COVID-19 endangers Airbnb IPO plans as travel industry comes to a halt

Coronavirus’ outbreak has already ravaged
countries, economies, and even entire industries, and with numerous companies
already experiencing major losses, it appears that Airbnb might be the next
high-profile victim of the virus. New data published by the analytics group, Airdna,
shows that the rental giant, Airbnb, experienced a major drop in both booking
and revenue.

The company started experiencing the plunge in
Europe some time ago, beginning with the last two weeks of February. This was
attributed to the drop in tourism and travel during this period.

Bookings around the world have
dropped

Reservations have also dropped in major cities
around the world, including Milan, Rome, Seoul, and Seoul, all of which are in
the areas that were hit the most by the virus outbreak. Beijing suffered
particularly, being only 1,100 km away from the area where the virus originally
emerged, and bookings in the city dropped by as much as 96%.

Prior to the outbreak, the city had around
40,500 reservations. During the first week of March 2020, that number dropped
to 1,655. reservations. Meanwhile, the governments around the world are
introducing travel restrictions, which did not only affect Airbnb, but also
airlines and other major players in the hospitality and travel industries.

In the US, President Donald Trump suspended all travels to and from Europe for the following 30 days, and he criticized European leaders for not containing the virus and allowing it to spread as rapidly as it did. However, the restrictions will stand, and they are likely to cause Airbnb’s bookings to drop even further.

Before the virus outbreak, the most popular
booking locations included the likes of Rome, Paris, Tokyo, and Osaka, all of
which are now strongly affected by the virus outbreak.

The situation is the same in the
US, as well

Meanwhile, the US market is suffering, as
well, as all events are being canceled, and a number of other restrictions are
introduced due to the virus. The Director of Strategy at Airbnb’s pricing and
savings affiliate Beyond Pricing, Kameron Bain, explained that these mass
cancellations in urban centers will undoubtedly affect the company.

Whenever there are major events in these
public centers, travelers from around the world are gathering, and are in need
of booking. With no events, there are no tourists, especially with traveling
restrictions, so it is all quite connected.

In addition, the San Francisco Mayor’s Office
also recently banned any gatherings including 1,000 people or more. The games
are ordered to be played without spectators, at least before the NBA season was
suspended entirely.

All of this comes right before Airbnb took its
company public, as was the plan for this year. However, with the situation
being as it is, it is highly unlikely that this will happen until the virus has
been contained. Right now, moving forward with the IPO is impossible, and the
firm’s spokesperson revealed that the company would be taking a cautious
approach.