In jurisdictions where we do not collect and remit lodging taxes, the responsibility for collecting and remitting these taxes, if applicable, generally rests with hosts. We estimate liabilities for a certain number of jurisdictions with respect to state, city, and local taxes related to lodging where we believe it is probable that Airbnb could be held jointly liable with hosts for collecting and remitting such taxes and the related amounts can be reasonably estimated. Our accrued obligations related to lodging taxes, including estimated penalties and taxes, totaled $138.4 million and $51.8 million as of December 31, 2019 and September 30, 2020, respectively, and changes to this reserve are recorded in general and administrative expense in our consolidated statements of operations.
We are currently involved in a number of lawsuits brought by certain states and localities involving the payment of lodging taxes. These jurisdictions are asserting that we are liable or jointly liable with hosts to collect and remit lodging taxes. These lawsuits are in various stages and we continue to vigorously defend these claims. We believe that the statutes at issue impose a lodging tax obligation on the person exercising the taxable privilege of providing accommodations, our hosts. The ultimate resolution of these lawsuits cannot be determined at this time.
Evaluating potential outcomes for lodging taxes is inherently uncertain and requires us to utilize various judgments, assumptions and estimates in determining our reserves. A variety of factors could affect our potential obligation for collecting and remitting such taxes which include, but are not limited to, whether we determine, or any tax authority asserts, that we have a responsibility to collect lodging and related taxes on either historic or future transactions; the introduction of new ordinances and taxes which subject our operations to such taxes; or the ultimate resolution of any historic claims that may be settled through negotiation. Accordingly, the ultimate resolution of lodging taxes may be greater or less than reserve amounts we have established.
Income Taxes
We are subject to income taxes in the United States and foreign jurisdictions. We account for income taxes using the asset and liability method. We account for uncertainty in tax positions by recognizing a tax benefit from uncertain tax positions when it is more likely than not that the position will be sustained upon examination. Evaluating our uncertain tax positions, determining our provision for income taxes, and evaluating the impact of the Tax Cuts and Jobs Act, are inherently uncertain and require making judgments, assumptions, and estimates.
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While we believe that we have adequately reserved for our uncertain tax positions, no assurance can be given that the final tax outcome of these matters will not be different. We adjust these reserves in light of changing facts and circumstances, such as the closing of a tax audit. To the extent that the final tax outcome of these matters is different than the amounts recorded, such differences will impact the provision for income taxes and the effective tax rate in the period in which such determination is made.
The provision for income taxes includes the impact of reserve provisions and changes to reserves as well as the related net interest and penalties. In addition, we are subject to the continuous examination of our income tax returns by the United States Internal Revenue Service and other tax authorities that may assert assessments against us. We regularly assess the likelihood of adverse outcomes resulting from these examinations and assessments to determine the adequacy of our provision for income taxes.
Goodwill and Impairment of Long-Lived Assets
Goodwill represents the excess of the purchase price over the fair value of net assets acquired in a business combination. We have one reporting unit. We test goodwill for impairment at least annually, in the fourth quarter, or whenever events or changes in circumstances indicate that goodwill might be impaired. As a result of the goodwill impairment assessment, management concluded goodwill was not impaired as of December 31, 2019 and does not believe that its reporting unit is at risk of failing the impairment test since the fair value of the reporting unit substantially exceeded the carrying value.
Long-lived assets that are held and used by us are reviewed for impairment when events or changes in circumstances indicate that the carrying amount of the asset may not be recoverable. Determination of recoverability of long-lived assets is based on an estimate of the undiscounted cash flows resulting from the use of the asset group and its eventual disposition. If the carrying value of the long-lived asset group is not recoverable on an undiscounted cash flow basis, we recognize impairment to the extent that the carrying value exceeds its fair value. We determine fair value through various valuation techniques including discounted cash flow models, quoted market values, and third-party independent appraisals.
Any impairments to right-of-use (“ROU”) assets, leasehold improvements, or other assets as a result of a sublease are initially recognized when a decision to sublease is made and recorded as an operating expense. Similar to other long-lived assets, management tests ROU assets for impairment whenever events or changes in circumstances occur that could impact the recoverability of these assets. For lease assets, such circumstances would include subleases that do not fully recover the costs of the associated leases. For the nine months ended September 30, 2020, we recorded $25.3 million of ROU asset impairment charges within restructuring charges in the consolidated statement of operations.
Significant judgment and estimates are required in assessing impairment of goodwill and long-lived assets, including identifying whether events or changes in circumstances require an impairment assessment, estimating future cash flows, and determining appropriate discount rates. Our estimates of fair value are based on assumptions believed to be reasonable, but which are inherently uncertain and unpredictable and, as a result, actual results may differ from estimates.
Recent Accounting Pronouncements
See Note 2 to our consolidated financial statements included elsewhere in this prospectus for a description of recently adopted accounting pronouncements and recently issued accounting pronouncements not yet adopted.
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Quantitative and Qualitative Disclosures about Market Risk
Our substantial operations around the world expose us to various market risks. These risks primarily include foreign currency risk and investment risk.
Foreign Currency Exchange Risk
We offer the ability to transact business in over 40 currencies worldwide, of which the most significant foreign currencies to our operations in the first nine months of 2020 were the Euro, British Pound, Australian Dollar, Canadian Dollar, Chinese Yuan, and Brazilian Real. Our international revenue, as well as costs and expenses denominated in foreign currencies, expose us to the risk of fluctuations in foreign currency exchange rates against the U.S. dollar. Accordingly, we are subject to foreign currency risk, which may adversely impact our financial results.
We have foreign currency exchange risks related primarily to:
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revenue and cost of revenue associated with bookings on our platform denominated in currencies other than the U.S. dollar; |
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balances held as funds receivable and amounts held on behalf of customers and funds payable and amounts payable to customers; |
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unbilled amounts for confirmed bookings under the terms of our Pay Less Upfront program; and |
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intercompany balances primarily related to our payment entities that process customer payments. |
For revenue and cost of revenue associated with bookings on our platform outside of the United States, we generally receive net foreign currency amounts and therefore benefit from a weakening of the U.S. dollar and are adversely affected by a strengthening of the U.S. dollar. Movements in foreign exchange rates are recorded in other income (expense), net in our consolidated statements of operations. Furthermore, our platform generally enables guests to make payments in the currency of their choice to the extent that the currency is supported by Airbnb, which may not match the currency in which the host elects to be paid. As a result, in those cases, we bear the currency risk of both the guest payment as well as the host payment due to timing differences in such payments.
In 2019, we began entering into foreign currency derivative contracts to protect against foreign exchange risks. Presently, these hedges are primarily designed to manage foreign exchange risk associated with balances held as funds payable and amounts payable to customers. These contracts reduce, but do not entirely eliminate, the impact of currency exchange rate movements on our assets and liabilities.
We may choose not to hedge the risk associated with our foreign currency exposures, primarily if such exposure acts as a natural hedge for offsetting amounts denominated in the same currency or if the currency is too difficult or too expensive to hedge.
We have experienced and will continue to experience fluctuations in foreign exchange gains and losses related to changes in exchange rates. If our foreign-currency denominated assets, liabilities, revenues, or expenses increase, our results of operations may be more significantly impacted by fluctuations in the exchange rates of the currencies in which we do business.
If an adverse 10% foreign currency exchange rate change was applied to total net monetary assets and liabilities denominated in currencies other than the local currencies as of September 30, 2020, it would not have had a material impact on our consolidated financial statements.
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Investment and Interest Rate Risk
We are exposed to interest rate risk related primarily to our investment portfolio and outstanding debt. Changes in interest rates affect the interest earned on our total cash, cash equivalents, and marketable securities and the fair value of those securities, as well as interest paid on our debt.
We had cash and cash equivalents of $2.7 billion and marketable securities of $1.8 billion as of September 30, 2020, which consisted of corporate debt securities, mutual funds, highly-liquid debt instruments of the U.S. government and its agencies, and certificates of deposit. As of September 30, 2020, we had an additional $2.4 billion that we held for bookings in advance of guests completing check-ins, which we record separately on our consolidated balance sheets as funds receivable and amounts held on behalf of customers. The primary objective of our investment activities is to preserve capital and meet liquidity requirements without significantly increasing risk. We invest primarily in highly-liquid, investment grade debt securities, and we limit the amount of credit exposure to any one issuer. We do not enter into investments for trading or speculative purposes and have not used any derivative financial instruments to manage our interest rate risk exposure. Because our cash equivalents and marketable securities generally have short maturities, the fair value of our portfolio is relatively insensitive to interest rate fluctuations. Due to the short-term nature of our investments, we have not been exposed to, nor do we anticipate being exposed to, material risks due to changes in interest rates. A hypothetical 100 basis points increase or decrease in interest rates would not have had a material impact on our consolidated financial statements as of September 30, 2020.
As of September 30, 2020, we had floating-rate loans of $1,997.5 million, subject to LIBOR floors. As a result, we are exposed to the risk related to fluctuations in interest rates to the extent LIBOR exceeds the floors. As of September 30, 2020, a hypothetical 100 basis points increase in interest rates would not have had a material impact on our consolidated financial statements.
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What Makes Airbnb, Airbnb
A letter from Brian, Joe, and Nate
Thirteen years ago, Joe, Nate, and I created a company that was viewed at the time as an unlikely idea to work. Airbnb has always been a little different, and as we take our company public, we feel compelled to tell you a little more about what makes Airbnb, Airbnb.
We started writing this letter in March. Then the pandemic hit. When borders closed and travel stopped, our business declined by nearly 80%. We had to put our IPO on hold, and I don’t think many people expected us to go public this year. I know some people questioned if we’d make it at all. What has transpired since then has been our most defining period since we started Airbnb.
