Airbnb (ABNB) has been trading on the Nasdaq exchange for almost 13 months now, having kicked off its initial public offering on Dec. 10, 2020 with a superb debut and a 112% gain on its first day of trading. Yet…
because we were coming out of the national lockdown period of the pandemic, it was easy to have an optimistic outlook about the prospects for travel, tourism, and getting away for vacation. Airbnb’s business was hit hard by the forced closure of businesses and restrictions on travel, so a reopened economy filled investors with a lot of hope.
While that thesis was largely correct, 2021 was also a year marked by outbreaks of various COVID-19 variants. The harsh delta variant almost plunged the country into lockdown mode again (and some states and localities did reimpose restrictions), and while that was followed by the omicron variant, it’s increasingly seen as a very mild form, and medical professionals are hopeful it is the way we get through the pandemic.
Still, the large unknowns about this virus have made investors timid when it comes to travel and tourism stocks, and Airbnb’s shares are down 22% from the highs it hit early on.
Let’s see how you would have fared had you invested $10,000 in the short-term rental specialist at its IPO, and whether Airbnb is a good investment to hold on to for years or even decades or if its stock should be put back up for sale on the market.
Fast out of the gate
There are more than 130 million households in the U.S., and around 1 billion globally, making the potential market for Airbnb’s business quite large.
It ended 2020 with around 5.6 million active listings, but underscoring the faith investors had in Airbnb to navigate its way out of the coronavirus outbreaks, it has seen those active listings grow every single quarter in 2021 (it presumably will update the total when it reports its full-year results).
Gross booking value, or the total amount of what Airbnb charges for guests to stay at a residence, including cleaning and other fees, jumped 48% to $11.9 billion compared to last year, and it’s up 23% compared to the same quarter in 2019.
While hosts earned a record $12.8 billion in income from the rental company, up 27% from the year-ago period, Airbnb’s own revenue grew to $2.2 billion, a 67% increase. Because…
Continue reading at THE MOTLEY FOOL