What's next for Airbnb after IPO in pandemic?

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Home-sharing tech company Airbnb launched its initial public offering on Wednesday.

Airbnb allows millions of ordinary people around the world to rent out their properties or even their own homes, but in the middle of a pandemic, is this business model sustainable?

"When you look at their overall valuation, it’s very high. If you are looking to invest in this, you’re believing that the future is going to favor Airbnb... in the rebound more so than the standard regular hotel travel industry," said Tim Bajarin, president of Creative Strategies.

Symon He, co-author of "Airbnb For Dummies" advises Airbnb hosts on how to position their properties.

"I had a host client who had 12 listings in Paris. They were looking at a banner year for 2020 and then all of a sudden, their bookings dropped by 95%. They had near 100% cancellations," He said.

He says even though Airbnb bookings dropped by 80-95% in the early days of the COVID-19 pandemic, he’s still bullish on Airbnb’s flexible business model.

When no one was traveling, He says Airbnb immediately created Airbnb Experiences – a new revenue stream that included online experiences ranging from tarot card reading to cooking lessons.

He says Airbnb’s business already started rebounding in the summer because it allowed people to travel to places outside of crowded city centers where hotels are in short supply.

"As more and more employers are offering maybe extending work from home, sometimes indefinitely their policies for their workers, people are wanting places where they can work for weeks at a time. That’s just something that’s not very practical to do with hotel rooms compared with short-term rental properties," He said.

Even though some hosts have dropped out of the market, He says there’s no better time to be an Airbnb host than right now.

He points out that in a time of economic insecurity, more people are going to be looking for ways to generate a side income. So, by following enhanced safety protocols and getting property listings in order now, a potential host could move ahead of the pack.

"There’s a lot of pent-up demand right now for travel. People have been stuck in their homes for almost a year," He said. "I have two friends about to delay their honeymoon a second or third time during the pandemic. When the vaccine is widely distributed, people feel safe to travel again, that demand is going to be unleashed."

He believes that demand may be so high that bookings in the second half of next year may even exceed those prior to the outbreak of the pandemic.

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