William Blair & Company initiated research coverage of Airbnb, Inc. (ABNB $146.80). Airbnb is a U.S.-based online vacation rental marketplace that offers arrangements for lodging or tourism experiences.
Analyst Ralph Schackart estimated the company would generate revenue of $3.249 billion in 2020 and $4.459 billion in 2021. In 2019, 84% of the company’s revenue was from stays with existing hosts and 69% was generated through stays completed with repeat guests.
“Airbnb’s platform was built for the unique needs of its hosts and guests,” Schackart said. “Airbnb is home to roughly 4 million hosts with over 5.6 million active listings. The company strives to have both lodging and experience offerings to fit the needs of all existing and potential guests, including 90,000 cabins, 40,000 farms, 24,000 tiny homes, 5,600 boats, 3,500 castles, 2,800 yurts, 2,600 treehouses, 1,600 private islands, 300 lighthouses, and 140 igloos. One of Airbnb’s core innovations has been the design of a system that allows millions of strangers to trust one another, enabling them to communicate before booking, pay through a secure payments platform, and post reviews. Hosts and guests attract each other to join the platform, creating a network across over 220 countries and regions globally.”
Schackart continued, “Airbnb has created a network that allows it to expand without the need to deploy local operations in each city that it operates. In addition, Airbnb’s early strength in cross-border travel has enabled it to enter new markets, where the company can then focus on growing domestic travel within those countries. Although COVID-19 has slowed the frequency of cross-border travel, the company believes its global network will remain a key advantage as guests seek to travel close to home.”
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