SAN FRANCISCO • Airbnb's losses deepened for the fourth quarter of last year, even before the coronavirus outbreak caused global travel to nearly grind to a halt.
The world's biggest home-sharing company reported a loss of US$276.4 million (S$390 million) excluding interest, taxes, depreciation and amortisation, compared with a loss of US$143.7 million a year earlier, according to a person familiar with the company's accounts.
Revenue increased 32 per cent in the period to US$1.1 billion and it has more than US$2 billion in the bank, said the person. Airbnb declined to comment on the figures.
The coronavirus has hit the travel industry hard and is likely to throw a wrench in the start-up's growth trajectory and possibly thwart its plans for a public stock listing this year.
Airbnb had projected revenue to increase 25 per cent in the first quarter of this year, according to the person, who asked not to be named discussing information that is not public. That projection likely underestimated the full effect of the coronavirus on international travel, said the person.
The coronavirus is now active in more than 100 countries and has put Italy on near total lockdown. Airlines have cancelled flights to several countries and many companies have forbidden international travel for their employees.
In China, Airbnb's business has been devastated by the virus. Planned bookings for February and March were down by more than 90 per cent from a year earlier, said the person.
The widening losses could also raise flags for investors who are scrutinising the company ahead of a potential listing. Airbnb was profitable before interest, taxes, depreciation and amortisation in 2017 and 2018, but lost money on that basis last year, said a person familiar with the accounts previously.
With a private market valuation of US$31 billion, Airbnb had been seen as one of the most highly anticipated stock listings for this year.
But one of the main ingredients for a successful stock market debut is evidence of growth and, if not profit, the potential for big earnings in the future. The virus will make that harder for Airbnb to show this year.
Airbnb has already been fielding scores of complaints from guests who have been forced to cancel travel plans and are being denied refunds. Its "extenuating circumstances" coronavirus policy currently covers only China, South Korea and Italy, while new travel restrictions are emerging frequently.
Unlike big hotel chains, Airbnb is a two-way platform, which means for every guest cancellation it approves there is a host at the other end who winds up out of pocket. As the company tries to strike a balance between the two, many guests have been left to negotiate over refunds with their hosts, who are not always willing to be flexible.
BLOOMBERG