They say that a crisis has a way of revealing your true character. We would like to tell you about what this crisis revealed about who we are.
First, our model is inherently adaptable. Over the summer, after months of being stuck inside their homes, people were yearning to connect with their loved ones in a safe way. They decided to get in their cars and travel close to home, often staying in small towns and rural communities. Because we have millions of hosts who offer nearly all types of homes and experiences around the world, we were able to adapt to the new use cases guests wanted — from working remotely from another home, to taking extended trips with family and friends. Our business rebounded faster than anyone expected, and it showed that as the world changes, our model is able to adapt.
This crisis reinforced three truths that are even more core to who we are, and how we intend to operate for generations to come. As our prospective investors, we want to tell you about each.
Connection and belonging
When we started Airbnb, it was about more than just travel. In 2007, Joe and I were roommates in San Francisco, and we were trying to figure out how to pay our rent. That weekend, a design conference was coming to San Francisco and hotels were sold out, so we inflated three airbeds and turned our apartment into an Airbed & Breakfast. We hosted three guests — Michael, Kat, and Amol — and in doing so, we became the first hosts on Airbnb. Our guests arrived as strangers, but they left as our friends. The connections we made that weekend led Joe and I to realize, “Maybe there’s a bigger idea here!” Soon after, Nate joined, and we created a way for people around the world to be hosts, just like us.
Since then, we’ve grown from two hosts in San Francisco to a community of over four million hosts all over the world. On the surface, what people come to Airbnb for is a new way to travel, but below the surface, what they find on Airbnb is connection. They experience a deeper connection to the communities they visit and the people who live there. This connection is delivered by our hosts, and they provide guests with a deeply personal experience — after all, guests are welcomed in their homes, and they live in their communities.
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When the pandemic hit, we knew we couldn’t pursue everything that we used to. We chose to focus on what is most unique about Airbnb — our core business of hosting. We got back to our roots and back to what is truly special about Airbnb — the everyday people who host their homes and offer experiences. We scaled back investments that did not directly support the core of our host community.
This focus came at the right time. People are feeling increasingly disconnected in the world, and loneliness is pervading our society. The opposite of loneliness is belonging — the feeling of deep and genuine connection to a person, a place, or community. It’s the feeling of being “at home.” The feeling of being known and loved.
We are a community based on connection and belonging, and we will continue to design new ways to provide for it. We believe that we’ve only scratched the surface:
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We will prioritize the individual hosts who deliver it. |
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We will invest in building our community. |
As the world continues to change, people’s fundamental need for connection and belonging will not. This is what we will remain focused on.
Creatively-led
Airbnb was born with a creative spirit, much like the environment at the Rhode Island School of Design where Joe and I went to college together. We brought this creative spirit to Airbnb, and it’s one of the most defining parts of our culture. We use our curiosity and imagination to come up with unconventional solutions. In fact, starting Airbnb was in itself a creative act — the biggest ideas are often leaps of the imagination.
While we are dreamers, we are also pragmatic. At the center of being creatively-led is our design-driven approach. At Airbnb, design isn’t just how something looks, it’s how it fundamentally works. We sit at the intersection of art and science, a commitment that started when Nate, an engineer, joined Joe and me. We used this approach to design a system of trust that allows strangers to live together, and a unique business model that allows hosts to share in our success. And it’s this approach that will continue to enable us to create new products and services that deliver connection, even beyond travel.
It is said that constraints breed creativity, and during the crisis our creatively-led approach was drawn on time and again to come up with unconventional solutions. Here are just a couple of examples:
With the onset of social distancing, we had to pause our in-person Airbnb Experiences, but in a matter of two weeks, our team pivoted the product to become Online Experiences — creating a new type of interactive experiences that connect people from all over the world.
Most recently, as we prepared to take Airbnb public, we wanted to find a new way for our hosts to continue sharing in our success. Rather than design a moment-in-time perk that would have limited impact, we created the Airbnb Host Endowment, an entity that we are seeding with over nine million shares of Airbnb company stock in order to provide support for hosts for as long as Airbnb exists.
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These are just two examples of the dozens of creative solutions that this crisis brought about. We believe our creativity will allow us to continue designing new possibilities for people:
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We will use curiosity and imagination to create unconventional solutions. |
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We will take a unique, design-driven approach. |
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We will ensure creative people always have a seat at the table. |
Being creatively-led is core to who we are and how we will run Airbnb.
Responsibility to our stakeholders
Airbnb has always existed as a delicate balance between our five stakeholders — our guests, our hosts, the communities that we operate in, our employees, and our shareholders. In 2018, we set out to institutionalize our responsibility by defining a series of principles to serve each of our stakeholders. These principles were put to the ultimate test during the crisis.
When travel stopped and borders closed, our guests needed to cancel their reservations, many of which were non-refundable. In the face of the pandemic, we issued more than $1 billion in refunds guided by our extenuating circumstances policy. While this helped our guests, it created problems for our hosts — half of whom depend on their Airbnb income to pay their rent or mortgage. For our hosts, we committed to pay up to $250 million to those impacted by cancellations. To protect our shareholders’ investments, we significantly reduced our expenses and raised $2 billion in debt. When faced with the difficult decision to let many of our employees go, we focused on treating every employee with respect and compassion — providing generous severance packages and extensive job search support. And for the communities that we operate in, we partnered with thousands of hosts who generously offered their homes to nurses, doctors, and many others working on the front line of the pandemic.
There is an emerging focus in the business world on serving stakeholders. But there’s a false notion that to give to one, you have to take from another. While in the short run there may be trade-offs, in the long run, and when approached with creativity, we believe that we can design a win-win for all of our stakeholders:
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We will design for the long-term benefit of all stakeholders. |
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We will measure our progress for serving each of them. |
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We will adjust when we don’t get it right. |
Our responsibility to our stakeholders will continue to guide how we operate.
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These are the ideas at the core of Airbnb:
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Our community is based on connection and belonging. |
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Our creativity allows us to imagine new possibilities for people. |
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Our responsibility is to all of our stakeholders. |
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In the end, they all share a common thread — a fundamental belief that people are good and we’re in this together.
This is what makes Airbnb, Airbnb.
Thank you
A crisis brings you clarity about what is truly important.  We are thankful for everyone who stuck by us during our darkest hours.
Thank you to our employees — you have worked tirelessly day and night for our community and shareholders, often at great personal sacrifice.
Thank you to our investors — you invested in the seemingly impossible premise that strangers could live together, and you have stuck with us through thick and thin.
Thank you to our hosts and guests — without you, we wouldn’t even exist. You’ve proven to the world that people can, in fact, trust one another.
And finally, I would like to personally thank you, Joe and Nate, for being the best partners that I could ever ask for.
In the depths of this crisis, some people asked, “Is this the end of Airbnb?” It was not the end of Airbnb. In fact, it was just the beginning. It’s still early. We invite you to come on this journey with us.
Brian, Joe, and Nate
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We are eager to tell you the story of Airbnb. Before we start, we want to acknowledge the serious impact of the COVID-19 pandemic on people’s health, safety, and economic well-being. Given this backdrop, we feel incredibly fortunate to be able to tell our story. In it, we will explain how we are addressing today’s challenges, as well as how we are focusing on the opportunities ahead. Our goal is to build an enduring business, and we want to tell you about it, starting at the beginning.
The Beginning
Airbnb started with two designers trying to solve a problem: how to pay their rent.
The year was 2007. Brian and Joe — two of our founders and friends from design school — were looking for a way to cover the cost of their San Francisco apartment. That week, they saw an opportunity. An international design conference was coming to town, and every hotel was sold out. They quickly created a website, AirBedandBreakfast.com, with the hope of renting airbeds in their apartment to attendees of the conference. Three designers, Michael, Kat, and Amol, took them up on their offer and became the first guests of Brian and Joe, our first hosts.
When Brian and Joe told people what they were doing, they thought the idea sounded crazy. “Strangers will never stay in each other’s homes,” they said. But something unexpected happened that first weekend. Brian and Joe treated their guests like old friends from out of town, connecting them to a unique slice of San Francisco that they could never have experienced on their own. Michael, Kat, and Amol came as outsiders, but left feeling like locals. The experience left Brian and Joe feeling something special too — the excitement of sharing the city they loved and seeing their guests form a deep connection to it.
Brian and Joe started thinking: maybe there were more people like Michael, Kat, and Amol who would like to travel this way and more people who would like to host this way. These are the ideas that Airbnb was founded on.
In 2008, Nate, a software engineer, joined Brian and Joe, and together the three founders took on a bigger design problem: how do you make strangers feel comfortable enough to stay in each other’s homes? The key was trust. The solution they designed combined host and guest profiles, integrated messaging, two-way reviews, and secure payments built on a technology platform that unlocked trust, and eventually led to hosting at a global scale that was unimaginable at the time.
13 Years Later
Today, the idea does not seem so crazy after all. Our more than 4 million hosts now offer everything from a private room in their home to luxury villas, from one night to several months at a time. Hosting has expanded from homes to now include experiences that can be taken in cities all over the world, or even online. In more than 220 countries and regions around the world, our hosts have welcomed over 825 million guest arrivals and have cumulatively earned over $110 billion. “Airbnb” has become synonymous with one-of-a-kind travel on a global scale.
Looking back over the past 13 years, we have done something we hope is even more meaningful: we have helped millions of people satisfy a fundamental human need for connection. And it is through this connection that people can experience a greater sense of belonging. This is at the root of what brought people to Airbnb and is what continues to bring people back.
