Airbnb is hoping to capitalize on the growing popularity of home rentals during the coronavirus pandemic with its $3 billion initial public offering, but the sun may be setting soon. A key question is whether travelers will continue to book short-term home rentals or return to hotels as the health crisis improves.
While home rental bookings surged over the summer, some travel executives point to weakening fall and winter trends and contend there will be a return to hotels in 2021 once a vaccine is made readily available.
Tracking real-time data, BTIG analysts said Airbnb has weakened so far in the fourth quarter with absolute volume trending back toward May levels.
“There’s potential for a double dip in booking volumes here, which is probably a factor in [Airbnb’s] decision to make a move on the IPO now,” Steven Jankowski, head of growth at data analytics firm AllTheRooms, told CNBC.
Booking Holdings CEO Glenn Fogel also is seeing bookings soften for alternative accommodations. Following third-quarter earnings, released earlier this month, the largest online travel operator said home rentals made up a smaller share of bookings in the third quarter versus the second quarter.
Fogel also told CNBC that as coronavirus case counts declined over the summer, hotel bookings improved. Expedia CEO Peter Kern made similar comments on the earnings call.
While travel experts are anticipating an increase in cancellations this holiday season as Covid-19 cases rise to record levels, most are still anticipating an eventual rebound in travel sometime in 2021 once a vaccine becomes more widely available.
‘Demand is going to return’