Airbnb just went public — Here's how it benefits from America's remote workforce
The travel industry has been hit hard by the coronavirus, and new federal guidelines urging Americans to celebrate the winter holidays at home could strike yet another blow to the ailing sector.
But one travel company that went public on Thursday, Airbnb (ABNB), is benefiting from a new aspect of life under lockdown — with offices closed, many employees can work remotely from rental properties in far-flung locations.
Airbnb priced its initial public offering (IPO) at $68 on Wednesday with a roughly $47 billion valuation. It opened for trading on the Nasdaq at $146 per share on Thursday, high above its IPO price.
In an S1 filing with the Securities and Exchange Commission filed in November, Airbnb indicated that the rebound in domestic travel would be a healthy tailwind in the near-term. While the company still logged a net loss of $696.9 million for the first nine months of this year, it managed to eke out a profitable third-quarter amid spending cuts and an uptick in local travel.
See also: Airbnb could be ‘the most successful IPO of the last several years’
“Stays of longer than a few days started increasing as work-from-home became work-from-any-home on Airbnb. We believe that the lines between travel and living are blurring, and the global pandemic has accelerated the ability to live anywhere. Our platform has proven adaptable to serve these new ways of traveling,” the prospectus states.
With major companies like Google, Sony Music, RBS, and Group Nine Media pushing back a return-to-office until at least 2021, and tech leaders like Twitter, Facebook, Shopify, and Slack establishing permanent remote work indefinitely, COVID-19’s long-term impact on expectations for the workforce has the possibility of normalizing work-from-anywhere for the white collar world.
Work from anywhere – for now
In a survey Airbnb released in November, a spike in longer-term travel, defined by a stay of 28 days or longer, is tied directly with the ability to work from anywhere. Sixty percent of longer-term guests were working or studying during their stays. Sixty-five percent of guests working or studying remotely during their stay reported that COVID was a factor in their decision to book a longer-term stay, citing the freedom to temporarily relocate while not commuting to offices or schools.
Yahoo Finance DC correspondent Jessica Smith and her husband Travis Perry, a certified financial planner, gave up their apartment at the end of September and have been road tripping and working at various Airbnbs across the country.
Out of office. 👋🏻 pic.twitter.com/6fd8V9IJRF
— Jessica Smith (@JessicaASmith8) September 13, 2020
Traversing through Nebraska, South Dakota, Oregon, and California, the couple had plans to travel to Nevada, Utah, and Colorado to round out their trip. Smith says after crunching the numbers, she and her husband were able to find several Airbnb properties that would allow more space and more peace of mind and actually save them money in the process.
“We paid less for Airbnbs than we would have for rent. We made that a rule and found Airbnbs that fit the budget. We did buy a car, but that was something we were thinking about and saving for anyway. Since we aren’t paying for cable, the gym, parking, internet, utilities, or renter’s insurance, it gives us a little cushion for more takeout,” she said.
See also: What Airbnb learned from the pandemic saved its IPO
The urban exodus takes a variety of forms. For Smith and Perry, it’s a finite amount of time to explore the country and work with a change of scenery. It’s a chance to find a new way of life for others, like famed venture capitalist Keith Rabois, who’s moving to Florida from San Francisco’s Bay Area.
"I think San Francisco is just so massively improperly run and managed that it's impossible to stay here...COVID sort of masks this stuff. It's not quite as obvious where people are moving to and if they've actually moved since everybody's working remotely,” Rabois said at the Meridian conference last month.
Rabois joins others in the so-called PayPal Mafia who have fled Northern California, including Palantir (PLTR) CEO Alex Carp, who moved to Denver, and billionaire entrepreneur Peter Thiel, who decamped to Los Angeles. Most recently, Tesla (TSLA) CEO Elon Musk left California for Texas.
Still, not everybody has the freedom to work remotely. Those who do work remotely, for now, may one day have to return to the office, especially once a coronavirus vaccine is available. Indeed, Glassdoor senior economist Daniel Zhao says remote work will not be a permanent norm.
“I think most people still expect to be physically located where their company is. And that’s true for both the employer and the worker,” Zhao told Yahoo Finance in September. “There might be a period of time, whether it’s six months to a year, where workers are still remote, but ultimately, I think people expect to go back to the office.”
While the number of permanently remote job openings was up 61% year over year, according to Zhao, he noted that the vast majority of workers are tied to a physical space. In somewhat of an ironic twist, Airbnb lists its own work-from-anywhere policy as a potential downside for the business.
Under the risk factors in its prospectus, the company says the fact that its own employees and third-party vendors working remotely could have “a materially negative impact on host and guest satisfaction resulting from potential delays or slower than usual response times in receiving assistance from our customer support organization.” In August of this year, Airbnb said it was allowing its employees to work remotely until August 2021 — but after that, they may be heading back into the office.
Melody Hahm is Yahoo Finance’s West Coast correspondent, covering entrepreneurship, technology and culture. Follow her on Twitter @melodyhahm.
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