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A New Category
Travel is one of the world’s largest industries, and its approach has become commoditized. The travel industry has scaled by offering standardized accommodations in crowded hotel districts and frequently-visited landmarks and attractions. This one-size-fits-all approach has limited how much of the world a person can access, and as a result, guests are often left feeling like outsiders in the places they visit.
Airbnb has enabled home sharing at a global scale and created a new category of travel. Instead of traveling like tourists and feeling like outsiders, guests on Airbnb can stay in neighborhoods where people live, have authentic experiences, live like locals, and spend time with locals in approximately 100,000 cities around the world. In our early days, we described this new type of travel with the tagline “Travel like a human.” Today, people simply refer to it with a single word: “Airbnb.”
Hosting is at the Center
Hosting is the foundation of the Airbnb experience. Airbnb enables hosts to provide guests access to a vast world of unique homes and experiences that were previously inaccessible, or even undiscovered. The role of the host is about more than opening their door. A great host enables guests to find a deeper connection to the places they visit and the people who live there.
Our community of hosts started by sharing their spare bedrooms on Airbnb in a few large cities. Soon, hosts listed entire homes, cabins, treehouses, boats, castles, and luxury villas — practically any space that you could think of — in big cities, small towns, and rural communities in nearly every corner of the world.
Once there were millions of homes on Airbnb, we recognized that hosts could share not only their homes but also their interests and talents. From exploring graffiti art in New York to finding hidden jazz clubs in London, Airbnb Experiences offer authentic activities in over 1,000 cities around the world.
We believe that we have just scratched the surface of the opportunities that hosting provides. There are many more ways people will want to connect with each other and the world around them, and so we will continue to design and enable new ways to host. No matter what form it takes, hosting will be at the center of Airbnb.
Guests are Members of Our Community
Our hosts have welcomed hundreds of millions of guest arrivals through Airbnb. Our guests are not transactions — they are engaged, contributing members of our community.
Once they become a part of Airbnb, guests actively participate in our community, return regularly to our platform to book again, and recommend Airbnb to others who then join themselves. This demand encourages new hosts to join, which in turn attracts even more guests. It is a virtuous cycle — guests attract hosts, and hosts attract guests.
A Resilient Model
In early 2020, as COVID-19 disrupted travel across the world, Airbnb’s business declined significantly. But within two months, our business model started to rebound even with limited international travel, demonstrating its resilience. People wanted to get out of their homes and yearned to travel, but they did not want to go far or to be in crowded hotel lobbies. Domestic travel quickly rebounded on Airbnb around the world as millions of guests took trips closer to home. Stays of longer than a few days started increasing as work-from-home became work-from-any-home on Airbnb. We believe that the lines between travel and living are blurring, and the global pandemic has accelerated the ability to live anywhere. Our platform has proven adaptable to serve these new ways of traveling.
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And just as when Airbnb started during the Great Recession of 2008, we believe that people will continue to turn to hosting to earn extra income. In light of the evolving nature of COVID-19 and the uncertainty it has produced around the world, we do not believe it is possible to predict COVID-19’s cumulative and ultimate impact on our future business, results of operations, and financial condition. COVID-19 has materially adversely affected our recent operating and financial results and is continuing to materially adversely impact our long-term operating and financial results. However, we believe that as the world recovers from this pandemic, Airbnb will be a vital source of economic empowerment for millions of people.
Serving Our Stakeholders
Airbnb has five stakeholders and is designed with all of them in mind. Along with employees and shareholders, we serve hosts, guests, and the communities in which they live. We intend to make long-term decisions considering all of our stakeholders because their collective success is key for our business to thrive. Below, we will share more about our hosts, our guests, our communities, and how we serve them.
Our Hosts
Who are our hosts?
Airbnb’s hosts are the foundation of our community and business. It is their individuality that makes Airbnb unique. From schoolteachers to artists, our hosts span more than 220 countries and regions and approximately 100,000 cities, and 55% of our hosts are women. As of September 30, 2020, we had over 4 million hosts around the world, with 86% of hosts located outside of the United States.
Our hosts had 7.4 million available listings of homes and experiences as of September 30, 2020, of which 5.6 million were active listings. We consider a listing of a home or an experience to be an active listing if it is viewable on Airbnb and has been previously booked at least once on Airbnb. In 2019, 84% of our revenue resulted from stays with existing hosts who had completed at least one guest check-in on or before December 31, 2018. Our hosts largely come to us organically with 79% of our hosts coming directly to our platform to sign up to host in 2019. In 2019, we added more hosts than any year in our history with 23% of our new hosts first starting out as guests on Airbnb.
Our hosts generally fall into two categories: individual and professional. Individual hosts are those who activate their listings directly on Airbnb through our website or mobile apps. Professional hosts are those who run property management or hospitality businesses and generally use application programming interfaces to list their properties on our platform.
Individual hosts are the core of our host community. They come from all walks of life and list their spaces, including private rooms, primary homes, or vacation homes on Airbnb. Most could not have hosted easily without the tools we provide. As of December 31, 2019, 90% of our hosts were individual hosts, and 79% of those hosts had just a single listing. And as of December 31, 2019, 72% of our nights booked were with individual hosts. Professional hosts are property management companies, serviced apartment providers, and boutique hotels that leverage our platform and tools to run their hospitality businesses. These hosts expand the types of listings available to our guests. Of the reviews they received in 2019, 83% of ratings for individual hosts and 75% of ratings for professional hosts were 5-star.
Why do they host?
Our hosts have multiple motivations for hosting on Airbnb:
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Hosts can earn extra income. In a 2019 survey of hosts that we conducted, half of our hosts told us that the supplemental income they generated helped them afford to stay in their homes. For the |
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| twelve months ended September 30, 2020, the average annual earnings per host with at least one check-in on Airbnb was $7,900. Hosts keep the vast majority of what they charge guests, and hosts have collectively earned more than $110 billion since our founding in 2008. |
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Hosts can connect guests to their communities. In the same survey, of the hosts who made recommendations, 87% said that they recommend local restaurants and cafes to their guests, and 82% said they recommend businesses that are locally owned. In that same survey, 32% of hosts cited meeting and connecting with people as one of the reasons that they choose to host on Airbnb. Hosts also connect with each other to share best practices for hosting, and as of December 31, 2019, hosts had organized 349 host clubs around the world to do so. |
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Hosts can share their skills and passions. Airbnb Experiences allow our hosts to not only share their homes with guests, but also their skills and passions by offering authentic activities in over 1,000 cities around the world. |
What do we provide our hosts?
Airbnb is more than just a distribution channel — we are an enablement platform for our more than 4 million hosts. We have designed our platform to empower anyone to become a host and give them what they need to be successful and deliver a high quality experience.
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Global demand. Because of strong demand from guests around the world, for active listings in 2019 that were new to our platform, 50% received a booking within 4 days of becoming available, and 75% received a booking within 16 days of becoming available. |
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Activation and merchandising. Our product makes it easy for a new host to create, activate, and merchandise their new listing. Through a step-by-step product flow, we help hosts describe their listing, including providing bedroom and bathroom counts, selecting available amenities, and uploading photos in order to collect information that allows us to merchandise their listing and attract guests. We also provide recommendations and tools for hosts to attract incremental demand, for example by suggesting that they offer discounts on longer stays and promoting these discounts to guests. |
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Pricing. While hosts set their own prices, we provide hosts with Smart Pricing tools that suggest prices for their listings based on changes in demand for similar listings. Our Smart Pricing recommendations are based on the type and location of a listing, the season, expected demand, and other factors. In addition, we provide data insights that include how host occupancy rates compare to other listings on our platform. |
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Scheduling. Hosts can easily manage their calendars and accept, track, and manage their upcoming reservations on our website and mobile apps. Availability preferences allow hosts to have full control of their calendars, including determining the advance notice window required for a booking and preparation time between bookings. Hosts can select our Instant Book feature to improve their search results and to increase demand, while setting requirements, including an uploaded government ID and prior reviews from other hosts, for guests to use this feature. |
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Payments. We facilitate all payments on our platform: collecting payments from guests and processing payments to hosts. In 2019, we processed approximately $70 billion of guest and host transactions in over 40 currencies across more than 220 countries and regions. Our platform allows our guests to pay and our hosts to be paid in their local currency or payment method of choice. Our payments capabilities are unique in our industry in their global reach and critical to enabling individual hosts to participate on our platform. We also provide tools to hosts to manage and track their earnings, |
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| including amounts paid and expected to be paid. In certain jurisdictions and where permitted by local governments, we also collect and remit lodging taxes. |
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Community support. We have a global community support team that offers 24/7 assistance in English and Mandarin, real time voice support in 11 languages during business hours, live chat in 8 languages, and text support in over 20 languages to help with issues that arise before, during, or after a stay or experience. |
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Host protections. Our Host Guarantee Program provides property damage protection of up to $1 million for every listing. Our Host Protection Insurance and Experience Protection Insurance provide liability coverage to hosts of up to $1 million per occurrence in the event of third-party claims of personal injury or property damage. Our Host Protection Insurance covers landlords and homeowner associations when guests stay at their locations. Our Trust and Safety initiatives also include risk scoring, watchlist and background checks, fraud and scam prevention, secure messaging, secure payments, and minimum age requirements. |
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Reviews and feedback. Guests review hosts following their stays and experiences and provide hosts with feedback to enhance future stays and experiences, including specific data points like cleanliness, ease of check-in, and host engagement. Our hosts also have the opportunity to review their guests following the end of a stay or experience. Our platform builds trust by enabling hosts and guests to learn from each other through these reviews. |
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Superhost program. Our Superhost program recognizes our most active and high-quality hosts. Superhosts typically enjoy higher occupancy rates because guests value the hospitality, quality, and reliability they offer. To become a Superhost, a host must have hosted at least 10 stays in the past twelve months or had 3 reservations that total at least 100 nights, responded to 90% of new messages within 24 hours, and maintained a cancellation rate of less than 1% and an overall guest rating of at least 4.8 out of 5-stars. As of September 30, 2020, approximately 850,000, or 21%, of our 4 million hosts had achieved Superhost status. Of the reviews our Superhosts received in 2019, 88% were 5-star ratings. |
Many of our hosts could not host easily without the tools we provide. We continue to invest in our host community — through the development of new tools, training and education, reward and recognition programs, and community forums to build host-to-host connections and support.
