Well, if you got some pre-IPO stock then it means you just doubled your money, and then some.
Airbnb shares were initially scheduled to price between $44-$50 USD on IPO day but eventually went public at $68 per share. The home-sharing network sold 51,551,723 Class A shares which implies a market cap of $47 billion.
And then trading begun. A few hours after going public, the stock had reached $147 per share bringing the company’s valuation to over $100 Billion. That’s more than what Hilton, Marriot and Hyatt, the 3 largest hotel brands in the world, are worth COMBINED.
But what does this mean for the short term rental industry? What does this all mean for you, the host?
We will be seeing dozens of articles written in the next few weeks with this exact subject. Anyone’s guess is as good as the next, but there are a few things that are evident and a few that a bit more subtle. Here’s what we think this IPO’s success means:
The World is itching to travel
1 year in lockdown (more or less) is too much. People have put safety first, and rightly so, but everyone has his limits. As soon as the vaccines are out, people, especially travelers, are going to rush to get one so they can -at last- travel. Anywhere! Our predictions show that 2021 will bring travel back to 60% of where it was in 2019, and 2022 might very well get us back on track.
Short Term Rentals will become the de facto accommodation option for travelers.
Throughout 2020 all research has shown the resilience of the STR market compared to hotels. After a sharp drop in March and April, the rest of the year showed a slow but steady growth back to normality for vacation rentals, but -alas- not for hotels. Our own research and data show this very clearly – see booking statistics for USA and globally for 2020 compared to 2019. What the Airbnb IPO shows us is that the people that have even more information and data on their hands – institutional investors – believe this too.
The STR industry is about to get much bigger
Much, much bigger. First of all, most hotel chains are going to attempt a stint at this market. If not as a complete pivot, at least as a safety net in case hotels continue to sink during 2021 and 2022. New players will emerge, new startups are going to invent new ways of hosting, renting, and everything in between. Existing players like Vrbo, Tripadvisor, Agoda and Houfy are going to get large cash injections to compete with Airbnb. The STR market is indisputably going to surpass the hotel industry in the next few years. No doubt about it. And that’s a $570Bn market we’re looking at.
Hosts all over the world should prepare for what’s ahead.
Oh, The Times They Are a-Changin’. Are you going to follow or stay behind? New tools, new services, new ideas, new rules, new expectations. Adapt or die. We’ve written a lot of articles on our blog on this subject, and we’ll continue to write them to help you improve your position in the market, improve your product, and eventually grow and prosper. For now, just make sure you’re listed on at least 4 channels and are using tools like our multi-calendar and team management to optimise your daily operations.