Airbnb is smart to focus on its core accommodations' business, if that is indeed what it is really doing. The company has time to deal with all of the other stuff, from flights to hotels and experiences, once a real-life travel recovery has a pulse.
Is Airbnb worth its current $113 billion market cap? You know, the stock market valuation that is more than a third larger than that of the former online travel market cap leader, Booking Holdings, at $82 billion.
In an interview for the Bloomberg — The Year Ahead virtual conference Thursday, Airbnb co-founder and CEO Brian Chesky wisely avoided answering that question directly, saying he doesn’t want to set a dangerous precedent of commenting on stock prices.
But Chesky said Airbnb is building the company for the long term and at 39 years old, “I do intend to do this for decades to come.”
There were reports last year that some board members sought to have Chesky step down, but April 2020 seems like light years ago.
In newsy bits from the interview conducted by Bloomberg’s Emily Chang, Chesky said “down the road” Airbnb will certainly restart businesses that the company either didn’t launch or ceased investing in — flights and hotels, respectively, come to mind — because of the pandemic. However, he added that the company’s current focus is to have all hands on deck at Airbnb to improve the stay experience for guests and hosts for the next travel season, whenever a recovery occurs.
Speaking of all hands on deck, Chesky said the company rehired “a handful” of its 1,900 laid off employees, and will continue to do so cautiously. He said the last thing he ever wants to to is carry out another round of layoffs.
“I’m optimistic we’ll bring a lot of people back down the road,” he said.
About the company’s December 10 initial public offering and Airbnb’s lofty valuation, Chesky said these developments have engendered an increased “sense of formality” in the company, and the “sense of responsibility is more vast” knowing that hundreds of thousands of shareholders now have a stake in Airbnb’s success.
“That motivates us even more,” he added.
Chesky said he counsels employees to consider the things they can control rather than Airbnb’s share price. He said “focus” was the key to surviving the coronavirus crisis, when Airbnb’s business fell 80 precent or so, and the company doesn’t want to forget that lesson.
When asked about retail investors frenetically driving up Gamestop’s stock price, Chesky said “our company is used to volatility” after 2020, and won’t be unnerved by stock market fluctuations.
Virtual Experiences are Strategic
The Airbnb CEO put an interesting spin on its virtual experiences business, which emerged last year when in-person tours and activities collapsed because of the coronavirus crisis.
Chesky said its virtual experiences serve as an icebreaker for people new to Airbnb who might consider it a leap to go stay in a stranger’s in a distant city.
The Future of Travel
Airbnb released a U.S. survey (embedded below) Thursday on traveler sentiment. Among the findings, 54 percent of U.S. respondents said they had already booked travel for 2021 or planned on doing so.
Some 53 percent of respondents said the pandemic left them feeling less-connected to their extended family and friends.
“Mass travel is really just a different form of isolation — you are anonymous, herded around with other travelers, never really experiencing the people and culture of a community,” said the Airbnb report, entitled From Isolation to Connection — Travel in 2021. “What people want from travel now is what they’ve been deprived of—spending meaningful time with their family and friends.”
In the Bloomberg interview, Chesky declined to predict what month a travel recovery might occur but mentioned this summer as a potential timeline.
Chesky was bullish about the prospects for leisure travel, which he said would entail longer stays, and said business travel will come back — but not in its former incarnation. Businesses will rethink reflexively putting employees on planes for meetings, although that will indeed occur when appropriate, he said.
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Photo credit: Airbnb co-founder and CEO Brian Chesky during an IPO roadshow presentation in December 2020. Airbnb