How did COVID-19 impact our hosts?
Many of our hosts have been severely impacted by COVID-19, with increased cancellations and a drop in bookings. Despite the impact of COVID-19 on host earnings and our business, as of September 30, 2020, our host and active listing counts are stable since the end of 2019. We believe the stability in our active listings highlights the resilience of our business model, which does not require investment in fixed assets and real estate. In addition, according to a survey we conducted in May and June 2020, 9 out of 10 hosts surveyed said that they intend to continue hosting at least as often as before the COVID-19 pandemic when and where it is safe to do so.
Host Endowment Fund
We have established a Host Endowment Fund that is designed to allow our hosts to share in the success of our business. The goal of the Host Endowment Fund is to support and benefit our host community through a variety of potential programs, initiatives, and grants. We want hosts to share in our success, not merely for a single moment in time, but for as long as Airbnb exists in the world. We intend the Host Endowment Fund to be a long-term investment in the future of our host community, to be shaped by hosts for hosts. For additional information, see the section titled “Description of Capital Stock — Host Endowment Fund.”
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Our Guests
Who are our guests?
From young people to retirees, our guests come from a range of cultures and places. They seek everything from budget stays to luxury accommodations in large cities to remote villages. What they often have in common is a curiosity about the world and open-mindedness to other people and cultures. While Airbnb is popular across people of all ages, we are particularly strong with younger travelers: as of September 30, 2020, the majority of our guests who have ever made a booking on Airbnb were between the ages of 18 and 34. Our high level of guest satisfaction is evidenced by 82% of guest reviews during the twelve months ended September 30, 2020 having a 5-star overall rating.
In 2019, 54 million active bookers worldwide booked 327 million nights and experiences on our platform, and since our founding, there have been over 825 million guest arrivals on Airbnb. Guest arrivals represent an individual and all co-travelers included on a reservation for a stay for completed check-ins during a given period. Because an individual guest may take more than one trip in a measurement period for guest arrivals, such guest will be counted separately for each check-in when calculating total guest arrivals for a period. In comparison, a check-in represents a check-in event for a single reservation for a stay or experience, regardless of the number of travelers or experience participants.
Most of our guests discover Airbnb organically, with approximately 91% of all traffic to Airbnb coming through direct or unpaid channels during the nine months ended September 30, 2020. Guests are highly engaged and contribute value for hosts and other guests: over 68% of guests left reviews of their stays in 2019, and collectively, hosts and guests have written more than 430 million cumulative reviews as of September 30, 2020. Many of these guests return to our platform; during 2019, 69% of our revenue was generated by stays from repeat guests.
Why do guests choose Airbnb?
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Guests can be hosted. Whether guests stay with a host or have a home all to themselves, they can experience the cities they visit the same way locals do, benefiting from the hospitality and local knowledge that our hosts offer. For guests, this creates a connection to the places they visit and the people they meet. This can ultimately foster a sense of belonging. |
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Guests can visit real neighborhoods. From visiting local neighborhood coffeehouses, shops, grocers, restaurants, bakeries, parks, hikes, and bike paths, guests can feel like part of a local community and discover a world right outside their door. Having many locations to choose from allows guests to be closer to where they need to be, whether it is visiting family, being close to a hospital, or near a specific site of interest. In a survey of more than 19,000 guests in the United States that we conducted in 2019, 74% of guests said that their desire to explore a specific neighborhood was part of their decision to use Airbnb. |
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Guests can stay in unique spaces. We believe we offer more unique homes than any other platform and that the majority of our listings, from igloos to treehouses and castles to boats, are only available on Airbnb. |
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Guests can feel at home. Spaces on Airbnb have all the amenities of a place you can call home. Hosts can offer guests homes of all sizes with spacious backyards, washing machines, comfortable living rooms, fully-stocked kitchens, and even pools and book collections. |
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Guests can find superior value. Based on our survey data, a majority of guests tell us they choose Airbnb to save money while traveling. Airbnb listings are often less expensive relative to average hotel |
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| prices in the same city. In addition, listings on Airbnb often provide greater value through more space and amenities, such as kitchens, than options like chain hotels that typically provide only single rooms. |
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Guests can take any type of trip. From nearby stays to international vacations, family gatherings to corporate meetings, and weekend getaways to multi-month stays, Airbnb offers a wide range of accommodations for all types of trips. In 2019, 39% of nights were from stays of at least 7 nights, and 14% of nights were from stays of at least 28 nights. In 2019, the average number of guests on an Airbnb stay was 3 people, and 77% of nights were booked for entire homes. |
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Guests can stay anywhere. Our hosts offer listings for guests in approximately 100,000 cities, many of which are not served by hotels. As of September 30, 2020, over 1,000 cities had more than 1,000 Airbnb listings. And according to a report that we commissioned in 2018, even in popular destinations, at least two-thirds of our guest arrivals take place outside of traditional tourist districts. |
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Guests can have authentic experiences. From making handmade pasta in Rome to studying music history in Havana, Airbnb Experiences offer tens of thousands of experiences in communities around the world. Each Airbnb Experience is authentic, unique, and personal, as only a select number of people can participate at a time — Airbnb Experiences typically host a maximum of 6 to 10 people. Our hosts connect with our guests, sharing their passions, cultures, and skills. These activities also appeal to guests seeking experiences in their own cities (i.e., while not traveling). |
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Guests can rely on a trusted platform. The Airbnb platform allows guests to find the listings that meet their needs and preferences and book with ease. Guests can leverage our secure global payments platform to pay any host, in all countries in which we operate and in all major currencies. In addition, guests benefit from our community support team that is available to help with issues arising before, during, or after a stay or experience and our trust innovations that are designed to protect both hosts and guests on our platform. Guests can rely on reviews to give them confidence about what they are booking as well as our guest refund policy, which assures guests that Airbnb will rebook or refund a guest if a listing does not meet our hosting standards. |
How did COVID-19 impact our guests?
Many of our guests have been unable to travel during the COVID-19 pandemic. Despite this, demand from guests has grown for nearby stays, working remotely, and long-term stays, and we believe the way people travel will fundamentally change. Since the pandemic started, we have seen guests turn to Airbnb for new use cases, such as living closer to family, living nomadically, and remote schooling. In a survey that we conducted in March 2020, three out of four guests said they would be more comfortable staying with their families in an Airbnb listing than in a hotel with other people.
Guests continue to come to Airbnb to search for travel. In September 2020, direct and unpaid traffic increased on an absolute basis relative to September 2019 and accounted for 93% of our total traffic in the third quarter of 2020 due to our reduced marketing spend.
Our Communities
In 2007, we began with a single listing on Rausch Street in San Francisco’s SOMA district. Today, Airbnb operates in approximately 100,000 cities, ranging from large cities to small towns and rural communities, in more than 220 countries and regions around the world. Our business is intertwined with these communities, and we are focused on seeing them thrive.
Airbnb has a presence in nearly every corner of the world, and many of the approximately 100,000 cities where our hosts have listings do not have traditional hotels or well-known tourist attractions. In 2011, there
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were 12 cities with more than 1,000 Airbnb listings each; as of September 30, 2020, over 1,000 cities had more than 1,000 Airbnb listings each.
Similarly, in 2011, only one city welcomed over 100,000 guest arrivals on Airbnb. In 2019, more than 350 cities each welcomed over 100,000 guest arrivals, including Bandung, Indonesia; Barcelona, Spain; Cuernavaca, Mexico; Sofia, Bulgaria; Ubatuba, Brazil; Albuquerque, New Mexico; and Johannesburg, South Africa.
How do we serve the communities in which we operate?
