How the Covid-19 crisis locked Airbnb out of its
own homes
The short-let platform’s business model has been
exposed. Bookings have fallen off a cliff but Airbnb simply can’t change tack
Rupert
Neate Wealth correspondent
@RupertNeate
Sat 4 Apr
2020 08.00 BSTLast modified on Sat 4 Apr 2020 12.14 BST
‘Airbnb is
in the worst of a worst situation,’ says one pundit. It can’t make money during
the pandemic and it can’t diversify.
“You would
not have an empire without us,” an Airbnb host shouts down the lens in a video
addressing the company’s billionaire co-founder and chief executive Brian
Chesky. “It’s our homes on your platform. It’s our face on millions of
listings. It’s our soul that brings the magic … It’s our place that makes you
money.”
internet
refuse sifter
@weeaboo
lol airbnb
landlords are losing their minds because people canceled their trips due to the
uh. global pandemic
Embedded
video
130K
4:42 AM -
Mar 22, 2020
Twitter Ads
info and privacy
20.4K
people are talking about this
The man in
the video is pulsating with anger at Airbnb’s decision to allow guests to
cancel bookings for trips starting before 31 May with a full refund due to the
coronavirus outbreak. The anger is so raw many commentators have dismissed it
as a parody, and the Guardian was unable to confirm its authenticity.
But
Airbnb’s army of 700,000 hosts are distraught at the income they are losing as
a result of the company’s generosity to guests. Chesky this week apologised and
said the company would spend $250m (£200m) covering 25% of what hosts would
have been paid for reservations between 14 March and 31 May.
An
additional $10m relief fund is being made available to “super hosts” offering
grants of up to $5,000 for “hosts who hurt the most”. Airbnb founders will also
take no salary for six months, and top executives will have their salaries
halved.
“Although
it may not have felt like it, we are partners,” Chesky said in email to hosts.
“When your business suffers, our business suffers. We know that right now many
of you are struggling, and what you need are actions from us to help, not just
words.”
Airbnb has
built up reported cash reserves of $3bn from booking fees charged to both
guests and hosts. It collected revenues from the fees in excess of $4.8bn last
year, according to Reuters. Hosts are charged 3% of every booking, while guests
are charged up to 14.2%.
The
hangover from the coronavirus pandemic is likely to last far longer than 31 May
or whenever governments lift movement restrictions. Hosts report empty booking
calendars stretching throughout the summer, and research by analysis website
AirDNA shows bookings in some cities has fallen by as much as 96%.
For hosts
who occasionally rent out their spare room in the style of a real bed &
breakfast the lost Airbnb income due the coronavirus is a frustration.
But, for
those who have built up mini (or in some cases not-so-mini) property portfolios
that rely on a constant stream of guests churning through Airbnb apartments in
Bath, Barcelona or Berlin, the prospect of weeks or months without guests
spells financial disaster.
It is also
a disaster for Chesky, 38, and the large number of Airbnb’s employees who hold
stock options. The company was lining up for a stock market flotation this
year, which some investors hoped would value the 11-year-old tech giant at up
to $42bn – even though the Wall Street Journal reported the business lost
nearly $320m in just the first nine months of last year.
In a video
presentation on Thursday, Chesky told staff the company had lowered its
valuation to $26bn, down from $31bn when it last raised money from investors in
September 2017, according to the Financial Times.
Airbnb
employees have long been pushing executives to press ahead with an initial
public offering (IPO) because stock options granted to seasoned staff start to
expire in November 2020. Those shares could be worthless if the platform is not
trading on the public market.
“They are
stuffed, the IPO just can’t happen,” Richard Holway, chairman of analyst firm
TechMarketView, said. “Airbnb is in the worst of the worst situations. Unlike
other tech firms, like Uber which can do deliveries instead of driving people,
it can’t diversify. There’s nothing Airbnb can do to make money.
“Everything
indicates that Airbnb income around the world has just stopped,” he said. “It
[coronavirus and lockdown] has exposed the Airbnb business model, and it’s
going to pull thousands and thousands of people down with it. People [hosts]
have gone into it as an absolute business and they’re in a very, very difficult
situation.”
To try and
make some income from their empty properties landlords have flooded the rental
market with their Airbnb flats. On Edinburgh’s Princes Street, for example, there
are 209 Airbnb listings on a road of just 494 homes. Property portal Rightmove
said the number of new rentals coming on to the market in the week the UK
lockdown started increased by 45% in London, up 55% in Brighton, 62% in
Edinburgh and 78% in Bath. It’s a similar story the world over with a 61%
increase in Dublin and 41% in Prague.
Holway said
many hosts are reliant on Airbnb income to pay mortgages on not one but several
properties, while others “rent flats off commercial landlords and then seek to
make a profit renting it out on short lets on Airbnb – that’s not going to
happen now”.
Sheffield
based entrepreneur Alex Milburn claims to have made “£1,000,000 in Airbnb sales
in 12 months” and now markets his “rent to rent” strategy in one-day seminars
costing £997 (plus VAT). He promises, in YouTube videos, he can teach others
how to make six figure sums “with very little or none of your own money”.
One Airbnb
host rented out 881 properties in London in a single year making revenue of
£11.9m, according to AirDNA. The unnamed person was said to be highest-earning
Airbnb landlord in the world in 2017.
Sem comentários:
Enviar um comentário