Airbnb sinks to a first ever loss as public company

Photo: AP Brian Chesky

The popular home-sharing site Airbnb announced massive losses for the last quarter of 2020 driven by the pandemic slowdown, AP reported. Figures show that Airbnb has lost a total of $3.9 billion for the period. The negative result is the first ever since Airbnb became a public entity last year.

In the results the company noted it took a charge of $2.8 billion for stock compensation related to the IPO. A year earlier, Airbnb lost $352 million.

Revenue dipped 22% to $859 million in the fourth quarter. That was still more than analysts expected. Airbnb refused to issue a forecast for 2021 profit and revenue. However, firm's officials have expressed hopes for robust recovery, but still they were cautious amid unknown speed of vaccinations in different countries and uncertainty about the will of people to start traveling again.

In late January, Airbnb said a survey showed that just over half of Americans have already booked a trip or plan to travel this year. Since the start of the pandemic, Airbnb has shifted its focus to beach towns and mountain destinations - outdoorsy places where the risk of contracting the coronavirus is perceived to be lower. The company expects rentals in big cities to come back last. It has also slashed costs and jobs to ride out the pandemic, much like airlines and others in the travel industry.

CEO Brian Chesky said his company will benefit from changes in travel and jobs as many people work from somewhere other than the office - maybe a rental far from home. “When travel comes back, we believe it will look different than before,” Chesky said on a call with analysts. “People are living more nomadically. Some people are taking longer-term stays, one or two months at a time in Airbnb.”

For all of 2020, Airbnb lost nearly $4.6 billion including the charge for stock-based compensation and a separate charge of $827 million for stock warrants tied to a loan. That compared with a 2019 loss of $674 million. Even as revenue increased, the company also lost money in 2017 and 2018 as it spent heavily on marketing and technology and added new lines to the business.

Airbnb faces challenges, including opposition from hotels. Some cities have stepped up restrictions on short-term rentals. Critics say Airbnb contributes to higher rents and home prices in some markets. Some of the company’s hosts aren’t just sharing their homes, they are turning them into businesses catering to tourists, reducing the supply of housing for local residents, according to some researchers.

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