As the COVID-19 outbreak continues to ravage countries and economies across the world, several firms have been forced to absorb substantial losses – both financially and operationally. It seems the latest high-profile victim to make alterations to its plans is Airbnb.
Recent data from analytics group Airdna revealed that the online rental giant Airbnb had seen its revenues and bookings plunge in Europe over the last two weeks in February. This was attributed to the drop in both travel and tourism within that period.
Travel Bans and Tourism Shortfalls Hit Airbnb
Daily reservations across major cities like Beijing, Seoul, Milan, and Rome have also slumped significantly. Beijing, which is only 1,100 km away from the region where the Coronavirus first broke out of, was hit the hardest, with bookings dropping by 96 percent. The city had only 1,655 reservations in the first week of March 2020, down from about 40,500 in the first business week of January.
Travel restrictions set by governments have also affected airlines and other players in the travel and hospitality industries, the report explained.
Earlier this week, U.S. President Donald Trump announced the suspension of travel to European cities for at least 30 days. He also chided European leaders for failing to contain the virus and its spread proactively. With these restrictions set to come into effect soon, Airbnb’s foreign business could slump even further.
Data on the firm shows that some of the most popular cities for booking experiences are Tokyo, Paris, Rome, and Osaka — all of which have been severely affected by the virus.
US Markets Pull Back
The country’s U.S. market is also set to suffer a downturn as a result of event cancellations and other restrictions caused by the virus. Kameron Bain, the Director of Strategy at beyond Pricing (a pricing and savings affiliate of Airbnb), has explained that mass cancellations in urban centers like Chicago and San Francisco will affect the firm as well since most of these public centers attract travelers and tourists from across the country.
Earlier this week, the San Francisco Mayor’s Office banned gatherings with over 1,000 people. The city’s basketball team, the Golden State Warriors, already shut their Chase Center venue and ordered for games to be played behind closed doors — before the NBA season got suspended indefinitely.
Airbnb had planned to take its company public this year, however, this is now highly unlikely to happen until the virus has been contained. [Financial Times]
Citing a spokesperson for the company, the news source explained that moving forward with the Initial Public Offering (IPO) would be impossible. The spokesman also stated that the current market conditions aren’t conducive for an IPO, adding that the company would most likely take a cautious approach as they weren’t rushing to go public in the first place.