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We create economic stimulus. Between host income and guest discretionary spending, we believe the majority of the economic activity on Airbnb remains in the neighborhoods where guests stay. Hosts generally keep up to 97% of what they charge, and according to a 2019 survey of our host and guest community with more than 84,000 guest responses, 43% of guest spending occurred in the neighborhoods where they stayed. Based on a 2019 survey that we conducted in 30 countries and regions, our direct economic impact in these countries from host earnings and guest spending was in aggregate nearly $117 billion in 2018 alone. |
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We are committed to being good partners. We are guided by core principles, formalized by the Airbnb Community Compact, to treat each city personally, promote responsible hosting, and help ensure that our community pays its fair share of taxes. We have invested in creating tools to help cities to more effectively enforce their regulations, and we have worked with thousands of local regulators, policymakers, and other local leaders to engage with the communities in which we operate. This engagement typically involves meetings between hosts and their elected representatives. Finally, we have created an Office of Healthy Tourism within Airbnb that is dedicated to supporting tourism that is more local, diverse, and sustainable than mass tourism. |
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We offer support in times of crisis. In 2012, a host was inspired to offer her space for free to people needing shelter after Hurricane Sandy. Moved by her compassion, we created a broader program through which hosts offer their spaces and we waive our service fees. Since then, hosts in 99 countries have housed more than 75,000 people recovering from natural disasters, international refugees, or more recently, frontline responders during COVID-19. Nonprofit partners like the International Rescue Committee, United Nations High Commissioner for Refugees, International Federation of Red Cross and Red Crescent, and the Hebrew Immigrant Aid Society advise the program and support people in need of accommodation. Our initiative will continue to support emergency response. In addition to annual funding by Airbnb, hosts are able to optionally donate a portion of their earnings to the program, and community members can make donations through our platform, to help house those in times of crisis. |
Our Strengths
We have six core strengths that helped Airbnb create a new category and give us a competitive advantage:
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Unique host community. The more than 4 million hosts in our community are as unique as the homes and experiences they share. Hosts come to our platform organically, offering stays and experiences in nearly every community around the world. We attract new hosts through our community — hosts recruit hosts, and guests often become hosts. 23% of our new hosts in 2019 were guests on our platform first. We believe they offer more unique homes than any other platform and that the majority of our listings are only available on Airbnb. These 5.6 million active listings offer spaces for |
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| every occasion and stay length and include approximately 90,000 cabins, 40,000 farms, 24,000 tiny homes, 5,600 boats, 3,500 castles, 2,800 yurts, 2,600 treehouses, 1,600 private islands, 300 lighthouses, and 140 igloos. |
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Engaged guest community. Our hosts have welcomed hundreds of millions of guest arrivals through Airbnb, and guests have become engaged members of our community. They often come directly to our platform, actively participate in our community, and return regularly to book again. Strong word of mouth helps drive organic traffic directly to our website and mobile apps. Our guests contribute back to our community, with 68% of them leaving reviews for their stays in 2019. 69% of our revenue in 2019 was generated by stays from repeat guests, compared to 66% in 2018. |
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Globally recognized brand. Our brand is recognized globally, and it is one of our most valuable assets. “Airbnb” is used as a noun and a verb in countries all over the world, and our brand is already deeply embedded in pop culture. According to Google Trends, from January 2016 through September 2020, “Airbnb” was searched worldwide more often than any other major travel brand. The power of our brand attracts people directly to our website and mobile apps. During the nine months ended September 30, 2020, approximately 91% of all traffic to Airbnb came organically through direct or unpaid channels. |
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Global network. Hosts and guests attract each other to Airbnb, creating a global network across more than 220 countries and regions. Our global network has allowed us to expand without the need to deploy local operations in each city where we operate. Our early strength in cross-border travel allowed us to enter new markets, where we were then able to grow domestic travel. As our network grew, new hosts joined, which in turn attracted even more guests. While COVID-19 has diminished cross-border travel, we believe that our global network will remain a key advantage as guests seek to travel closer to home and ultimately return to international travel. |
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Custom-built platform. Our technology platform was built for the unique needs of our hosts and guests. For hosts, we offer global demand, activation and merchandising, pricing recommendations, scheduling, integrated payments, community support, host protections, reviews and feedback, and a Superhost program. Our payments capabilities are unique in our industry in their global reach and critical to enabling individual hosts to participate on our platform. For guests, Airbnb’s website and mobile apps provide an engaging way to explore a vast world of unique homes and experiences and an easy way to book them. We enable customizable wishlists, in-app messaging, and an easy way to leave reviews. We support 62 languages and dialects to ensure that our platform is localized for our hosts and guests around the world. Our robust platform supports sophisticated anti-fraud measures, multilingual real-time community safety and support, and city-specific regulatory requirements. Our platform allows us to more quickly adapt to the needs of our hosts and guests around the world and delivers deep business intelligence insights to help us manage our marketplace. |
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Design-driven approach. Since the beginning, design has been at the core of everything we do. It has enabled us to create a new category, design for trust between hosts and guests, and create simple interfaces to make our products delightful and easy to use. Our expertise in design has always driven us to innovate and create something differentiated — product features, expanded possibilities for hosts and guests, and more ways for people to connect. |
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Our Long-Term Growth Strategy
Our strategy is to continue to invest in our key strengths:
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Unlock more hosting. In order to have enough selection for guests booking on our platform, we will continue to invest in growing the size and quality of our host community. We plan to attract more hosts globally and expand new use cases such as long-term stays. We will support emerging travel trends, such as local travel and remote working, and design new ways to host. Finally, we will continue to increase the support we provide our hosts to deliver high-quality stays and experiences for guests. We plan to design new tools and services and to offer comprehensive host training and education, partnering with hosts to teach the art and science of great hosting. We believe that we have just scratched the surface of the opportunities that hosting can provide. |
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Grow and engage our guest community. We intend to attract new guests to Airbnb and convert more of them into brand advocates. We will continue to focus on engaging our existing guests to return to book and to use Airbnb with more frequency. With new behaviors evolving during the COVID-19 pandemic, we imagine the way that people approach work, living, and travel will fundamentally change. We believe there will be opportunities to create products based on these new behaviors and attract more guests to our platform. Finally, we plan to develop new ways for our guests to connect with each other and to contribute back to Airbnb. |
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Invest in our brand. In 2019, while we had 247 million guest arrivals, we still only accounted for 3.8% of the estimated 6.5 billion overall domestic and international paid overnight trips that year. We intend to invest more deeply in our brand to educate new hosts and guests on the benefits of Airbnb and the uniqueness of our offering. We also intend to leverage our brand by creating a cohesive and integrated marketing strategy punctuated by product launches that introduce new features to our community and prospective hosts and guests. |
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Expand our global network. We plan to expand our global network in the countries in which we already have a deep presence, as well as to expand into markets where our penetration is lower, such as India, China, Latin America, Southeast Asia, and tens of thousands of smaller markets and remote areas around the world. We will make Airbnb more accessible in more places by further localizing our product, and we will partner with communities to update laws and regulations for short-term rentals to allow more hosts to participate. As we attract more hosts, even more guests are likely to come to Airbnb, attracting even more hosts. Finally, we plan to continue to invest in our brand in China, Aibiying ( ), to better serve our Chinese hosts and guests. |
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Innovate on our platform. We will innovate both the online and in-person experiences for our hosts and our guests. Our innovation will be focused on improving our host and guest experience, making Airbnb more accessible and appealing for new hosts and guests and driving increased engagement and loyalty with our existing community. |
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Design new products and offerings. We will design new opportunities for connection. As the world continues to change, we will continue to bring together new technologies with our design expertise to expand possibilities for our hosts and offer new experiences for our guests. We will increase the capabilities of our website and mobile apps while bringing an innovative approach to designing host and guest interfaces in our products. |
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Our Strategy for Adapting to COVID-19
We believe that the COVID-19 pandemic reinforced that travel is an enduring human desire, even in the face of challenges. People have increasingly sought travel options closer to home during COVID-19, and Airbnb’s offerings are well suited to adapt to this changing dynamic. We offer all types of accommodations, allowing guests to find spaces suited to their individual needs under these circumstances. We have worked closely with our hosts, guests, and communities to prioritize and support safe and responsible travel during these challenging times and have adapted our offerings for changing trends in travel and experiences:
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Local travel. We have seen increases in domestic and short-distance travel, with more guests gravitating toward Airbnb stays within driving distance of their homes. Tapping into this demand, we updated our website and mobile apps to actively promote available local and non-urban stays so guests can find something that fits their unique needs for location and desired length of time. |
Nearby Merchandising Editorial Content Nearby Map & Inventory Timely merchandising campaigns focus on helping travelers find interesting, relevant options within driving distance. Long-form editorial pieces act as inspiration and help set Airbnb up as an authority on where to go and what to do there. Destination-first results help people explore what's around them, even when they don't know exactly where to go yet.
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Supporting hosts and guests. During the COVID-19 pandemic, we applied our extenuating circumstances policy to a significant number of impacted reservations. This policy allows hosts and guests to cancel reservations that are disrupted by epidemics, natural disasters, and other emergencies. To support our hosts and lessen the impact of cancellations under this policy, we |
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| committed up to $250 million for hosts impacted by COVID-19 and an additional $17 million fund for Superhosts, the majority of which was distributed as of September 30, 2020. The eligible reservations for the $250 million host program were defined as reservations made on or before March 14, 2020 with a check-in date between March 14, 2020 and May 31, 2020. For these reservations, eligible hosts are entitled to receive 25% of the amount they would have received from guests under the host’s cancellation policies. |
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Cleaning. We have developed enhanced cleaning standards to support hosts and guests looking to travel safely and responsibly. These standards were created in partnership with leading experts in hospitality and medical hygiene and include a five-step cleaning process and room-by-room checklists. |
Our Global Enhanced Cleaning Mandate We require every host to agree to wear a mask, practice social distancing with guests, and commit to our expert-backed 5-step enhanced cleaning process. Enhanced Cleaning Education & Support We provide a cleaning education hub, handbook (translated i every host has the clarity andnto 62 languages), and easy access to supplies so support they need. "Enhanced Clean" Highlight As elevated the extra safety measures hosts were taking to the most prominent spot on the page.Our Global Enhanced Cleaning Mandate We require every host to agree to wear a mask, practice social distancing with guests, and commit to our expert-backed 5-step enhanced cleaning process. Enhanced Cleaning Education & Support We provide a cleaning education hub, handbook (translated i every host has the clarity and into 62 languages), and easy access to supplies so support they need. "Enhanced Clean" Highlight As elevated the extra safety measures hosts were taking to the most prominent spot on the page.
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Partnering with communities. We are working with a variety of destination marketing organizations, which are groups that promote travel in a particular city or region, to help market their communities to guests and who can in turn help stimulate local economies. We continue to operate the Frontline Stays initiative, where hosts have opted in to provide over 200,000 places to stay for COVID-19 first responders and healthcare workers. |
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Online experiences. We launched Airbnb Online Experiences in April 2020 to allow our hosts to offer experiences online while in-person activities were paused due to COVID-19 restrictions. In-person experiences restarted in mid-June, beginning with countries where it was safe to do so based on guidance from health experts and local governments. |
interactive and Completely Online Amazing Hosts Curated for Quality Online Experiences are the perfect date night, family activity, or team offsite while many of us are staying home. From Olympic athletes to pasta-making Nonnas, Online Experiences showcases an amazing range of passionate hosts. Every experience is vetted for host expertise, insider access, and connection.
