CEO Brian Chesky on Airbnb's road to becoming 2020's biggest IPO
Looking ahead, Chesky plans to avoid the daily ups and downs of Airbnb's stock price and focus on the customer experience.
Airbnb has become 2020's biggest IPO after opened for trading at $146 on Thursday, well above its initial share price of $68 apiece on Wednesday evening.
But the company's plans to go public were almost stifled by the coronavirus pandemic, when Airbnb's bookings fell 72% in April compared to the prior year. As a result of the pandemic, the company was forced to lay off about 1,900 of its workers, or about 25% of its workforce, in May to mitigate its losses. In addition, the company raised $2 billion in debt funding in April.
"We were planning to go public in January, and like most people's plans, 2020 got turned upside down and we put our IPO on hold," CEO Brian Chesky told the Claman Countdown Thursday. "And it probably was quite unlikely for most people to fathom in the spring that Airbnb would go public this year. But of course, something happened."
From June to September, Airbnb began to see a rebound as COVID-19 restrictions began to lift and people were able to begin travelling again. While not fully recovering, Airbnb bookings were only down around 20% during the period from the year prior.
Despite reporting a net loss of more than $696 million on revenue of $2.5 billion for the first nine months of 2020, down 32% year-over-year, the company brought in $219 million in net income on revenues of $1.34 billion in its latest quarter.
"At that point we decided, you know what? You know, we're not you know, we're not out of the woods here, but we feel confident enough that this is the right time to bring some additional shareholders onto as part of the company."
STOCKS FINISH MIXED AS AIRBNB SOARS IN DEBUT
Looking back on the moment when Airbnb almost went under, Chesky considers his company extremely lucky and touted the quick, decisive action that was made by the company's team.
"Very few people run a business that drops 80 percent in eight weeks and lives to tell about it. And if that ever happens, you have to act very quickly," Chesky said. And I convened our team. I said three things: Number one, you know, we have to be incredibly decisive; two, we have to act with all of our stakeholders in mind; and three, we better ask ourselves how we want to be remembered if we are even lucky to be remembered at all. And I think that kind of gravity makes you act very quickly and make a lot of what we hope will be viewed as a lot of the right decisions."
One of those decisions was establishing an Airbnb alumni directory, which has since helped many displaced Airbnb employees find new work.
"We had almost half a million visits to the alumni directory. So a number of them got jobs," Chesky said. "I'm very happy for them. I presume they're happy, but we would welcome employees back for sure."
Overall, Chesky believes the ultimate takeaway from the experience was to always remain optimistic and to persevere.
"You have to have optimism even in your darkest days," Chesky said. "You have to believe that things will eventually get better, that these are moments in time and some people, their fortune comes faster than others. There was a real lesson here of just kind of persevering, being optimistic. But also, I know that we're only here because of those who helped us, those who believed in us. And we are incredibly lucky to be here. That's not lost on me, how lucky we are."
AIRBNB SOARS OVER 100% IN OPENING NASDAQ TRADE
Looking ahead, Chesky is focused on doing everything he can to ensure the company continues to grow, given the responsibility that Airbnb now has to come through for its newest shareholders.
"I think we made a lot of the key decisions to get this company into a very, very good kind of disciplined place," Chesky said. "We are more focused than we've ever been."
Airbnb's new goal is to make its customers feel like they can be insiders and locals when they travel. In order to solve the problem, the company is planning to increase the number of hosts on the platform.
While the company has taken the risk of shutting down nearly a billion dollars worth of marketing, Chesky said the decision appears to be paying off as Airbnb traffic has almost returned to 2019 levels.
"The reason why is because there's quite a lot of recognition and love for the brand," Chesky added. "It's used as a noun, a verb around the world."
He believes that the coronavirus crises has revealed how adaptable its model is and how strong, more disciplined and more focused its brand is.
"We were already on a path to becoming more focus and discipline, but this took like years of progress and a pull that up forward, Chesky said. "And I think we're a better company because of a lot of the changes we've made."
The company has an uptick in remote workers and college students who are unable to return to campus but who don't want to move back in with their parents using Airbnb, he said. Roughly 14 percent of nights booked through the company last year were for stays that lasted longer than 28 days.
"There's so many use cases occurring. I don't think I can't quite tell you which of these will are temporary and which of these are permanent," Chesky said. "Although I'm pretty sure that we're going to be living in a world of flexibility and more people are going to be working from other homes...I think our model has proven that we're quite adaptable."
However, he acknowledges that the company had more than $1 billion worth of cancellations, in part because of the limits on cross-border travel. Airbnb is dependent on the return of the rest of the travel industry, such as the airlines, Chesky believes that his company has the advantage of being more adaptable due to its millions of host spaces around the globe, he said.
Still, he believes when airline travel returns, it will be a "huge benefit" to Airbnb hosts.
CLICK HERE TO READ MORE STORIES ON FOX BUSINESS
Chesky added that he will try to avoid concerning himself with the daily ups and downs of the company's stock price and focus on what he can control.
"Of course, this price will go up. It will go down," Chesky said. "But I tell our company to focus on the things we can control and we can't control the stock price. So trying to focus on something that you can't control is not super productive. But what we can control is to make sure that, like, when people come to me, they have an amazing experience. And so I want our company just completely focused on that problem, making sure we take care of our stakeholders."
Airbnb stock soared more than 100% during trading Thursday, closing at $144.71 per share at the end of the session.