IPO Report

A look into Airbnb before IPO

Monday, December 7, 2020 • 4:00 PM EST

As Airbnb plans it’s December 10th, 2020 debut on the public markets, the company’s bump from long-term lockdown rentals seems to be waning. Cardify data shows that while Airbnb recovered from the gut-punch of the pandemic’s early days, the trendline is turning negative. The platform saw a decrease in both user acquisition and order frequency since July 2020 and is further being pulled down by a shrinking lodging sector. However, it remains a strong player in the weakened sector, seeing a growing share of the market as traditional hotel chains struggle to stay afloat.

While Airbnb lost volume from its 2020 peak (which was roughly 1.5x pre-pandemic averages), it’s still hovering around pre-pandemic volumes. However, volume has been on a downward trend, driven by decrease in new user acquisition and frequency of stays.

In the early days of the pandemic, user acquisition crashed as lockdowns took effect. That number rebounded slightly in early summer 2020, but has been on a steady decline since July.

Further, data shows that people are renting Airbnbs less often than they did pre-pandemic. While the average order frequency saw a small spike in summer 2020 alongside user acquisition, it has been on a steady decline since August.

Our data suggests the company’s saving grace seems to be longer-term stays. Average order value jumped and has largely stayed consistent throughout the pandemic, likely due to people leaving the city and seeking more space in the country for lockdowns.

While Airbnb’s market share of the lodging sector is growing, the company’s negative volume trend, decreasing user acquisition, and decreasing purchase frequency suggest the win is due to the sector shrinking more than Airbnb growing.

Airbnb got a boost early in the pandemic as people sought to escape shoebox city condos in favor of more space in the country. However, the company is experiencing negative trends in weekly volume, user acquisition, and order frequency heading into IPO. That said, of all lodging sector companies Airbnb may be best equipped to weather the storm. The variety and uniqueness of many Airbnbs around the world offer opportunities for lockdown-weary folks that most traditional hotel chains simply can’t match.