Going forward, we believe new behaviors will emerge from this crisis. After a prolonged period of time working remotely, for some, work-from-home will become work-from-any-home, and the line between traveling and living will blur. The once-a-year, two-week vacation will be stretched into extended stays, and people will want to feel connected to the new communities they stay in. And after continued time spent in isolation, people will yearn for human connection and new experiences. We will be designing for this new world.
Our Market Opportunity
We have a substantial market opportunity in the growing travel market and experience economy. We view our opportunity in terms of a SAM, which we believe we address today, and a TAM, which we believe we can address over the long term. These numbers correspond to our GBV on which we collect fees that are recognized as our revenue.
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We estimate our SAM today to be $1.5 trillion, including $1.2 trillion for short-term stays and $239 billion for experiences. To arrive at our short-term stays market size, we use our own estimates based on available regional data on overnight paid trips, nights per trip, and ADR. We use Euromonitor estimates of tourist spend on attractions and experiences, including spas but excluding casinos, to estimate the size of our experiences SAM of $239 billion. We define short-term stays as stays on our platform of fewer than 28 nights and long-term stays as those of at least 28 nights. Although 14% of nights booked in 2019 and 24% for the nine months ended September 30, 2020 were for long-term stays, we have excluded long-term stays from our SAM to provide a more conservative view of our near-term opportunity.
We estimate our TAM to be $3.4 trillion, including $1.8 trillion for short-term stays, $210 billion for long-term stays, and $1.4 trillion for experiences. For short-term stays, we assume an increase in trips per capita in line with expected travel market growth. For long-term stays, we calculate that we can address our estimate for the entire $48 billion global serviced apartment market and 10% of the $1.6 trillion global residential rental market, or $162 billion. For experiences, we add $1.1 trillion of non-tourist recreational spend, as estimated by Euromonitor, to the $239 billion of experience spending by tourists included in our SAM. Our business and our market opportunity is global. We estimate that our $3.4 trillion TAM includes $1.5 trillion in the Asia Pacific region, $1.0 trillion in EMEA, $0.7 trillion in North America, and $0.2 trillion in Latin America.
We have estimated key components of our SAM and TAM using 2019 actual figures and believe our market opportunity can grow over the long term at the rate of travel spending. In a November 2019 report, The World Travel and Tourism Council estimated that travel spend will grow at a 3.5% compounded annual growth rate from 2019 to 2030. We have estimated our TAM using data for 2019, and therefore no statistics and estimates reflect the impact of the COVID-19 pandemic on the travel market. While the current travel market remains unpredictable, we believe estimates made prior to the COVID-19 pandemic to be the best representation of our long-term travel opportunity.
Nights SAM and TAM
Our nights opportunity includes short-term and long-term stay accommodations spending for both leisure and business travel in more than 220 countries and regions around the world. To arrive at our market opportunity size, we use several calculations based on third-party data where available, and where not available, we use our own estimates based on our experience in the travel market. Estimates for our TAM are based on our belief that new travel behaviors will expand our market opportunity over time.
To calculate our SAM, we use the Euromonitor estimate of 14.3 billion overnight trips worldwide in 2019. This includes domestic trips with the destination and origin in the same country and international trips. We
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use Euromonitor’s estimated business and leisure overnight trips, data from the UNWTO, and our own assumption regarding the share of business and leisure trips that are paid in order to determine paid overnight trips. We estimate that all business trips, 25% of domestic leisure trips, and 69% of international leisure trips involve paid accommodations. Based on this, we have estimated the number of overnight trips that occur in paid accommodations to be 6.5 billion, 45% of the 14.3 billion overnight trips.
As illustrated in Table 1, we calculate a nights SAM of $1.2 trillion based on our estimate of 6.5 billion overnight paid trips in 2019. To calculate our nights SAM, we have assumed 2.5 nights per trip for domestic trips and 4.0 nights per trip for international trips based on historical activity on our platform and using Euromonitor’s estimated mix of business and leisure trips. We used data from STR reports to derive the regional ADR figures used in our estimates.
Table 1: Nights SAM
| (in billions, except ADR) | ||||||||||||||||
| Overnight Paid Trips |
Room Nights |
ADR | SAM | |||||||||||||
| Domestic Stays |
5.4 | 9.1 | $ | 102 | $ | 933 | ||||||||||
| International Stays |
1.1 | 2.7 | $ | 116 | $ | 315 | ||||||||||
| Total |
6.5 | 11.8 | $ | 105 | $ | 1,248 |
In Table 2, we illustrate the increase in short-term stays from our SAM to our TAM, driven both by the growth in the number of annual trips taken per person over the next 11 years as well by an increase in the population. We calculate that the average global overnight paid trips per capita was 0.84x in 2019 and will grow to 1.11x by 2030. We estimate this using population data from the United Nations Department of Economic and Social Affairs and forecast travel spend to 2030 according to The World Travel and Tourism Council. In a 2018 survey of our guests, 74% responded that Airbnb is best for trips to explore new areas, and we believe a portion of nights on our platform were for trips that guests would not have taken without Airbnb. We believe that trend will continue and that Airbnb will help to grow the broader travel market as well as the number of trips per capita taken globally. With this increase in trips per capita as well as growth in the population, we arrive at a market size of $1.8 trillion. To calculate the number of short-term stays used in our TAM calculation, we use the same assumptions as in our SAM calculation for the split between domestic and international trips, business and leisure trips, and regional ADR estimates.
Table 2: Expansion of Short-Term Stays
| (in billions, except per capita information) | ||||||||||||||||
| Overnight Paid Trips |
Population |
Trips per Capita |
Spend | |||||||||||||
| 2019 |
6.5 | 7.7 | 0.84x | $ | 1,248 | |||||||||||
| 2030 |
9.5 | 8.6 | 1.11x | $ | 1,826 |
In addition to increasing the number of trips in our nights TAM, we believe we can address the broader long-term stay market through our community of hosts. We believe we can address the global serviced apartments market through our platform, which we value at $48 billion using data on the number of global serviced apartments from the Apartments Service and our global blended ADR assumption. Additionally, The Business Research Company has estimated that the global real estate rental expenditure on residential buildings and dwellings will be $1.6 trillion in 2020. In 2018, 13% of nights booked on Airbnb were for stays 28 days or longer. In 2019, 14% of nights booked on Airbnb were for stays 28 days or longer, growing to 24% for the nine months ended September 30, 2020. While there is no third-party data available
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to estimate the size of the market for long-term stays, we believe that we can address 10% of the global real estate rental market, or $162 billion, with long-term stays on our platform. With these components, we calculate our incremental long-term stay TAM to be $210 billion. Table 3 illustrates the components of our nights TAM.
Table 3: Nights TAM
| (in $ billions) | ||||
| Short-Term Stays |
$ | 1,826 | ||
| Serviced Apartments |
48 | |||
| Addressable Rent Spend |
162 | |||
|
|
|
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| TAM |
$ | 2,036 |
Experiences SAM and TAM
We define our experiences SAM as $239 billion of spend by travelers on attractions, including spas but excluding casinos in 2019. We believe we can continue to expand our platform use cases to enable people to discover and explore their own cities through Airbnb. Accordingly, we define our experiences TAM as our experiences SAM plus the addition of $1.1 trillion of spend from local residents on recreational and cultural attractions including sporting events, amusement parks, summer camps, and more. This results in an experiences TAM of $1.4 trillion, based on Euromonitor estimates for 2019 spend.
Our Market Opportunity Note: The figures presented in these tables and chart may not sum from components due to rounding. In addition, all Euromonitor figures represent 2019 historical actuals, in current prices from Euromonitor International, Travel 2021 edition, population data was sourced from World Population Prospects: The 2017 Revision, by the United Nations Population Division, Department of Economic and Social Affairs, June 2017, and UNWTO data was sourced from World Tourism Organization (2019), International Tourism Highlights, 2019 Edition, UNWTO, Madrid © UNWTO, 92844/17/20. Used with the permission of the United Nations.
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Our Platform
Our Platform for Hosts
Hosts have a variety of needs, and we are focused on designing solutions to serve them. We built our platform to seamlessly onboard new hosts, especially those who previously had not considered hosting. We partner with hosts throughout the process of setting up their listing and provide them with a robust suite of tools to successfully manage their listings, including scheduling, merchandising, integrated payments, community support, host protections, pricing recommendations, and feedback from reviews. We are constantly innovating our platform to deliver new tools and services to make hosting easier and empower hosts to earn income doing what they love.
Discover Hosting List Your Space Get Pricing Help We show potential hosts how much they can earn, the ways we'll support them, and how to get started listing their space. Hosts describe their space, add photos, and choose their booking settings. We share tips every step of the way. We offer tools that automatically adjust hosts' prices based on demand in their area, helping them to get more bookings.
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Choose When to Host Track local trends Get Feedback Hosts use the calendar to open dates for guests, block dates from getting booked, and set custom pricing if they like. We surface key data and insights, informing hosts how to update their settings and amenities to attract more guests. We share guest reviews with hosts, suggest ways to improve, and give them support to build their business.
