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Airbnb, which is reportedly seeking a significantly higher valuation than initially anticipated for its preliminary public providing (IPO), wrote in a latest submitting that the corporate has solely captured a tiny piece of what it sees as a $3.four trillion complete addressable market.
“We imagine that the COVID-19 pandemic bolstered that journey is a permanent human want, even within the face of challenges,” the corporate wrote in its S-1 filing with the U.S. Securities and Trade Fee. “Folks have more and more sought journey choices nearer to dwelling throughout COVID-19, and Airbnb’s choices are nicely suited to adapt to this altering dynamic.”
The Wall Road Journal cited unnamed sources Monday (Nov. 30) as saying Airbnb at present expects to see a $30 billion to $33 billion valuation on its upcoming IPO, up from an unique expectation of simply $30 billion.
The upper valuation comes whilst Airbnb continues to climate a world pandemic that’s slammed the journey enterprise. As an illustration, Airbnb mentioned in its S-1 that its revenues fell to $2.5 billion throughout 2020’s first 9 months, down from $3.7 billion in the identical 2019 interval.
Nonetheless, the corporate disclosed within the submitting that it sees the agency’s serviceable addressable market — a measure of complete potential enterprise in its present core areas — as $1.5 trillion. That features $1.2 trillion for short-term stays and $239 billion for experiences.
Airbnb added that its complete addressable market — a broader measure of all potential enterprise in present or future core areas — is a large $3.four trillion. That included $1.eight trillion for short-term stays, $210 billion for long-term stays and $1.four trillion for “experiences,” Airbnb’s COVID-era initiative to host paid on-line occasions like cooking courses or excursions of unique cities.
“Whereas the present journey market stays unpredictable, we imagine estimates made previous to the COVID-19 pandemic to be the perfect illustration of our long-term journey alternative,” Airbnb wrote.
The corporate added that though a second COVID-19 wave is hurting revenues, “there are a number of areas of our enterprise which have proven resilience, notably, home journey, short-distance journey, journey outdoors of our prime 20 cities and long-term stays.”
Airbnb additionally mentioned the worldwide financial downturn ought to assist it appeal to extra host properties for rental. Moreover, Airbnb mentioned it raised $2 billion of credit score via loans early on within the pandemic, and generated $520.1 million of free money in the course of the 12 months’s first 9 months.
Nonetheless, the agency mentioned it has loads of different challenges past COVID-19. As an illustration, the corporate famous that it has greater than a dozen main opponents, from giant journey websites like Reserving Holdings to Expedia Group to search engines like google and yahoo equivalent to Google and Baidu.
It additionally counts main lodge chains like Marriott and Wyndham as competitors, together with meta-search websites like Craigslist and Chinese language short-term rental corporations like Tujia and Meituan B&B.
However Airbnb argued in its submitting that it “we imagine we compete favorably based mostly on a number of elements, together with the differentiated breadth and depth of stays and experiences provided on Airbnb, our international scale and geographic attain, the energy and loyalty of our host and visitor group [and] our model.”
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