Airbnb went public on Thursday at $146 per share, 114% higher than its $68 IPO price, giving the company a $101 billion valuation at the time of its debut.
Just nine months earlier, in the thick of the COVID-19 pandemic, the company’s valuation was $18 billion and it was in such dire straits it laid off 25% of its employees.
“It’s surreal,” Airbnb cofounder and chief strategy officer Nate Blecharczyk said on Yahoo Finance Live on Thursday in an interview before the stock began trading. “We never expected, back in the spring, that we’d be ending the year this way. I think this year has highlighted the adaptability of the model. People have stopped flying and going very far, but people have a fundamental need to connect and, I think, a desire to travel.”
The first half of 2020 was brutal for Airbnb, with most people staying in their homes. Its second-quarter revenue fell 67%. Grocery delivery, e-commerce and curbside pickup, Peloton bike orders, and Logitech computer accessory sales surged.
No one was traveling.
But by July, Airbnb bookings suddenly returned to their July 2019 levels. People were booking stays again, but different types of stays: drivable distances (within 300 miles) from where they live, and longer stays than in the past, beyond the weekend, since people could work from anywhere. In the third quarter, Airbnb booked a profit of $219.3 million, thanks in part to dramatic spending cuts.
Now Blecharczyk makes the case that the rebound shows the company is well-suited to cater to whatever the next travel trend is, whether people continue to stay close to home or start flying again once they’ve received a COVID-19 vaccine.
“I do think at some point folks will get back on airplanes, but whether they’re staying near, or going far, Airbnb will be there for them,” he says. “This work from home trend, I think that will linger. Because of Zoom, not everybody has to go into the office five days a week. What I think that allows for is folks taking long weekend trips more frequently. They might get on airplanes to do so, they might be traveling nearby to do so.”
The customer trends Airbnb has seen also help it make the case that, in a post-pandemic America, if people are still shaky about the virus and social distancing, Airbnb has an appeal over hotels: privacy.
“Folks are very conscious about health safety,” Blecharczyk says. “So there’s a hesitancy about being around other people. They don’t necessarily want to be in a hotel lobby or restaurant, they’re cautious. So we see people opting to have an entire home to themselves right now, and being able to cook their own food in a kitchen.” (Hotel chains, during the pandemic, have sought to frame Airbnb as less able to guarantee cleanliness than hotels, since it’s the responsibility of individual homeowners.)
Amid the discussion of Airbnb’s pandemic rebound, and as shares soar, critics may point out that in hindsight, cutting 25% of the workforce was overly aggressive, since a return to pre-pandemic booking volume was right around the corner. And The Information reports that Airbnb canceled $616 million worth of unvested stock awards through the first nine months of 2020, mostly belonging to the 1,800 employees Airbnb cut in May.
Blecharczyk, asked by Yahoo Finance what he’d say to those 1,800 laid off employees amid the success of the IPO, says, “We made very clear during those layoffs—which were incredibly difficult for us—we always made clear that we would welcome them back when the opportunity arises... Hopefully some of them can come back.”
Daniel Roberts is an editor-at-large at Yahoo Finance and closely covers tech. Follow him on Twitter at @readDanwrite.
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