Trends Shaping Airbnb

You must have all heard about Airbnb (ABNB) which is an online marketplace platform that connects travelers with hosts? Basically, it connects individuals looking for accommodation in specific locations with homeowners looking to rent out their homes.

Since its beginnings in 2007, the company has made fantastic progress. The original idea of Airbnb’s co-founders was offering paying guests to sleep on an air mattress in their living room. Today, the company has an impressive portfolio of over six million listings, covering more than 100,000 cities and towns in over 220 countries worldwide.

We will take a closer look at Airbnb and some of the emerging trends shaping the company as well as their potential impact on the company’s stock prices.

About Airbnb

Airbnb was founded in 2008 by Brian Chesky who is the current CEO, Nathan Blecharczyk, and Joe Gebbia. The company began in 2007 when they started renting air mattresses to conference visitors in their San Francisco home. The original name of the company was Airbed & Breakfast. 80 stays were booked via the company website in 2008, ahead of the Democratic National Convention.

The following year, in 2009, the brand Airbnb was introduced. The company expanded beyond air mattresses to include different type of property rentals such as spare rooms, apartments, and entire homes. By 2011, Airbnb had established an office in Germany. In 2013, it set up its European headquarters in Dublin, Ireland. San Francisco, California continues to serve as Airbnb’s main corporate headquarters.

As well as U.S. and Europe, the company has extended its presence into over 200 countries, including Australia, Asia, Cuba, and many more.  As well as its familiar earlier offerings, guests can choose alternative lodgings that stand out in a specific destination and its Experiences feature.

In 2015, Airbnb was named the official ‘alternative accommodation’ services supplier for the Rio 2016 Olympic Games. In 2020, the company launched Frontline Stays, a new program to allow hosts to share their homes with first responders during the pandemic. Airbnb went public in the same year, listing its common stock on the Nasdaq exchange.

Airbnb’s IPO

Airbnb went public in December 2020 in the middle of the pandemic. It was a period of great uncertainty for the travel industry, as COVID-19 created chaos for global tourism. The company went public at $68 per share and was valued at a massive $47 billion. On the first day of trading, Airbnb’s stock price increased to nearly double its IPO closing at $144.71. However, the pandemic hit the travel industry hard with travel restrictions, lockdowns, and a decline in tourism. In March 2021, Airbnb’s business plunged which saw a drop in its stock price, hitting a low of around $121.

Airbnb competitors

Competitors of Airbnb include Agoda, Booking.com, Expedia, Google, Hopper, Tripadvisor, Trivago, and VRBO (Vacation Rentals by Owner). VRBO offers similar solutions to Airbnb by providing private accommodation. Others operate as online travel agencies that help travellers find hotels and alternative accommodation options in the area they are visiting.

Remote work stays

Due to the pandemic, more and more people are choosing a technology-enabled lifestyle that is less dependent on a specific location. This means they can travel and work remotely. These people are known as digital nomads. As digital nomads are not restricted by traditional office environments, they look for long-term stays in different locations and often use Airbnb’s platform to find suitable accommodations. The rise of remote work has resulted in an increase in demand for long-term stays. This provides an opportunity for Airbnb to tap into a growing market segment. By taking advantage of this trend, Airbnb can potentially generate additional revenue, which may have a positive impact on Airbnb’s stock prices.

Airbnb Experiences

Travellers are making unique stays and experiences a priority over traditional sightseeing. With a wide range of Experiences offerings, Airbnb is in a good strategic position to meet this demand. By partnering with local hosts and experts, it provides travellers with authentic and personalised experiences. These range from cooking classes to guided tours. As this form of travel becomes more popular, Airbnb’s ability to expand its Experiences offering will contribute positively to the reputation of the company and its stock prices.

Sustainability and conscious travel

An important focus for many travellers is environmental sustainability. One of the main ways that Airbnb is making their services more sustainable is by listing eco-friendly properties on their platform. With its “Green Results” program, eco-friendly properties are highlighted on the company’s website, and hosts are encouraged to adopt sustainable practices and technologies. By promoting these properties, Airbnb reduces the environmental impact of their services as well as providing people with more sustainable and eco-friendly options to choose from. This commitment to sustainability could attract socially responsible investors and have a positive influence on the company’s stock prices.

Airbnb’s revenue will reach $10.3 billion

Airbnb has faced challenges amidst rapid growth, particularly with the start of the pandemic. To survive, the company improved its efficiency by focusing on key areas like hosting, stays, and experiences while it closed non-core divisions.

According to industry experts, Airbnb’s revenue will reach $10.3 billion in 2023, a big increase from $4.7 billion in 2020. This growth is mainly due to the company’s expansion into new markets and the increasing popularity of short-term vacation rentals.

Airbnb is expected to have 800 million guest arrivals in 2023, an increase of 500 million in 2020. This growth is driven by the growing demand for alternative accommodations and the company’s continuous expansion into new markets.

Investors should closely monitor the company’s response to emerging travel trends, its ability to maintain a strong network of hosts, and its strategies to stay ahead in a competitive landscape. As with any investment, it is important to carry out thorough analysis, and carefully consider the risk factors and market conditions. This is essential before making any financial decisions related to Airbnb stock.

Disclaimer:
This information is not considered as investment advice or an investment recommendation, but instead a marketing communication. IronFX is not responsible for any data or information provided by third parties referenced, or hyperlinked, in this communication.