As Airbnb plots its move to go public in 2020, the head of its Experiences unit is stepping aside.
Joe Zadeh, an early Airbnb employee who has been running the Experiences business since it debuted three years ago, will relinquish the post pending the appointment of a successor, Airbnb confirmed. The Information originally reported the leadership change Tuesday night.
“We are designing the policies and procedures that will help ensure we are a 21st century company that balances the interests of all stakeholders,” Airbnb stated after word broke of the executive change. “To do this work, we need a leader who will ensure our mission and values are built into everything we do. Joe has been here since the beginning, and there is no one better suited to take on this task.”
Airbnb launched Experiences in 2016. The company now fields more than 40,000 such activities in more than 1,000 cities around the world, and they are geared to provide unique outings to guests or locals. Experiences range from a tour of Hasidic Brooklyn in New York to a Mezcal tasting in Mexico City, for example.
The company’s Experiences business, which reportedly racked up substantial losses in its early days, still isn’t profitable, but Airbnb sees a clear path to profitability for the unit, according to a source.
As Airbnb’s overall business matures, there are signs that the growth rate of its short-term rental business could be slowing. It would be important to show investors in the run-up to a direct listing or initial public offering that the company can diversify, become a more well-rounded online travel agency, and grow.
If there are problems in scaling its Experiences business while Airbnb is in the early stages of ramping up its nascent hotel business and considering expanding into flights, then that would sully a growth narrative for potential investors.
The Information reported that Airbnb generated some $18 million from Experiences in the first nine months of 2018, which wouldn’t be materially important to the privately held company’s financials. Airbnb said it generated more than $1 billion in revenue in the second quarter of 2019, but it’s unclear what the growth trajectory was.
Some would consider Zadeh’s departure from the Experiences post to be somewhat abrupt in that the company has not named a successor. His transition was apparently announced internally several weeks ago, and he has already begun to work on new projects. Adding fuel to questions about the leadership change is the fact that Zadeh’s new duties seem somewhat vague.
One tours and activities source from outside Airbnb said he believed Airbnb’s Experiences business is very much a work in progress, and the revenue is not particularly significant financially at the moment.
“They are still iterating on product and I think that will continue for the foreseeable future,” the source said. “By no means have they figured it out — much like the rest of the sector. But there has been great work coming out of there, product-wise. It’s certainly more original thought than from the usual tours and activities online travel agencies.”