Airbnb
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About ABNB
Airbnb, Inc. operates a global platform for stays and experiences. The Company’s marketplace model connects hosts and guests online or through mobile devices to book spaces and experiences around the world. It built its platform to onboard new hosts, especially those who previously had not considered hosting. It partners with hosts throughout the process of setting up their listing and provides them with a suite of tools to manage their listings, including scheduling, merchandising, integrated payments, community support, host protection, pricing guidance, and feedback from reviews. Its Website and mobile applications provide its guests with a way to explore a variety of homes and experiences and an easy way to book them. Its technology platform powers its two-sided marketplace and enables its global network of hosts and guests. The Company owns a trademark portfolio with protection in 170 countries in which it operates for its primary brands, AIRBNB, and its Belo logo.
$84.34B
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0.00%
1.43M
$136.27
$134.24
$134.24
$170.10
$110.38
What is Airbnb (ABNB)?
Airbnb is the Uber of homes. Although it started out before Uber.
A trailblazer of the sharing economy, Airbnb disrupted the travel industry by helping property owners open their homes or spare rooms to travellers in exchange for a fee.
Until Airbnb came along in 2008, travellers could only book accommodation away from home in the form of a hotel, hostel or bed and breakfast.
This American online marketplace operator uses technology to connect travellers looking for accommodation somewhere ("guests") with people in that area willing to rent out their properties to them ("hosts").
Current CEO Brian Chesky and CPO Joe Gebbia came up with the idea when they moved to San Francisco in 2007 as roommates.
After arriving, they jokingly placed an air bed on the floor to transform their home into a bed and breakfast. From there they coined the name “AirBed and Breakfast” which eventually became Airbnb.
How does Airbnb earn money?
Airbnb’s business model is simple. It leverages the sharing economy by making money from property it doesn’t own.
Hosts list their personal homes and/or property on Airbnb’s website at no cost; there are no sign-up or subscription fees. Guests find somewhere to stay, book and pay for their accommodation via Airbnb’s website or mobile app.
Airbnb earns revenue by charging service fees to guests and earns commissions from their hosts.
How big is Airbnb?
As of the end of FY2021, Airbnb has grown to 4 million hosts and has welcomed over 1 billion guest arrivals. Airbnb’s hosts operate in over 100,000 cities with more than 6 million listings in cities and towns, all over the world.
85% of Airbnb’s hosts are located outside of the U.S.
Is Airbnb profitable?
Yes, Airbnb has positive operating income but by their own admission, Airbnb has “incurred net losses in each year since inception, and we may not be able to achieve or sustain profitability.”
Airbnb incurred net losses of US$674.3m in FY2019, US$4.6b in FY2020 and $352m in FY2021. As of 31 December 2021, Airbnb has accumulated a deficit of $6.4 billion.
Airbnb has cited slowing revenue growth as a real risk to their business. As a long-term growth strategy, Airbnb is seeking to attract more hosts globally, grow the guest community and further invest in their brand.
Is ABNB stock a good investment?
Some investors feel positive about the ABNB share price as revenue and operating income continues to trend upwards despite an income wobble in 2020 due to Covid-19.
However, Airbnb themselves have admitted to shareholders that “our revenue growth rate has slowed over time, and we expect it to continue to slow in the future.”
Recent geopolitical tensions, macroeconomic factors and the possible resurgence of Covid have also dampened Airbnb’s stock price by over 20% since November 2021. ABNB has dropped from a 52-week high of over US$215 down to a bit over US$155.
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This is not financial product advice nor a recommendation to invest in the securities listed. Past performance is not a reliable indicator of future performance. As always, do your own research and consider seeking financial, legal and taxation advice before investing. No representation is made as to the timeliness, reliability, accuracy or completeness of the market data provided.
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