As Airbnb plans to make its stock market debut, the effects of the pandemic on its business are coming into focus.
In its S-1 regulatory filing, the home-rental giant revealed that it has issued more than $1 billion in refunds during the pandemic, under its policy for extenuating circumstances.
“While this helped our guests, it created problems for our hosts—half of whom depend on their Airbnb income to pay their rent or mortgage,” the filing notes. (According to the San Francisco-based company, more than 55% of Airbnb hosts are women, and the average annual Airbnb earnings per host with at least one check-in was $7,900 in the 12 months ended Sept. 30.)
For the 4 million hosts on its platform, Airbnb says it committed to pay up to $250 million to those affected by Covid 19-related cancelations to reservations for March 14 to May 31 of this year.
While this year’s refunds are largely attributed to the pandemic, the company says refunds are also sometimes related to hosts or guests having a poor experience. As pointed out in its filing, Airbnb has faced a slew of complaints ranging from accusations of racial discrimination to concerns about trust and safety.
The pandemic surely put a dent in revenue—the company reported $2.5 billion in revenue this year through Sept. 30, down from $3.7 billion in the first nine months of 2019.
While Airbnb turned a profit of $219 million in the third quarter of this year, following cost-cutting moves including layoffs, the company has lost nearly $700 million so far in 2020.
Bookings have rebounded from March, April, and May, with more people taking the opportunity to work remotely and travel locally. Instead of being concentrated in the cities that typically comprise Airbnb’s top 20 destinations, the growth is mainly coming from elsewhere, primarily involving short-distance travel and long-term stays, according to the filing.
What started with founders Brian Chesky and Joe Gebbia renting out air mattresses in their downtown San Francisco apartment rental in 2008 would lead to an about-to-go-public company operating in roughly 100,000 cities around the world.
Airbnb will list as “ABNB” on the Nasdaq.