not. If you were to lay their opinions on a scale from 0-10, you would find them at both ends of the spectrum. Airbnb is a huge business with a strong, recognized brand name. They are, and have always been, incredibly good at putting on a spin on things. Always managing to turn negative stories into positive ones. Even though they were in the middle of the hurricane just eight months ago, they have, in a record time, managed to ride the wave.
In recent months, they have set their focus mainly on homeowners, the core of their business. When the pandemic started in March, Airbnb unilaterally decided to refund money to travellers directly contravening cancellation policies set by the hosts who were legally entitled to payouts.
A few months later, Brian Chesky, felt compelled to apologize to homeowners and set up a $250 million relief fund. Owners who were entitled to payments subsequently received 12.5% of the amount they should have received in the first place.
During the sanitary crisis, Airbnb introduced a number of changes, many of which were triggered by the advent of the virus. Among other things, Airbnb dismissed 1,900 employees in May. That of course had a direct negative impact on customer service and advertising. It is also worth noting that they closed their luxury home website (www.luxuryretreats.com), which has now been incorporated onto their main site (www.airbnb.com/luxury)
Airbnb also hired Catherine Powell, a key stakeholder in the organisation, naming her “Global Head of Hosting”. Her main function will be to rebuild trust with owners, trust which was greatly damaged during the coronavirus crisis. According to Powell, the company needs to get back to its roots.
Last June, the company also launched “Airbnb Experiences”, virtual activities designed and led by locals, which the company coined as "a new way to travel from home". Rumor has it that this new venture was a success during the COVID-19 crisis.
Last but not least, Airbnb introduced “Airbnb.org”, a non-for-profit branch of the business which partners with others NPO’s to give back to the community by providing stays for essential workers and refugees. During the pandemic, Airbnb helped doctors and nurses by putting a roof over their heads. According to their own statistics, they claim to have helped 75,000 people in need.
Today, Airbnb went public on NASDAQ stock exchange under the trading name ABNB. I have personally been a customer of Airbnb for many years, and will probably be for many more. I'm what Airbnb calls their “partner”, although I have to admit that it's hard to consider myself as a partner.
Having said that, I have to recognize that they are brilliant and I believe that they will continue to succeed. I also think that it is a sound move to invest in the ABNB stock. Airbnb is expected to raise $3 billion on their IPO and end up being worth $42 billion. The going price for the Airbnb share will be between USD $56 - 60. On a scale from 0 to 10, I would consider the investment as an 8.
