Airbnb’s prospects in pandemic rest on near-home bookings

Bloomberg

Airbnb Inc’s long awaited filing for an initial public offering (IPO) makes the devastation wrought by Covid-19 abundantly clear, and shows how its business now hangs on domestic travel.
Since the coronavirus pandemic swept across the globe in March, closing borders and grounding flights, the travel sector’s woes have been on full display.
Public companies such as Marriott International, Booking Holdings and American Airlines Group grimly tallied tumbling revenue, mounting losses and mass furloughs and layoffs. Airbnb — as a private company — had largely stayed mum on the pandemic’s effect on its business. Until now.
Airbnb in its IPO prospectus filed with the US Securities and Exchange Commission highlighted its reliance on its guests continuing to travel — just
not as far as they did before the pandemic.
“Against an otherwise highly negative travel backdrop, there are several areas of our business that have shown resilience, notably, domestic travel, short-distance travel, travel outside of our top 20 cities, and long-term stays,” the company said in the filing.
“While we believe that travel will change as a result of Covid-19, the adaptability of our business suggests that we are well-positioned to serve this
dynamic market as it continues to evolve and recover.”
While Airbnb’s bookings nosedived in April, people quickly grew antsy under shelter-in-place rules and took advantage of remote-work policies by fleeing to vacation rentals within driving distance of their hometowns.
With the pandemic intensifying in the US and Europe and a vaccine still months away from wide distribution, few travellers are likely to need their passports anytime soon.
Yet, Airbnb believes it can rely on their wanderlust — a road trip is a road trip even if it’s just up the highway.
Short-distance stays, what Airbnb describes as a stay within 50 miles of where a guest lives, have shown extreme resilience, according to its filing. Bookings within a 500-mile radius of a guest’s home have started to recover, too, it said.
Globally, domestic nights and experiences — bookings for tourism activities — made up 77% of Airbnb’s overall bookings in September, compared with 52% in January.
“Domestic travel quickly rebounded on Airbnb around the world as millions of guests took trips closer to home,” it said.