Airbnb reveals substantial losses ahead of $30bn IPO

Airbnb revealed that it has lost more than $1.7bn (£1.3bn) over the last three years as it filed for the most anticipated US stock market float of the year, but said its holiday booking business had bounced back strongly since the early months of the pandemic.

The travel company, which could be worth more than $30bn (£23bn) when it goes public in the coming weeks,  published an investor prospectus revealing its finances for the first time on Monday.

It showed the company losing $696.9m in the first nine months of this year, and $674.3m in 2019, although it made a profit in the three months between July and September, the period when it is typically busiest.

Airbnb had planned to go public earlier in the year but was thrown into crisis by coronavirus, which saw tourism grind to a near-halt. It was forced to take $2bn in funding to shore up its finances and cut one in four jobs.

The company’s filing said that in the first nine months of 2020, revenues had dropped to $2.5bn, down 32pc on the same period a year earlier. 

Airbnb revenues bounce back

Sales in the second quarter of the year plummeted by more than 70pc year-on-year as travel froze to a halt but were down just 19pc in the third quarter as lockdowns lifted. However, the company predicted that new waves of virus infections would mean a sharper drop once again in the final months of the year.

Airbnb does not own the millions of properties on its service but relies on around 4m landlords, taking a fee of 3pc from hosts and 14.2pc from guests on bookings. The company has expanded into other areas such as experiences, in which users pay for wine tours, yoga classes and comedy nights.

Its prospectus showed that before the pandemic, it had been growing steadily, with sales climbing by a third in 2019 to $4.8bn. It remained lossmaking due to heavy spending on marketing and product development.

Despite a drop in revenues in 2020, it said it was well placed to emerge from the pandemic in a better place than rivals, benefiting more from local travel and people seeking new locations to work remotely.

“We believe that the lines between travel and living are blurring, and the global pandemic has accelerated the ability to live anywhere,” the company said.