In January of 2020, if you had told Airbnb executives that in a few months they’d be laying off almost 25 percent of their workforce, they would never have believed you. Likewise, if you had told them in the thick of COVID’s spring devastation that soon they’d have a blockbuster IPO, you might have been laughed out of the Zoom. It was a rollercoaster of a year for the platform—one that saw it become the most highly valued hospitality brand in history, all without owning a single hotel room.
But it’s a new year now, and Airbnb has just released its first-ever public earnings report. The news was decidedly mixed. On the one hand, the company brought in $859 million in revenue in the fourth quarter, far surpassing the forecasted figure of $739.7 million. On the other hand, it recorded a staggering loss: nearly $4 billion in those three months alone. During the regular trading day, immediately before the numbers were released, shares of Airbnb had slid almost 10 percent, the stock’s worst single-day performance yet. The earnings report was enough to arrest the slide, but not reverse it: Airbnb went up a paltry 1 percent in after-hours trading.
What does that mean for designers? It’s complicated. Over the last few years, the company has become a significant source of work for many. So significant, in fact, that it has essentially spawned its own genre of interior design in the hazy space between residential and hospitality work. (Google “Airbnb interior designer” and you’ll find a crowded marketplace—including not only hordes of Airbnb designers, but business coaches who specialize in helping designers target the Airbnb niche.)
For the pool of designers who rely on Airbnb hosts as a source of income, the math is simple: What’s good for the platform is good for them. A muddled report likely means that it will be a while until demand returns to normal levels.
However, the news has more nuanced big-picture implications for the design industry. Market analysts have been eagerly anticipating Airbnb’s earnings report both for guidance on whether to buy or sell the company’s stock and as a proxy for how Americans feel about travel. The report seems to suggest that the industry is nowhere near at full strength, and may not reach it until 2022 or beyond. Airbnb declined to offer guidance on the year ahead, citing “limited visibility” into 2021, and the news didn’t cause any major movement in travel-related stocks elsewhere on the market.
A tepid near-term outlook for travel is—let’s face it—good news for the home industry. While everyone is eager to see the end of the pandemic, it has become increasingly clear over the past year that a healthy portion of the discretionary income that Americans, especially affluent Americans, would have spent on travel has gone toward investments in home. Another summer of anemic tourism would likely see home-oriented companies extend their winning runs.
Of course, someday soon, travel will come roaring back. When it does, designers and home world brands once again will have to contend with homeowners choosing between a kitchen remodel and a month in Italy.
As for Airbnb itself, its leadership is optimistic. Despite a massive year-end loss and signs of tension bubbling up with its host community, executives have plenty to cheer about. A recent internal study released by the platform found that new hosts had earned over $1 billion in 2020. And while the earnings report was mixed, the company’s numbers outshone the competition from its digital rivals and old-school hospitality brands alike.
“Our performance in 2020 showed that Airbnb is resilient and inherently adaptable,” said CEO and co-founder Brian Chesky in a statement. “Travel is coming back, and we are laser-focused on preparing for the rebound.”
Homepage photo: AlesiaKan/Adobe Stock