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Our Platform for Guests
Airbnb’s website and mobile apps provide our guests with an engaging way to explore a vast world of unique homes and experiences and an easy way to book them. Whether they are traveling locally or internationally, for work or for pleasure, for a few nights or a few months, guests can find homes that meet their personal preferences and needs. For guests looking for one-of-a-kind activities in the places they are traveling to, or in the communities where they live, a world of experiences is now at their fingertips. We enable customizable wishlists for guests in the planning stage of travel, in-app guest-to-host messaging before, during, and after a trip, and an easy way to leave reviews that contribute back to the Airbnb community.
Homepage Search Stays Our homepage showcases inspiring, browsable content that highlights the product's range, and shows off the best of our inventory. Location-first search gets our guests right to the inventory they're looking for. Inventory can be browsed through an interactive map or listing cards with photos and other details.
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Listings Wishlists Checkout The listing for each stay tells potential guests everything they need to know through photos, reviews from past guests, and more. Wishlists let people plan trips collaboratively or save their favorite finds for later. Airbnb follows the highest global security standards for payment processing and supports 40 currencies. Guests review trip details and pay all on one simplified screen.
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Map & Inventory Search Filters listings In addition to the map and listing cards, experience search results can also be browsed by category, like "Cooking" or "Yoga." A tight set of filters help people find the right type of experience. Airbnb also offers custom filters for companies looking to book group outings or offsites. Each experience's listing helps potential guests get to know their host through videos and other engaging content.
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Reservation details Messaging Reviews Everything a guest needs to know before, during, or after their trip is stored on one clear, easy-to-follow page. Airbnb's messaging tool lets guests ask questions, get to know their host , and easily coordinate things like check-in and directions. Reviews are core piece of Airbnb's platform. They help other guests find the right fit (and let hosts know what they're doing well, and what they could do better.) On Your Trip
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Our System of Trust
One of our core innovations has been the design of a system that allows millions of strangers to trust one another. Hosts and guests have the ability to communicate before booking, pay through our secure payments platform, and post reviews after their stays or experiences. Our trust team works to protect our community by deploying risk scoring, fraud detection, screening, verification, and other technologies and processes that vary depending on the region. Our trained safety agents are available should our hosts and guests need to reach us, and we offer additional support to our community through our Host Guarantee, Host Protection Insurance, and Experience Protection Insurance.
Through our trust innovations, our goal is to make Airbnb stays and experiences safe for hosts, guests, and communities. For the twelve months ended September 30, 2020, only 0.137% of stays and experiences on Airbnb had a safety-related issue reported by a host or guest. Over that same period, only 0.053% of stays had a significant claim of $500 or higher paid out for property damage under our Host Guarantee Program.
The system for trust that we have designed includes the following components:
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Reviews. After every stay and experience, hosts and guests have the opportunity to post a review. Reviews are only made public once both hosts and guests have had a chance to complete their reviews or the review period expires in order to promote honesty in the process. As of September 30, 2020, our hosts and guests had written more than 430 million cumulative reviews, and during 2019, 85% of all stays had at least one review by a host or a guest. |
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Secure messaging and account protection. We take a number of measures designed to safeguard host and guest Airbnb accounts and to ensure secure messaging between hosts and guests, including requiring multi-factor authentication when a login is attempted from a suspicious device and sending account alerts when certain changes are made. |
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Risk scoring. We use predictive analytics and machine learning to evaluate hundreds of signals that help us flag and investigate fraudulent accounts, potential account takeovers, credit card fraud, or other suspicious activity as part of our ongoing efforts to try to stop bad actors from harming Airbnb or our community. The extent of these practices varies depending on the country or region. |
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Secure payments. Our secure platform helps ensure that guest payments are received by hosts. We frequently remind guests to always pay through Airbnb and never wire money or pay a host directly. |
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Watchlist and background checks. For hosts and guests based in the United States, we conduct online background checks, which include state criminal background, and public record checks in connection with their first transaction on our platform and in some instances, we re-run these checks periodically thereafter. We also conduct host background checks in India prior to the first transaction. We check all of our hosts and guests against certain regulatory, terrorist, and sanctions watchlists to increase safety for all parties. |
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Cleanliness. We support the health of hosts, guests, and communities through our expert-backed five-step enhanced cleaning process, which is based on the enhanced cleaning protocol we developed in partnership with leading experts in hospitality and medical hygiene. Our protocol includes a five-step cleaning process and room-by-room checklists. We also provide hosts with extensive written and audiovisual resources, including the enhanced cleaning protocol and room-by-room checklists, that contain best practices that can help hosts implement our cleaning standards. |
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Fraud and scam prevention. We remind guests to always communicate, book, and pay through the Airbnb website or mobile apps. This helps ensure guests are protected from fraudulent behavior. We evaluate several signals associated with listings before they go live to help us investigate fraudulent inventory from being added to our platform. We maintain a team of fraud prevention agents who use technology solutions and manual screening to catch attempts to defraud our users and have a team available 24/7 for support. |
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Insurance and protections. Our Host Guarantee Program protects hosts against property damage of up to $1 million. We have introduced Host Protection Insurance and Experience Protection Insurance, which provide liability insurance of up to $1 million to protect our hosts against qualifying third-party claims for personal injury or property damage. |
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Booking restrictions. In an effort to reduce the number of potential unauthorized house parties facilitated through our platform, we have implemented restrictions on certain local entire home bookings made by guests under the age of 25 with fewer than three positive reviews or more than one negative review. These restrictions apply in the United States, Canada, and certain other regions. We also restrict certain last-minute bookings in some regions. |
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Urgent Safety Line. We provide an Urgent Safety Line that is available 24/7 in English to ensure that hosts and guests who experience safety issues while on a trip receive an instant response. We also have a Safety Center built into our online product that provides hosts and guests with a single source of safety resources including security checklists and safe hosting and safe travel tips. |
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24/7 Neighborhood Support Line. We provide a 24/7 Neighborhood Support Line in English and an online portal that allows neighbors and community members to contact us with any issues related to Airbnb that may be impacting them. |
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Guest refund policy. If a guest checks into a listing that does not meet our hosting standards, Airbnb may rebook the guest to a new listing of equal or greater value, or the guest will get 100% of his or her money back. |
In addition to these components, we have new initiatives in the pipeline and will continue to create additional features to strengthen the trust and safety on our platform. Designing for trust has been a core principle from the very beginning, and as we innovate new ways for strangers to trust one another, we make it possible for more connections to be made.
Design
Since the beginning, design has been at the core of nearly everything we do. We approach many of our decisions as design problems. Design at Airbnb is more than the way something looks — it is how something fundamentally works. It defines how someone experiences and perceives Airbnb, from the big idea to the smallest detail. Design makes the complex simple, and is critical to facilitate trust and connection.
We are driven by the belief that people yearn for connection and that there is a way to design for this. We pursue big and ambitious ideas that take shape as we combine intuition and data to inform our approach. We believe that every interaction that our hosts and guests have with us, no matter how small, defines their overall experience with Airbnb — and ultimately our brand.
Our Technology
We built our technology platform to power our global network of hosts and guests. As of September 30, 2020, we had approximately 1,460 engineers within our product development organization. Given the nature of the business, our technology platform has broad and complex requirements:
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Our core platform supports global payment capabilities, multilingual real-time community safety and support, and city-specific product requirements, and it contains sophisticated anti-fraud measures. |
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It delivers deep business intelligence insights to manage our marketplace, including pricing insights and occupancy optimization for our hosts. |
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It incorporates sophisticated machine learning to power key areas, from fraud detection to enabling customized and real-time community support. |
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To allow us to respond even more rapidly and efficiently to evolving consumer needs, we are moving our platform from a legacy monolith to a service-oriented architecture. |
Our transition to a service-oriented architecture is only one part of a plan to make our core business capabilities available as granular services that accelerate creation of new products and offerings. This work will continue as we build a platform that is increasingly robust, agile, and efficient. In parallel, we will continue to develop our foundational technology with a focus on the following broad capabilities:
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Data management systems that continue to support user privacy, analytics, machine learning, and business insights. |
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Service reliability leading to best-in-class performance centered on availability, latency, disaster recovery and business continuity, security, testability, observability, operability, and agility. |
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Cloud support focusing on robust capabilities for granular attribution and usage patterns to realize efficiency gains. We currently rely primarily on Amazon Web Services to provide cloud computing services. |
Our aim in making these investments is to continue to develop a robust platform that allows us to more quickly adapt to the needs of our hosts and guests around the world and increase the productivity of our product development organization.
Our Marketing
Our marketing strategy includes brand marketing, communications, and performance marketing. Brand marketing increases awareness among potential hosts and guests, helping them understand the benefits of hosting and booking stays and experiences and what makes these stays and experiences distinctly Airbnb. Our communications team works across press, policy, and influencers to share timely and important news about Airbnb. They also oversee the execution of a global consumer, product, corporate, and policy communications plan that supports our brand strategy and generates considerable press and social media coverage. While performance marketing drives additional traffic from high-intent prospective guests, the strength of the Airbnb brand and our communications strategy allows us to be less reliant on performance marketing.
In March 2020, we paused our sales and marketing investments in new initiatives and our performance marketing spend. Going forward, as the travel environment continues to recover from the impact of COVID-19, we have implemented a marketing strategy that will shift our marketing mix more towards brand marketing spend and away from spending on performance marketing. In future periods, we anticipate that the increase in brand marketing spend from 2019 levels will be less than the reduction in performance marketing spend from 2019 levels. As a result, we expect to have lower total sales and marketing expense in 2021, in both dollars and as a percentage of revenue, relative to 2019.
