Airbnb CEO Brian Chesky said the investment will put the company in ‘the strongest possible position’ when the travel sector rebounds from the Covid-19 pandemic.
On Monday (6 April), Airbnb announced that it has received a $1bn investment from Silver Lake and Sixth Street Partners, in a combination of debt and equity securities.
The company said that the backing will fund Airbnb’s long-term investment in its community of hosts who use the platform, as well as other stakeholders in the Airbnb community.
The news comes as travel restrictions put in place to limit the spread of Covid-19 have taken a significant toll on the travel and hospitality sectors worldwide.
In Dublin, there was a 64pc increase in rental properties on Daft.ie as the Covid-19 crisis intensified. This was believed to be fuelled by landlords withdrawing rentals from short-term listing and hospitality sites like Airbnb and putting them on the rental market.
Airbnb co-founder and CEO Brian Chesky said that the fresh funding will enable the company to be in the “strongest possible position as travel rebounds from the Covid-19 pandemic”.
Focusing on three core products
“The desire to connect and travel is an enduring human truth that’s only been reinforced during our time apart,” Chesky added.
“But the way this manifests will evolve as the world changes. We’ll see a new flexibility in how people live and work, which means they won’t have to be tethered to one location.”
Chesky said that customers will likely travel closer to home in light of everything that has happened over the last few months. In response, Airbnb said it is going to focus on investing in three core aspects of its business: hosts, long-term stays and Airbnb Experiences.
It added that long-term stays will relate to students needing housing during school, workers needing accommodation during assignments and people looking for even longer-term accommodation. With Airbnb Experiences, the company will look to offer more unique activities led by hosts.
“The desire to explore, connect, have new experiences, and have a comfortable place to call home are universal and enduring,” Chesky said. “And our commitment to create a greater sense of belonging – for everyone, everywhere – will never change.”
Investing in hosts
Chesky’s announcement comes a week after the company published a letter to hosts, informing them of an update to the company’s extenuating circumstances policy, which offered a full refund to guests who made reservations between 14 March and 31 May.
The company said it was setting aside a fund of $250m to help hosts cover the cost of Covid-19 cancellations.
Airbnb wrote: “When a guest cancels an accommodation reservation due to a Covid-19 related circumstance, with a check-in between 14 March and 31 May, we will pay you 25pc of what you would normally receive through your cancellation policy.
“This applies retroactively to all Covid-19 related cancellations during this period. This cost will be covered entirely by Airbnb. These payments will begin to be issued in April.”
The company also launched a $10m fund to support ‘superhosts’ on the platform. This fund was started by employees who raised $1m in donations, followed by a $9m donation from Airbnb’s founders.
Backed during a difficult time
From the new $1bn investment, Airbnb will use $5m to further support superhosts on the platform and provide grants worth a total of $15m to superhosts who rent out their own home and need help paying rent or mortgages.
Commenting on the investment, Silver Lake co-CEO and managing partner Egon Durban said: “While the current environment is clearly a difficult one for the hospitality industry, the desire to travel and have authentic experiences is fundamental and enduring.
“Airbnb’s diverse, global and resilient business model is particularly well suited to prosper as the world inevitably recovers and we all get back out to experience it.”
Sixth Street Partners CEO and managing partner Alan Waxman added: “Airbnb created an enormous new category, underpinned by the leading brand and technology platform, as well as a community founded on trust.
“The company’s achievements speak for themselves and we are excited by the opportunities on the horizon as they continue to grow their geographic footprint, accommodations and experiences.”