Expedia has a formidable and well-funded rival knocking on the door after Airbnb’s stock more than doubled in a blockbuster initial public offering Thursday.
The Wall Street Journal pegged Airbnb’s valuation at $100.7 billion — a mind-boggling figure that the newspaper said is greater than Marriott, Hyatt Hotels and Hilton Worldwide Holdings combined. It’s also valued at more than five Expedia Groups, the Seattle-based travel company that closed trading today valued at $18.4 billion.
Airbnb priced shares at $68, and closed the day at $144.71. It raised $3.5 billion in the largest U.S. IPO of the year.
In its IPO filing, Airbnb listed Expedia Group as well as Booking Holdings as two competitors.
“Many of our current and potential competitors enjoy substantial competitive advantages over us, such as greater name and brand recognition, longer operating histories, larger marketing budgets, and loyalty programs, as well as substantially greater financial, technical, and other resources,” the company wrote. “In addition, our current or potential competitors have access to larger user bases and/or inventory for accommodations, and may provide multiple travel products, including flights.”
The fundraising haul by Airbnb creates a juggernaut in online travel.
At the GeekWire Summit in October, Expedia Group CEO Peter Kern addressed the vacation rental market, noting that the company’s Vrbo business was doing well during the pandemic.
“Definitely, we’ve seen strength in the alternative market for Vrbo — and I’m sure our friends at Airbnb are seeing similar strengths,” Kern said.
Airbnb was founded in 2008, nine years after Microsoft spun off Expedia into a public company. Its rapid growth and now $100 billion valuation has wowed Wall Street. It boasts more than four million hosts who rent everything from California beach houses to Colorado mountain getaways. Igloos and treehouses also can be rented through the marketplace, which operates in more than 200 countries.
The company, which operates an engineering center in the Seattle area, posted revenue of $2.5 billion for the first nine months of 2020. That compared to $3.6 billion for the same period in 2019. Meanwhile, its net loss more than doubled to $696 million for the first nine months of this year, sparked in part by the decline in the travel business due to COVID-19.
By comparison, Expedia Group posted revenue of $4.2 billion for first nine months of 2020, down from $9.3 billion in 2019. Its net loss for the first nine months of this year was $2.2 billion.
