Few companies have had a more tumultuous year than Airbnb, which has emerged in rude health having stared disaster in the face as recently as March.
As the pandemic struck and travel dried up, the company saw 80% of its bookings, worth over $1bn, disappear; its customers were demanding refunds, which its landlords were far from happy to hand over; it fired a quarter of its staff; and it had to take out $2bn of emergency loans at aggressive interest rates just to ensure its survival.
Then, once lockdown restrictions started to loosen up, the pent-up desire for a quick break and a change of scene came roaring in, yet travellers weren’t keen to go through all the hassle of an airport and a masked flight, and a staycation at a local Airbnb started to look mighty appealing.
By July, the company’s booking numbers were back to where they had been the previous year, and now it is sitting on more forward bookings than it had this time last year.
Because it doesn’t own the rooms it rents, it wasn’t stuck with the expense of carrying empty rooms that bedevilled the hotel industry, and it was also less reliant on business travel, which has been slower to recover than leisure.
Airbnb expects to release its stock market filing this week ahead of an IPO that is expected to value the firm at about $30bn, and will provide a healthy wallet boost to investors such as Y Combinator, the start-up boot camp that bought a 6% stake in 2009 for a cheeky $20,000.
Tradehold: The property problem
Tradehold has had a difficult interim period, which looks more like a case of being in the wrong sector at the wrong time rather than any failing of the company itself. Its three business units had markedly different experiences of the pandemic, with a solid performance from Collins, its SA operation, some promising signs from Boutique, its London-based flexible office space offering, and a world of hurt for Moorgarth, which took a pasting along with the rest of the UK property industry.
Collins was well positioned to navigate the period with its portfolio of largely upmarket industrial and distribution centres. The bulk of its income came from long-term contracts with JSE-listed or national tenants, and it collected 90% of all rents due and achieved its pre-Covid budget. Boutique was affected by the three-month lockdown that saw London emptied of office workers, but it cut operating expenses by taking advantage of the government’s furlough scheme, and when things started to get back to something like normality, September was the best month for new business in three years.
Moorgarth was more successful than many in collecting rent in retail malls, and it was able to meet all its operating costs and to service debt, but its retail portfolio has been marked down by 18% in value since February 2019, and its loss for the period was £12.4m. Tradehold points out that the pandemic causes too many imponderables to make predictions about the future, but it seems likely that the property industry will be forever changed.
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