Home rental service Airbnb has said that Covid and the actions the company took to mitigate its impact have “materially adversely impacted” the business that has incurred net losses every year since its inception. “We incurred net losses of $70.0 million, $16.9 million, $674.3 million, and $696.9 million for the years ended December 31, 2017, 2018, and 2019, and nine months ended September 30, 2020, respectively,” according to its IPO documents that were publicly revealed on Monday. The company noted that its revenue growth rate has slowed and it expects that to continue to slow in the future. In fact, “If our revenue does not improve, we may not achieve profitability.” Airbnb saw $2.5 billion in revenue in the first nine months of 2020, down 32 per cent from $3.7 billion during the year-ago period. Its net loss grew over 2x to $697 million from $322.8 million during the period. Airbnb’s valuation had also reportedly dropped from $31 billion before Covid to $18 billion recently.
However, as part of its long-term growth strategy, Airbnb plans to expand into India where it has lower penetration even as it is a market important to its success, the filing showed. India along with China, Latin America, Southeast Asia, and “tens of thousands of smaller markets and remote areas around the world” are regions where Airbnb’s “penetration is lower,” the prospectus noted. Airbnb, which uses, collects, and processes personal data of individuals in over 220 countries, said regulations in the world such as GDPR will continue to result in “significantly greater compliance burdens and costs” for businesses. Many large markets, “which are important to our success, including Australia, Brazil, Canada, China, and India,” Airbnb said, have passed or are in the process of passing comparable data privacy legislation or regulations.
India is currently in the process of enacting the Personal Data Protection Bill that was approved by the Cabinet in December 2019. The bill, similar to the European Union GDPR, provides for personal data protection to individuals and proposes up to Rs 15 crore in a penalty for businesses and also a jail term for company executives for violations.
Launched in 2016 in India, Airbnb had contributed over $320 million to India GDP driven by guest spending during the day, hosts investment in their properties, etc, a report by Oxford Economics had said in August this year. Airbnb had also supported nearly 50,000 local jobs in 2019, according to the report. The guests on Airbnb India grew at an 83.4 per cent annualized rate between 2015 and 2019 while the number of listings went up from 14,000 in 2015 end to 55,000 by the last year-end. “We are still young in India. Our cofounder (Nathan Blecharczyk) also said that India is among the fastest-growing markets for Airbnb. In fact, out of all the emerging markets where Airbnb exists, India is among the top five,” Amanpreet Bajaj, General Manager – Airbnb India, Southeast Asia, Hong Kong, and Taiwan had told Financial Express Online last year.