Imagine having extra space in your home and renting it out as a temporary stay to visitors. This is the concept of Airbnb and how the idea developed into such a successful business. It is one of the most successful businesses today. It’s no surprise that people are finding ways to invest in Airbnb.
Is this business worth the investment of your hard-earned money? Let’s dig into it a little bit more.
What Is Airbnb?
Airbnb is a house-sharing service platform that started in 2008. If you have a room in your house or an additional property that’s just sitting around, you can advertise it on the platform and earn passive income when people book it. The platform simply connects you to people looking for a place to stay in or near your area.
Airbnb is not only known for its traditional renting service. With Airbnb Experiences, hosts can share their favorite local activities with their guests. The experiences can be related to arts and entertainment, health and wellness, food and drink, or classes and workshops. Hosts can take guests to a wine tasting activity, a folk dancing class, a water sports adventure, or even simple walking tours in order to showcase the area from a native’s perspective.
The best thing about this is that you don’t need to have a room available to be an Airbnb Experiences host. You just have to submit your idea and then set your schedule and rates once approved.
Aspiring Airbnb hosts can sign up on the website for free. Indeed, this platform can provide individuals with not only another source of income but also a unique way to create connections. Check out some cool facts about this company:
- Over seven million Airbnb listings are available globally
- More than 220 countries and regions have Airbnb listings
- Over 100,000 cities have Airbnb listings
- There is an average of 2 million guests staying in Airbnb listings per night
What’s Special About Airbnb?
Airbnb is considered the largest accommodation sharing site in the world. The platform’s popularity is so awe inspiring, that many investors are now considering how to invest in Airbnb. In fact, there are a lot of takeaways as to why Airbnb is becoming the travelers’ favorite go-to site when looking for accommodation.
Affordability
Airbnb listings are cheaper than hotel booking rates. Likewise, if a friend registers in an Airbnb by using your referral link, you get $14 in travel credit. Note that this reward will only appear in your account after your referred friend completed a qualifying stay or experience. You can apply this bonus whenever you book on Airbnb.
The maximum travel credit one can get from referring someone to Airbnb is $5,000. Your credits will expire one year from the date issued. Not only will you save on booking fees, but you will also receive discounts when you refer others.
Local Experience
Airbnb offers an authentic local encounter that hotels cannot provide. With the many different property listings available, you can opt to stay in a local neighborhood and get a chance to observe and experience how the locals live. You can also easily find and eat in non-touristy restaurants or shop in the local stores nearby. This is something hard to get from hotels that can be impersonal and which are typically located in the biggest cities.
Amenities
A hotel room is often equipped with just the necessities. Meanwhile, Airbnb listings can offer more. Some hosts rent the entire property and enjoy complete facilities that come with a furnished house or apartment. This means you get to have kitchen amenities if you want to cook or a washing machine if you want to do your laundry conveniently. There are even properties with swimming pools or hot tubs that provide ultimate relaxation for the guests.
Rental Diversity
Not all properties are the same. Some of the unique listings on Airbnb include treehouses, lighthouses, boathouses, and even penthouses. Depending on your budget, you can definitely take your vacation to a whole new level with Airbnb.
Verification
Guests won’t need to worry about the authenticity of the listing. Airbnb verifies each listing before it goes live on their platform. Hosts are required to provide essential information before they can be listed. Also, guests are free to leave feedback regarding the host and the property. These reviews are helpful for each tenant in making the decision to book. All payments also first go through Airbnb’s system. The payment will only be received by the host after the guest’s first 24-hour stay. For extra security, Airbnb’s hotline is available 24/7.
Do you know that Airbnb has confidentially submitted a draft Initial Public Offering (IPO) or stock market launch to the U.S. Securities and Exchange Commission (SEC) just this August 2020? Though there is no stock price as of yet, this just means that the public can soon buy Airbnb shares. From what you already know about the popular business, would Airbnb be worth your investment?
Valuation Cut
The valuation of Airbnb constantly changes every time the company earns profit. It just so happened that the COVID-19 pandemic caused the company to have a 42% valuation drop. A valuation cut can be an ideal opportunity to buy the company’s stock for the long run.
