Airbnb is going public by the end of the year despite a third quarter revenue drop of 18%. The drop is much less than that of its peers in the travel and leisure industry. It had a 72% revenue drop in the second quarter. This led to 25% layoffs and $2 billion in high interest debt. These tough measures brought some relief in the third quarter and the company is bouncing back.
Customers changed the way they traveled due to the pandemic. “They decided to get in their cars and travel close to home, often staying in small towns and rural communities,” Airbnb’s founder wrote in their letter to prospective shareholders in the filing. “Our business rebounded faster than anyone expected, and it showed that as the world changes, our model is able to adapt.”
The fourth quarter could be devastating for the travel and leisure industry as the pandemic is spreading by leaps and bounds. Infectious diseases experts are advising people to avoid large gatherings as the holidays approach.
Airbnb has not hidden this risk. It said in the risk section, “The COVID-19 pandemic and the impact of actions to mitigate the COVID-19 pandemic have materially adversely impacted and will continue to materially adversely impact our business, results of operations, and financial condition.”
However, the company also says, “Airbnb’s offerings are well suited to adapt to the changing dynamic.”