Airbnb Inc. took a record hit in revenues in the second quarter (Q2) and its losses continued to mount as global travel was restricted to prevent the spread of COVID-19.
Sources told Bloomberg News in advance of the release of Q2 earnings that the San Francisco-based online vacation rental marketplace’s revenue fell to $335 million in the period ending June 30. That’s a 67 percent drop from the more than $1 billion the company reported in Q2 last year.
The hospitality industry has been hit hard during the pandemic. Since mid-February hotels have lost more than $46 billion, occupancy rates are at less than 35 percent and 70 percent of hotel employees have been laid off or furloughed, according to the American Hotel and Lodging Association.
Airbnb has reported more than 80 percent of its bookings for short-term rentals for the first half of April were cancelled, costing the company more than $1 billion dollars.
To deal with the loss of revenue, Airbnb trimmed 25 percent of its 1,900 workforce in May.
There have been signs that the sector was beginning to rebound as the number of bookings were off 30 percent in June from a year earlier, compared with a 70 percent year-over-year decline in May. This week, The Wall Street Journal reported despite a 40 percent decrease in its valuation in three years, Airbnb Inc. is on track to go public in a move that would illustrate a recovery in the sinking homesharing sector.
Airbnb is planning to file its initial public offering (IPO) later this month with the Securities and Exchange Commission, and Morgan Stanley and Goldman Sachs Group Inc. have been hired to manage the IPO, sources told the newspaper.
Airbnb was recently valued at $18 billion, down from a 2017 valuation of $31 billion.
In July, CEO Brian Chesky told employees it could be the right time for Airbnb to go public as the marketplace has seen its bookings rebound after the COVID-19 disruption.
“When the market is ready, we will be ready,” Chesky wrote in an email to staff obtained by the WSJ. “We are collectively living through the most harrowing crisis of our lifetime, and as it began to unfold, global travel came to a standstill. Airbnb’s business has been hit hard, with revenue this year forecasted to be less than half of what we earned in 2019.”
Airbnb recently reported a surge in its rural vacation home rentals. In June, hosts in rural America earned over $200 million total, a 25 percent year-over-year increase, the company said.