T E C H N O L O G Y
22
20
Edited by
Joshua Brustein● The company’s ability to adapt
to Covid puts it ahead of rivals
and may have saved its IPODid Airbnb Win
The Pandemic?
Jeff Iloulian braced for his business to crash when
the Covid-19 pandemic set in this spring. Iloulian
runs HostGPO, a company that helps owners who
rent property through Airbnb and similar platforms
negotiate discounts on household products and fur-
nishings. His clients suddenly had so few guests in
lucrative urban markets that some hired movers
to haul furniture from downtown apartments to
nearby warehouses.
This would have been a disaster for HostGPO,
except that those same property managers were
doing big business in rural markets, and they
began hunting for real estate in places not known
as vacation hotbeds: Lake Arrowhead in addition
to Lake Tahoe, eastern Pennsylvania as well as the
Hamptons. “People are buying expensive furni-
ture in the Poconos right now,” says Iloulian. “The
demand moved around, it didn’t vanish.”
The shifting geography of Iloulian’s business
helped save his year. It also saved Airbnb, the
short-term rental platform that most of his cli-
ents rely on for many of their customers. Heading
into 2020, Airbnb was poised for one of the most
anticipated initial public offerings of the year—and
a validation for one of the buzziest tech startups
of the last decade. The coronavirus changed that.
While the pandemic has been terrible for Airbnb
in many respects, the company has done well com-
pared with airlines, hotel brands, cruise lines, and
most other parts of the global travel industry. Its
revenue fell 18% during the third quarter com-
pared with 2019. That was far better than Marriott
International Inc., which reported a 57% drop in
sales, and online travel agency Expedia Group Inc.,
whose revenue declined 58%.
In fact, the third quarter was Airbnb’s most
successful to date by some financial measures. To
some extent that’s a result of drastic spending cuts.The company fired 1,800 workers, about a quar-
ter of its total; canceled marketing efforts; and cur-
tailed plans to expand into new lines of business.
But its relative resilience in an historically bad year
for the travel industry is also a result of a flexible
business model that allowed the company to meet
customers in the places they wanted to go.
Airbnb filed to go public on Nov. 16 and is seek-
ing to raise $2.6 billion in an offering that could
value the company at almost $35 billion. That’s
up from a 2017 funding deal that valued Airbnb
at $31 billion—and a significant recovery from the
$18 billion valuation it drew in April when it raised
debt to help ride out the pandemic.
Investors will be evaluating a business that looks
much different than it did a year ago. Gross book-
ings in Airbnb’s top 20 cities fell by half in September
compared with the year before, while bookings out-
side those major markets was down 19%, the com-
pany said in its S-1 filing. International stays declinedBloomberg Businessweek December 7, 2020