COVID-19 Adjustments
Unfortunately, the pandemic is affecting all kinds of businesses these days. However, Airbnb has worked hard to retain the company’s integrity throughout the ordeal. For one, they have rebranded Airbnb Experiences as virtual. Customers are now able to book online classes and other virtual experiences. Eventually, Airbnb made itself relevant to the market once again. This just shows that the company is always ready to adapt no matter what kind of challenges arise.
Travel Demand on the Rise
The pandemic won’t last forever. Therefore, the travel demand will be back sooner than later. In fact, Bloomberg reported that bookings are now down to only 30% compared to last May, when they were down 70%. There is a high chance that the company’s valuation will recover in 2021.
Customers Long for Experiences
Airbnb will remain stable because customers rely on them for their travel and culturally immersive experiences. Whatever the consumers are looking for in this niche, they will go look for it on Airbnb. The demand for experiences will always be there, regardless of what situation the world is in. If this trend continues, Airbnb may achieve being the people’s go-to marketplace that matches them with exceptional physical and online experiences.
How Can I Buy Airbnb Stocks?
If you’re hoping to acquire an Airbnb stock, you must start with opening an online brokerage account. Of course, you also have to deposit money to that account. Use an Airbnb investment calculator to determine how many shares you can buy with your investment. And once everything is set, you can begin trading. Just make sure you have all you need, and you’ve learned enough. You can follow The Stock Dork to learn more about what strategy works best for you.
Acquisition of Airbnb stock options are possible through these ways:
1. Acquire Stock in the IPO
In the past, only those of the wealthiest could invest in IPOs. But since the financial technology has always been revolving, IPO investing has become available to more investors. If you are determined to invest in Airbnb IPO, do your research and due diligence first.
2. Acquire Stock After the IPO
A conservative way to buy an Airbnb stock is to wait for the IPO to complete. While some investors can get in at a price at or below the IPO price, this is not always the case. Spending time and effort to own a company before IPO may only get you a small allocation. Again, research online brokers that can help you get stock after an IPO is completed.
3. Acquire Stock in Pre-IPO Secondary Marketplaces.
Say an employee is given stock of a company. It is valuable but will remain an illiquid asset unless the company goes public. What they can do is sell their stock to pre-IPO secondary marketplaces. Here, an eager investor can get stock before the company goes public. Note that this option may be a bit risky for investors because the company’s financials are not yet publicly filed with regulators.
Are There Any Concerns About Airbnb?
While you’re on your research on how to invest in Airbnb, you may also want to check out some concerns about the company:
Regulatory
Airbnb is facing regulatory issues concerning the traditional renting market. As the popularity of the platform rises, more homeowners choose to list their property here instead of going the traditional way. As a result, the number of properties available for traditional rent is decreasing, making it inconvenient for the people to rent properties. Airbnb is working with the national regulators to mitigate these concerns.
The strong demand for Airbnb stock during their IPO makes it among the best stocks to buy right now. If you’re hoping to acquire an Airbnb stock, you must start with opening an online brokerage account.
Safety
Another minimal concern with Airbnb is the safety of the property. Some properties are believed to be lacking safety equipment, like smoke detectors, fire extinguishers, and first aid kits. Nick Shapiro, Airbnb Global Head of Trust and Risk Management, stated that safety is Airbnb’s top priority. He affirms that the company is following all local laws and regulations to ensure that the homes listed are safe for guests.
Conclusion
Airbnb has submitted a draft IPO registration. This means that the public can purchase Airbnb shares in the stock market soon. How much is a share of Airbnb? No specific amount is stated yet. However, with the pandemic affecting businesses, the company will probably be at a lower valuation, which can impact the stock price.
The company remains one that is worth investment in the long-run. Once the pandemic is over, travel and cultural experiences will soon have a very high demand. So, what are you waiting for? To learn more about whether or not to invest in an Airbnb stock, check out our website!
It’s no surprise that Airbnb stock is one the best stocks to buy right now, and people are finding ways to invest in it.