Airbnb Reconsiders IPO Plan While Hosts Beg for Guidance

Airbnb is reassessing its IPO plans. Filip Radwanski/SOPA Images/LightRocket via Getty Images

The novel coronavirus pandemic has been hell for just about every industry, and it has almost literally decimated the hotel business.

With hotel owners and chain executives staring at months of canceled bookings, close to 80 percent of full-time hotel workers in the U.S. have been sent home or laid off, according to one estimate. On Tuesday, executives with the American Hotel and Lodging Association asked President Donald Trump, who, as a hotelier, happens to be an association member, for a $150 billion bailout.

SEE ALSO: $2 Trillion Coronavirus Stimulus: How Much Money Will Individuals, Families Get?

Yet, the coronavirus may be worse for the ersatz hotel business. The near-halt of tourism and the hospitality economy is forcing a reckoning for both Airbnb and the many individuals worldwide who rely on the hotel alternative for income.

And in this Silicon Valley story, aside from taxpayers and munificent members of Congress, there aren’t any saviors—nor are there heroes (unless Airbnb hosts are willing to become quarantine-keepers for those who can’t self-isolate safely in their own homes).

Once an undisputed unicorn, valued at a kingly $31 billion after a 2017 funding round, Airbnb is facing “hundreds of millions of dollars” in losses due to the COVID-19 crisis, according to the Wall Street Journal. The company is currently reassessing its long-awaited plans for an IPO.

Last week, The Journal reported that Airbnb and the “devastating impact on its global business” has “thrown into disarray” the company’s path to going public. Instead, Airbnb will try to raise cash from venture capital to stay afloat during the coronavirus pandemic, with the hope that later this year—or next year, or whenever this all ends—things will return to normal.

The company has declined to comment, directing reporters to a September 2019 press release about its IPO information.

On March 17, Chris Lehane, Airbnb’s senior vice president for policy and communications, asked House Speaker Nancy Pelosi and Minority Leader Kevin McCarthy for a bailout package that would include tax credits and low-interest loans for hosts. It seems that the massive $2 trillion coronavirus stimulus package agreed upon by the White House and the Republican-controlled Senate earlier this week would allow “gig workers” to apply for unemployment benefits (though the package has yet to be approved by the House and then be signed into law by the president).

At least some Airbnb hosts are not happy about how the company has handled the crisis.

Due to the pandemic, Airbnb allowed would-be guests to cancel trips and receive full refunds under the company’s “extenuating circumstances policy,” the company announced on March 19. Normally, guests who book and then cancel still owe some money under their hosts’ cancellation policy. That rule still applies to bookings made after March 14, when everyone should expect the coronavirus impact, as well as for trips with check-in dates after April 14.

Unlike Uber and Lyft drivers, who have been granted some benefits normally extended to company employees like paid sick leave, it’s not immediately clear what Airbnb can, should, or will do for the platform’s hosts.

“Everything is gone. It just fell off the cliff overnight,” said Grace de Burca, a resident of Galway, a tourism-dependent (and very fun; do go there once this is over) city on the west coast of Ireland. In an interview with the Irish Times, de Burca said she rented an en-suite bedroom in her home and made, just by renting it out on weekends, about €1,000 ($1,102) a month.

According to that report, Irish hosts are leaving Airbnb and instead listing their properties for long-term lease-holders rather than short-term rentals. That could help alleviate housing shortages in critical supply-challenged markets; The effect of Airbnb further reducing housing supply and driving up rent prices in already stressed markets, like San Francisco and New Orleans (but really anywhere that’s desirable to live and visit), has been one core critique of the company.

But the coronavirus pandemic presents everyone with a conundrum: What if you cannot realistically isolate in your own home—what if you simply cannot quarantine without new accommodations? One host, Mary Calahan, told the Irish Times that she used WhatsApp to offer her normally Airbnb’d cottage to “people who had family coming home who might need to isolate. I had three people looking to take up the offer almost straight away.”

Asking individual Airbnb hosts to act as quarantine-keepers is an innovation that did not appear in Airbnb executive Lehane’s letter to Congress, but as hotels in San Francisco are rented out by the government to act as shelters for the homeless—so that they do not fall victim to the virus or infect others—there appears to be a grand opportunity, for both Airbnb hosts and public health, for their assets to be commandeered in this way.

As Calahan observed, “There are a lot of Airbnbs out there and they are all vacant, so maybe this is something other people could do, too?”

Airbnb Reconsiders IPO Plan While Hosts Beg for Guidance