What Airbnb's IPO Means for the Future of the Company

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Since early 2017, the travel industry and beyond have been speculating about an Airbnb IPO. Years later, the start-up, which debuted in 2008 when Joe Gebbia and Brian Chesky rented out air mattresses in their San Francisco apartment, has officially gone public, with a market capitalization of some $101.6 billion. That’s more than Expedia Group and Marriott International combined, according to The New York Times.

“Today signifies that we’re no longer the alternative,” says Gebbia. “A lot of people used to say, ‘Oh, that’s the alternative booking platform.’ But we’ve become people’s first choice.”

So what does the IPO mean to Airbnb’s guests and hosts? Not much, if you ask Gebbia. “Being public will just allow us to keep investing in new features and capabilities for guests and hosts,” he says. “It’s not the beginning of anything, it’s not the end of anything, it’s just a milestone on a much longer journey.”

The last 10 months have been an unexpected journey for the company, which saw booked nights and experiences drop 72 percent in April compared to the same month in 2019 due to the pandemic, according to the prospectus Airbnb filed with the SEC. Since that nadir, homestay and experience bookings have steadied, and are about 20 percent below 2019 levels. The company pivoted relatively quickly, bringing Airbnb Experiences—a mix of cooking classes, city tours, events, and more which first launched in 2016—into the virtual space. The homepage was also reorganized to meet travelers needs, showing them options nearby that might be suitable for working from home or virtual learning. 

“I think that should give some assurance to hosts and guests—and investors, too—because Airbnb has shown that they’ve been able to make money even in these very unconventional times,” says Davide Proserpio, an assistant professor of marketing at University of Southern California who focuses on digital travel platforms like Airbnb. “But I don’t think [the IPO itself] should affect the guests or hosts in any way.”

University of Denver professor Karen Xie thinks the changes may be small—but could impact travelers and hosts in a positive way. For one, she says, the company will likely have to hold both guests and hosts to a higher standard when it comes to issues like neighborhood noise, partying, and safety to build trust and transparency. Those issues are already priorities for Airbnb, which banned house parties and limited stays to no more than 16 guests in August and recently announced a ban on one-night reservations over New Year’s Eve.

As part of the IPO, Airbnb has also created the Host Endowment Fund—made up of 9.2 million shares of company stock—and an advisory board that will let hosts have further representation with the higher ups. The fund is set to provide financial support to host-led projects (influenced by board and feedback form other hosts) once it reaches $1 billion.

The company’s success is now even further tied to guests and hosts, Gebbia thinks. “We now get to let our community participate in a new way with Airbnb,” he says. “They travel, they host, and now they can be an investor in the company. We’ve always aspired for our community to participate in Airbnb in this way.”

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