Published on : Friday, March 13, 2020
Airbnb was preparing to go public in 2020 and in the first two months of 2020 its bookings plunged in key cities like Beijing, Seoul, Rome and Milan.
Due to the increased, marketing spend but earnings before interest taxes, depreciation and amortization (EBIDTA) plunged 92.3 percent to a loss of $276.4 million.
In 2017 and 2018 Airbnb saw profits but the bottom line turned red in 2019 after it hiked marketing spend in preparation of a public debut this year.
There was a severe drop in bookings across Europe in the past two weeks of February as revelaed from analytics group Airdna.
Major conferences and festivals like Mobile World Congress in Barcelona, and South by Southwest in Austin, Texas has also hit Airbnb and the hosts who rent out their homes on its platform.
In March, Airdna projected year-on-year revenues for Airbnb hosts in Beijing would fall 43 per cent in China after noticing a 22 per cent decline in February.
China was Airbnb’s fastest-growing market just before the crisis.
Wang Peng, who manages 12 apartments and standalone homes in southern city of Guangzhou stated that they have not rented out a single apartment since the Chinese new year.
To enter apartment blocks passes were needed and they were unavailable to short-term renters.
Airbnb’s US market will also be hit by the wave of cancellations.
According to Kameron Bain, director of Strategy at Beyond Pricing, an Airbnb affiliate, said that specially in the last week a major decrease in total bookings worldwide was noted.There has been mass cancellation in urban centres like San Farncisco and Chicago as well as in London and Paris.