Nick Shay, head of travel and hospitality at digital consultancy Publicis Sapient, says now is a good time to be raising capital
Comment: Airbnb’s agility makes it the most anticipated US stock market float of 2020
Nick Shay, head of travel and hospitality at digital consultancy Publicis Sapient
Airbnb’s filing is the most anticipated US stock market float in 2020.
And when you look at what is happening with the stock market, now is a good time to be raising capital.
During a year like no other, Airbnb’s business has been hit hard.
The numbers show this – $576 million loss in Q2 – however, like so many digital businesses, it continues to weather the coronavirus storm relatively well.
Over the summer months, bookings returned to pre-pandemic levels as people sought to escape lockdown life, and Q3 once again reported strong results.
Whilst I expect them to drop again with the latest and current wave of global lockdowns, previous months show how quickly Airbnb is able to bounce back.
It’s this agility and nimbleness that puts it ahead of the competition.
It’s unfortunately more complicated for the traditional hotel sector. Whereas Airbnb is a digital platform business with minimal physical assets and subsequent employees, the hotel sector is not.
Whilst the sector has moved towards an asset light model, it still has higher overheads.
Secondly, Airbnb is focused on vacation rentals and was historically far less reliant on business travel.
Given we expect to see leisure travel bounce back more quickly as we adopt working from home for an indefinite period, the hotel sector is going to need to adapt further.
I expect to see a continued diversification into home vacation rentals, sneaking into Airbnb’s domain.
But Airbnb is making strives to differentiate further.
The recent hire of former Apple design chief Jony Ive shows the company’s commitment to user experience.
We wait with interest to see how far the company will deviate from and/or enrich its’ roadmap laid out just two years ago.
Current, and perhaps future, lockdowns in the UK and Europe pose questions on the impact to Airbnb hosts and what Airbnb is going to do about it.
As is the case with many start-ups that have re-invented traditional business models and challenged the status quo, Airbnb had already been facing challenges by local governments and regulators on its’ short term rentals model and the impact to the housing market in Europe (the question of whether it is contributing to the housing shortage).
Now it faces further challenges as hosts are looking for more support to get through the crisis.
On one hand Airbnb wants to offer its customers flexible cancellation and refund policies, but on the other, individual hosts set their own policies to protect their businesses.
How much Airbnb will put aside to help hosts that are struggling is a question that remains to be answered.
Looking ahead to 2021 and with Airbnb’s much-anticipated float in December, we will witness a continuing trend of ‘staycation’ bookings, family bubble rentals and ‘half-tourists’ – those people looking to work remotely from a new location.