Summary

  • Crazy effect of the pandemic shows what V shaped recovery looks like and revenue resilience
  • Healthy marketplace dynamics shows growth on both demand and supply side
  • Pandemic could still dampen growth rates in the coming 2 years
  • Company poised to grow and do well over the next 10 years aligning with new trends and making improving lives of guests, hosts and communities
  • Business has resilient revenue and durability due to 2 sided marketplace and local and global network effects

Key Metrics

  • 4 million hosts
  • 220 countries and regions, 100,000 cities, 55% hosts are women
  • 110 million guests cumulative in 13 years
  • 110 billion host earnings total in 13 years

COVID Impact

  • Airbnb business declined significantly during COVID and rebounded after three months
  • During Mar, Apr, May 2020, Airbnb Gross Nights booked crashed 42%, 72% and 50% respectively YoY. After that it has stabilized at -20% YoY.
  • Even though international travel has been limited, domestic travel has rebounded showing resilience of the business
  • As COVID, blurred the lines between work and life, it also blurred the lines between travel and living. A new trend has started “work from Airbnb” or a “Workation” which is Work + Vacation

The below chart shows the crazy effect the pandemic had on Airbnb

Business and Strategy Commentary

  • Two sided market place with guests(demand) and hosts(supply)
  • Increase the supply of hosts

79% of the hosts coming to the platform organically to sign up in 2019

23% of the new hosts are converting from guests — this is a very healthy sign

  • Attract new guests onto the platform(Acquisitions) + Get the current guests to use the platform more (retention and resurrection)

91% of the traffic came to AirBnB from organic or direct channels meaning acquisition cost can be negligible. The platform has good content which is driving users there

69% of revenue was generated from repeat guests meaning guests who use the platform once like it and continue to come back showing the platform is healthy

  • These numbers really make the business likeable because there is low acquisition costs both on the supply and demand side. Hosts are getting economic benefits by monetizing assets, guests are getting choices to buy an wide array of experiences which is attracting both guests and hosts and making the marketplace stronger and stronger.
  • International Expansion will be a future driver for growth specially in countries where penetration is lower like India, China, LaTaM, SEA. Has both local and global network effects
  • Categories resilient to COVID

Domestic

Short distance stays — within 50 to 500 miles

Long term stays > 28 days

Travel outside the top 20 cities

  • Investing and developing the brand
  • Create new experienes

Financials

  • 2.5 bn revenue in 2017, 3.6 bn revenue in 2018, 4.8 bn in 2019
  • For the 9 months revenue comparison is 3.6 bn vs 2.5 bn in 2019 vs 2020
  • Net loss has been 70mn, 16mn, 674mn in 2017, 2018 and 2019
  • Cash in hand 4.5 billion

ex-Uber | Investment Banking | IIT