Analytical review of AIRBNB

Opinion by the editor; Arsim. Ajeti

13 years ago, former roommates coined the idea of renting one of the rooms where they priory leased themselves!? as a way to realize income from any interested, on a budget (as they were) as often, they couldn’t afford to pay for hotels!

But with a great desire to travel, two friends Brian Chesky and Joe Gebbia initiated and realized, the craziest idea, (not many heard of ten years ago)  today we know it all as,

• AIRBNB

The company, widely known worldwide, has a great usability in Kosovo too, as a unique opportunity to offer free space for a short stay.

But how it all started, and where it all stands today;

Airbnb, established in 2008, and hereafter known as the company that operates exclusively ‘online’ the procedure done, only through application, providing the user guidance, mandatory registration, and payment which is guaranteed by the company in case of any eventual dispute between the parties.

According to the WSJ, today Airbnb’s market capitalization estimated to be circa  $ 100 billion

But let’s go back to 2011, at  ‘South by Southwest’ the tech conference, where Airbnb won the ‘application of the year’ award, that was seen as a real catalyst that catapulted Airbnb to the pedestal of world tourism industry, rivaling global giant, the likes of  Booking.com

Airbnb ferociously continued market penetration into the Europe and Asia, expanding their offerings on villas, luxury homes, seaside resorts over the years, until the pandemic outbreak, as business plummets.

Despite the unfavorable situation in the market, the founders of Airbnb decided to announce the company as a public offering company, for the first time in the market (known as IPO offering ‘NASDAQ’) during the pandemic, on 10th of December. 20, with starting price of $ 136 per share, and despite the fluctuations in the market, Airbnb manages within days, after entering the stock market,

to a record price of $ 221 per share, a 41% increase from the initial price.

However, nothing emerges above the market sentiment, and the current isolation with sharp decline of global tourism affected the Airbnb shares, that were volatile throughout the year, reaching a maximum of $ 219.94 on February 14th  and falling below the first day price to $ 134, but closing the year with a 19.4% increase.

This is understandable, as travel industry, is heavily influenced by the current situation, and Airbnb shares begin to appreciate in the market, when virus cases decrease and vice versa.

But what do the Financial Statements tell us? here Ben and I, after a detailed review found interesting stats;

In the 3 and 4Q revenues increased by 56% from the previous year, a record $ 2.2 billion, year to year end, while the number of bookings increased by 48%.

This is impressive, given that most of the world was closed at the time.

Moreover, over 40% of the reserved locations, were in a non-urban locations, which means new trend is emerging, as tourist preferred, pristine mountainous locations, and here Airbnb offers majority of location (as  chain of hotels are missing here)

As a result, rural reservations increase by more than 52%

Additionally, BLOOMBERG indicates that there were a total of 79.7$ million bookings through the Airbnb app on a Q3 alone (an increase of 29% )

–           Overall, Airbnb revenues records an annual increase of 834$ million (+ 260%)

Nonetheless, the most Impressive statistics I found is;

–           Long stay (over 21 days)- the category with the fastest growth, main indicator of the latest trend ‘work from home’ as people started to adapt to conduct the work, from the comfort of their home, and they are combining the trend by increasing demand of ‘remote working’ or travel & work at the same time, and just recently Airbnb’s CEO Brian Chesky announced his traveling plans through a tweet, saying that he’ll be “living on Airbnb” staying in different locations for the next few months!

–      Meanwhile, the Airbnb app has recently undergone a series of upgrades, adding new features, to make an app, even more attractive & user friendly.

Conclusion

Airbnb is an innovative company and considered by many market experts as an A + company,  but as long as the situation in terms of pandemic, stabilizes and the season opens for the world to feel safe to travel again, Airbnb will certainly be prone to fluctuations in the stock market, but nothing lasts forever, the latest from WHO-is that ‘Omicron variant’ is considered mild, in terms of virulence, and possibly the last variant, until then, Airbnb together with its shareholders, are looking forward towards the restart of the tourism, with an eye of a spring break as a testing grounds, and safe return to a new booking trend and traveling around the world.