Airbnb is seemingly looking to change the narrative surrounding tech listings as the home-sharing company has posted a series of updates in the past few months, many of which are focused on how big-hearted the company is. However, the company will be a blockbuster listing this year because it makes money and not because it is nice.
Homeowners with Airbnb earn spare cash by renting out their rooms, while guests have somewhere more interesting to stay. The platform is easy-to-use with a system that ensures mutual feedback between renters and rentees, ultimately helping to keep things civil.
Airbnb is particularly unique for its cost-effectiveness, as the company has not raised any new cash for the past two years. Valued at $31bn at its latest funding round in 2017, Airbnb’s decision to go public is seemingly fuelled by the expiration of stock options given to early employees and not the need to raise fresh capital. Airbnb is reportedly considering a direct listing, which is a low key way of joining markets, with no new shares being sold but existing investors can sell their stock.
After a disappointing run of initial public offerings in 2019, Airbnb will come as a relief to investors. Airbnb has remained private for over a decade like many other tech start-ups. However, the company has reported steady growth in revenue generation, claiming profitability on an EBITDA basis — earnings before interest, taxes, depreciation, and amortization in 2017 and 2018.
Airbnb has continued to grow in popularity as a brand, with users referring to the places they stay as “Airbnbs.” However, the company has continued to emphasize that it is just a platform and is not responsible for the quality of listings, or for jobs like collecting occupancy taxes or even ensuring rooms comply with local regulations.
The company is looking to modify its mode of operation, with continuing fights with city officials and reports of scam listings making it imperative to verify all of its listings. However, this might lead to higher costs, with Airbnb listing 7m properties against the 1.4m rooms of Marriott International, the world’s largest hotel chain.
Airbnb must also deal with the spread of the Nobel coronavirus, which will affect the global tourism industry.
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