Few tech companies were rocked harder by the pandemic than Airbnb. In the spring of 2020, a crush of trip cancellations caused the company’s revenue to drop by 67 percent. By May, it had laid off a quarter of its employees. “The travel we knew is over,” CEO Brian Chesky said grimly at the time, “and it’s never coming back.”
Like many other companies, the fate of this company was dependent on how well Covid-19 is managed around the globe. The company’s success could be seen as an indicator of the world’s ability to manage Covid-19. There’s some good news in that regard: Airbnb announced on Thursday that it had seen its revenues rise by 300 percent over Q2 2020 and approximately 10 percent more than Q2 2019. Even with international restrictions, overall bookings have also returned to pre-pandemic levels. Other high-water marks were also attained by the surge in summer travel: Airbnb had its most booked quarter ever, Saturday was the busiest night since the start of the pandemic, when more than 4,000,000 people stayed in Airbnbs all over the globe.
Chesky said that millions of people had been longing for travel after months spent at home. He was calling in from an Airbnb in Italy. We can now definitively state that there is a travel rebound.”
The summer may have boosted travel back to its pre-pandemic levels, but the fall remains less certain, with the rise of the contagious delta variant. Airbnb sent a letter of expectations to its shareholders that the Delta variant would impact bookings and cancelations, and that this would make the second half more volatile and unpredictable than the first. However, it predicted that Q3 will bring the company’s “strongest quarter ever.”
Airbnb believes that even though travel might not be as easy in 2019 than it was in 2019, there will still be ways for people to make it happen. Despite the decline in international travel, people booked weekends trips within driving distance. Before the pandemic, most people visited a website for travel like Airbnb that had a fixed date and a specific location. Airbnb claims that 40% of their guests now use flexible dates and location search to book accommodation. This may be because many people are able to work remotely. Longer stays are becoming more popular. Airbnb reported in its Q1 earnings that 25% of bookings were for month-long stays. In 2019, however, this figure was only 14%. This trend is likely to continue throughout the summer as long as workers can access remote work.
Other companies operating in this sector have been buoyed by these behavior shifts and the summer of almost-normal travel. Turo, also known as “Airbnb” for cars, filed last week to become public. Vacasa is a platform that manages vacation rental properties. It will also be going public through SPAC. After a record low in the year of the pandemic, VC funding has rebounded for tourism and travel startups. Crunchbase data shows that investors invested $11.1 billion in 1,125 transactions within the sector in 2019, according to Crunchbase. Crunchbase data shows that this dropped to $4.8billion and 629 transactions in 2020. The situation is expected to rebound in 2021 with 346 deals completed and funding of $6.1 billion.
The travel rebound is not expected to last for long. The rosy outlook could be clouded by variants of the coronavirus, which continue to spread and have inspired new restrictions in some regions. Dave Stephenson (chief financial officer at Airbnb) stated that bookings would be lower in Q3 than Q2. While summer travel tends to slow down at this time of the year, rising coronavirus cases have changed many people’s travel plans. Already, companies like Southwest Airlines are walking back more optimistic forecasts from earlier in the summer.
Airbnb’s shareholder letter noted that the company could be affected by “vaccination progress”, the containment of new varieties, and travel restrictions. Airbnb learned one lesson from last year: It was to be more efficient. This quarter it saw a decrease in its losses of $68 million compared with $576 million. These lessons may prove useful if the road is even more difficult.
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Publited Fri, 13 August 2021 at 21:03:22 +0000