Airbnb Inc. received a second infusion of cash with a $1 billion loan from institutional investors, the company announced on Wednesday (April 14).
The San Francisco-based online marketplace for lodging said the financing will ensure it can continue investing in the company and its hosts and guests in more than 220 countries amid the coronavirus pandemic.
Airbnb did not provide details about the terms of the deal and who provided the financing. The company did not immediately respond to a request for more information.
The Wall Street Journal reported that a source familiar with the transaction said the five-year loan comes with a 7.5 percent interest rate.
“I deeply appreciate the confidence and trust that so many have shown in our company even as every sector in travel is going through the storm of the pandemic,” said Brian Chesky, Airbnb’s CEO and co-founder, in a statement. “We know travel will return … All of the actions we have taken over the last several weeks assure that Airbnb will emerge from the storm of the pandemic even stronger, regardless of how long the storm lasts.”
This latest financing comes as Airbnb bookings in San Francisco, New York City, and Seattle fell by more than 50 percent compared to the week beginning Jan. 5, according to a report by CityLab.Com last week. During the same period, reservations slipped by more than 35 percent in Washington, D.C., and Chicago, the survey revealed.
Last week, Airbnb announced two California-based investors, Silver Lake and Sixth Street Partners, invested $1 billion in a combination of debt and equity securities. The new resources, they said, will support Airbnb’s ongoing work to invest over the long term in its community of hosts who share their homes and experiences, as well as the work to serve all stakeholders in the Airbnb community.
Earlier this month, Airbnb customers were seeking refunds. Guests told CNBC that instead of cash refunds, they had received travel credits and could not get refunds unless they could document the cancellations stemmed from travel restrictions or other acceptable cancellation requirements.
In response, an Airbnb spokesperson said it has implemented its “Extenuating Circumstances” policy to provide guests with full refunds or credit.