Airbnb prepares for surge in travel — analysts choose Airbnb as top reopening play
Pack your bags and get ready for a travel rebound. One company, Airbnb, is packed for a lifetime of traveling.
- $3.4b in sales for 2020 — down only 30% from 2019
- $4.6b in net loss for 2020 — compared to $674m in 2019
The only travel company resilient to COVID
The hotel killer and home rental company — Airbnb had a roller coaster of a year.
COVID shutdowns jeopardized Airbnb’s business. Forcing it to lay off 25% of its employees and to raise emergency funding at a valuation of $18b — half of what it was worth in 2017.
Nearly a year later, Airbnb had a record IPO and its stock had surged over 165% since it went public. But not all travel companies were this lucky…
The pivot that saved Airbnb
In the summer of 2020, Edison Trends’ data showed that online bookings at Airbnb were higher than the 3 largest hotel chains. For the pandemic cautious traveler, Airbnb’s got many advantages over hotels — Lower cost, less crowded spaces and fewer human interactions.
Unlike traditional hotels, Airbnb was able to shift its business strategy towards focusing on local stays:
- Shifted its algorithms to show local stays on its homepage.
- In August, Nearly half its bookings were stays within 300miles of the guests’ location.
The strategy change had paid off and one thing is clear — Airbnb had survived the pandemic.
For investors… Fast forward to the future
Here’s what analysts are expecting for Airbnb:
- Monthly bookings to double in April as a result of pent-up travel demand — as per CFRA analyst Angela Zino.
- Airbnb will be the first booking company to return to growth ahead of companies like Expedia and Bookings.com — as per BTIG analyst Jake fuller.
Vaccines are forecasted to be widely distributed in the US and Europe by Summer 2021 — which could widely open the travel industry up.
Despite recording a loss that was nearly 10x more than in the previous year and sales that dropped 30%, Airbnb’s stock had shot up 13%. Why?
- Investors are anticipating a strong rebound in travel that could send Airbnb’s sales up in 2021.
- Sales were higher and losses were lower than expected.
For investors looking to make a recovery play, a booking on Airbnb’s stock could be the way to go.