What An Airbnb IPO Might Mean For Short Term Rentals

Ayvio Marketing

14 February 2020

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Going Public?

It’s no secret that Airbnb is looking to go public shortly. In a recent interview, the CEO and co-founder of Airbnb, Brian Chesky, stated that he was still looking to take the company public this year, although he couldn’t comment on when that would happen. Despite being a behemoth in the hospitality industry, Airbnb, as a company, lost $322 million in the first three quarters of last year. There is an expectation that this will have negative implications on their stock price once they do the IPO.

If you currently own an Airbnb property, or if you are thinking about buying one as an investment, here are three ways an Airbnb IPO might affect you.

 

Airbnb Could Receive Much-Needed Cash

In the interview, Brian Chesky was adamant that a need for cash was not driving the IPO. However, Airbnb is not entirely profitable either. Therefore, even if the cash need isn’t immediate, it is probably quite welcome.

The cash boost that Airbnb receives could help them dominate the hospitality industry. They are already the elephant in the room, dwarfing traditional hotel chains in terms of both value and customers. If Airbnb uses the funds raised by the IPO to re-invest appropriately, the company could see significant gains in a market it already has cornered.

 

Shareholders Will Want To See Profits

While Airbnb might be able to use the funds to boost its positioning within the market, shareholders will also want to see profits! Airbnb may have to re-think their pricing structure as there will be pressure on them to make money in addition to gaining market share. It’s possible, although by no means guaranteed, that people who rent Airbnbs could see the company taking more significant percentages. Fortunately, if that does happen, there is enough competition on other platforms (like Vrbo) to compensate for any pricing changes.

Best Practices

Airbnb Is Viable In Any Economy

Chesky was equally adamant about the fact that Airbnb is viable in any economy. When the outlook is bad, people look to Airbnb for cheaper alternatives to hotels. Conversely, when the market is excellent, people book Airbnbs for custom, unique experiences that are unobtainable through regular hotels! Therefore, Chesky didn’t see any issues with doing an IPO, even if the current tech bubble were to deflate a little bit.

Airbnb Is Here To Stay

While most people who have been following the company have been saying this, Airbnb is here to stay. Municipalities can regulate it and attempt to ban it, but that doesn’t change overall market demand. People love what Airbnb hosts have to offer. They love the ability to experience a city like a local and have better bang for the buck!

Ayvio, a hospitality company, works with partners all across the US to create unique, exciting experiences. We list properties on all the significant “bed and breakfast” sites, including Airbnb and Vrbo. We focus on creating world-class experiences that customers want to partake in again and again. If you are interested in having us transform and manage your rental property, please get in touch with us!

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