As we shift our paid investments to brand marketing and focus our internal resources to strengthen the infrastructure that supports our unpaid channels, we are expecting our visitor mix to shift further toward direct and unpaid channels, which represented 77% of traffic in 2019 and has shifted to approximately 91% of traffic in the first nine months of 2020. Based on our analysis of our performance marketing spend in 2019 and our results to date in 2020, we believe this strategy will allow us to maintain or increase overall traffic levels with lower performance marketing spend. Despite our material pull-back in performance
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marketing and the dramatically negative impact of the pandemic on the global travel market in 2020, our direct and unpaid traffic returned to 2019 levels as of the third quarter of 2020. We believe our marketing strategy will strengthen our brand positioning, improve our direct and unpaid channel traffic acquisition, and enable us to more quickly react and respond to risks and opportunities.
Our Community Support
We have a global community support team that offers 24/7 assistance in English and Mandarin, real-time voice support in 11 languages during business hours, live chat in 8 languages, and text support in over 20 languages to help with issues that arise before, during, or after a stay or experience.
As of September 30, 2020, we relied on a network of approximately 6,680 third-party partners that are spread across 25 sites, and individuals who work from home around the world to handle the vast majority of our community support contacts; our internal employees are a mix of operations teams who handle complex and sensitive issues and enablement teams who support all community-facing teams, including our partners. We are proud of our approach to working with partners and our deep relationships with them.
Our Employees
Hosts are at the center of our community, and our employees are at the center of our company. The people who work at Airbnb define Airbnb.
As of September 30, 2020, we had 5,465 employees in 24 cities around the world. Because of the COVID-19 crisis, we made the difficult decision to reduce our workforce by approximately 1,800 employees in May 2020, which was approximately a quarter of our workforce at the time. It was important that we had a clear set of principles, guided by our core values, for how we would approach reductions in our workforce. We focused on treating each departing employee in a compassionate manner.
Our Culture
The most defining part of working at Airbnb is our culture. Our culture is one of the main things that attracts people to work at Airbnb, and it is a key ingredient to our success.
Airbnb was born with a creative spirit, much like the design school environment at the Rhode Island School of Design, where Brian and Joe went to school together. Just like their time together at design school, they envisioned a close-knit community that accepted people in all of their eccentricities and allowed them to be themselves, inspiring them to do their best, most creative work. But Airbnb is not just a creative culture. We sit at the intersection of art and science, a commitment that started when Nate, an engineer, joined Brian and Joe, both designers. It is this marriage of art and science — of the scientific method with the creative process — that produces work that captures people’s imaginations.
Our culture is optimistic, with people who are passionate about our mission, caring about others, and curious about the world. We took the unique characteristics of the people at Airbnb and distilled them to four values:
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Champion the mission. Our employees are deeply passionate about connection and belonging, and the product that we make to deliver this. In fact, many of our employees are people from our host and guest community whom we hired. |
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Be a host. Our employees are the kind of people who like caring for others and making them feel like they belong, just like the hosts in our community. |
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Embrace the adventure. Our employees are curious and optimistic — you have to be an optimistic person to believe that the idea of Airbnb is a good one, and you have to be curious about other people and cultures to want to connect with them. |
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Be a cereal entrepreneur. Our employees are bold and resourceful. “Cereal entrepreneur” refers to the time when AirbedandBreakfast.com was struggling to earn revenue, and Brian and Joe decided to sell collectible breakfast cereal during the U.S. presidential election in 2008. They created and sold Obama O’s and Cap’n McCain’s and earned nearly $30,000, enough to keep Airbnb going. |
Every person who joins Airbnb, from board members and executives to college new hires, must share these four attributes.
Most importantly, we believe that whatever we want to happen outside the walls of Airbnb should first start inside Airbnb. This starts with our own employees. In this way, our culture is the source of all future innovation, and a North Star for how people in our community should treat each other.
Diversity and Belonging
At Airbnb, diversity and belonging is more than a corporate responsibility — it is central to what we stand for. We attract a diverse group of people and welcome their varied knowledge, experiences, and backgrounds. Through our hiring process, we commit to encouraging diversity and eliminating bias, and we publish the changing demographic makeup of our workforce to hold ourselves accountable.
As of December 31, 2019, approximately 50% of our global employees were women using the gender binary. We have set a goal for ourselves by the end of 2025 to have 20% of our product development and information technology employees be under-represented minorities at all levels and 50% of employees at all levels be women, using the gender binary. Most recently, in June 2020, we announced a commitment that 20% of our Board of Directors and Executive Team, collectively, will be people of color by the end of 2021.
Battling Discrimination on Airbnb
Airbnb is centered around belonging, and discrimination is a central obstacle to it. Just as discrimination exists in society, it exists in the Airbnb community, and we are committed to combating it. In 2016, we began taking steps to address discrimination on Airbnb.
First, we created the Airbnb Nondiscrimination Policy, which we required every host and guest to agree to in order to use Airbnb. If a host or guest does not agree to the policy, they are removed from our platform. Since 2016, approximately 1.4 million people have been removed from Airbnb for declining to agree to this policy.
Next, we did a comprehensive review of our platform and instituted the following initial measures:
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We created an anti-discrimination team of technical professionals that work to fight bias and discrimination; |
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We changed the way we show profile photos so hosts only see a guest’s photo after a reservation is confirmed; and |
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We distributed an antiracism guide to our hosts and guests in the United States. |
Most recently, in June 2020, we launched Project Lighthouse, our most significant leap forward in battling discrimination. This groundbreaking project was launched in partnership with Color of Change, the nation’s largest online racial justice organization, along with guidance from civil rights groups and privacy rights
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organizations. Project Lighthouse will measure discrimination on Airbnb based on perception. These perceptions will be aggregated and used to identify and measure discrepancies in people’s experiences that could be the result of discrimination. We will use the findings from Project Lighthouse to inform and design our products and policies to combat racial discrimination that Black guests and other people of color face when using Airbnb.
Our Regulatory Approach
Our global policy team partners with local communities and governments to ensure all stakeholders experience the benefits of healthy tourism. We encourage active dialogue among our global communities about responsible home sharing policies, formalizing these efforts through hundreds of partnerships with governments and non-governmental organizations.
Airbnb Community Compact
In 2015, we created the Airbnb Community Compact to guide our policy efforts with cities and local governments in the communities we serve. This formalized three guiding principles for how we work with communities:
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Treat cities personally and help ensure our community pays its fair share of lodging taxes. We seek to partner with cities to address their individual policy needs. We have supported policies that prohibit short-term rentals in subsidized housing and limit listings to primary residences in rent-stabilized units and those that prohibit landlords who evict long-term tenants to rent their properties on short-term rental platforms. We contribute to tax revenue for cities, which are often able to direct this revenue to support critical services, such as affordable housing. In many jurisdictions, we have agreed to collect and remit lodging taxes to local governments directly on behalf of our hosts and have developed tools to be able to do so. As of September 30, 2020, we had collected and remitted over $2.6 billion in lodging taxes worldwide. In other jurisdictions, hosts are responsible for collecting and remitting lodging taxes to their local governments, and we provide hosts with tools and information to help them pay taxes that they may owe. |
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Build an open and transparent community. We believe that cities can make the best policy decisions about home sharing when important data is made available to them. While protecting the privacy of our hosts and guests, we provide relevant metrics, such as aggregated information regarding hosts and guests in our community, to city officials to help inform the development of home sharing policies. In September 2020, we launched the Airbnb City Portal that allows governments and tourism organizations to directly connect with the Airbnb platform to access high-level local and global Airbnb data insights, to leverage compliance tools, and to receive direct access to Airbnb team members for support. |
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Promote responsible home sharing to make cities stronger. We seek to educate communities and support local governments in shaping policy that promotes responsible home sharing. We take proactive action in cities around the world against listings that have the potential to cause quality-of-life issues or that do not fit with the expectations of our community. |
Airbnb’s Office of Healthy Tourism
In 2018, we established our Office of Healthy Tourism, an initiative to broaden and deepen our partnerships with governments, non-governmental organizations, local non-profits, and destination marketing organizations to support tourism that is more local, diverse, and sustainable than mass tourism.
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Local. Based on a survey that we conducted in 2019, we estimated that host earnings and guest spending together generated nearly $117 billion in direct economic activity in our top 30 countries and |
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regions. The survey also showed that on average, 43% of Airbnb guest spending occurred in the neighborhoods where they stayed. According to the survey, 87% of hosts said they recommend local restaurants and cafes, and 82% said they recommend businesses that are locally owned. In addition, more than half of hosts said they recommend that their guests visit areas not well-known among tourists. Among guests, of those who received recommendations from their hosts, 81% reported following them, while 52% of all guests said they would not have visited the neighborhood of their Airbnb listing or Airbnb Experience had they not booked there. |
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Diverse. In 2011, only 12 cities around the world had more than 1,000 Airbnb listings each; today, more than 1,000 cities do. In 2011, only one city had welcomed over 100,000 guest arrivals at Airbnb listings; in 2019, more than 350 cities each welcomed over 100,000 guest arrivals. Not only have our guests broadened the scope of their travel, but our host base has diversified as well. We are proud that in 2019, more than half of our hosts in the United States were women. We also partner with the NAACP (National Association for the Advancement of Colored People) and LULAC (League of United Latin American Citizens) to bring the benefits of hosting to more communities of color. |
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Sustainable. According to a survey conducted by us in 2019, 82% of hosts said they used one or more green practices in their hosting, such as using bulk toiletries or promoting recycling or guest use of public transportation. Airbnb also enables cities to host large events, such as the Olympics, without the need to build additional permanent housing infrastructure. |
Regulatory Considerations in Our Largest Cities
We operate in approximately 100,000 cities across more than 220 countries and regions, and we are subject to various local laws and restrictions at the city, state, and country level. These laws and restrictions are dynamic. Many were instituted decades ago and did not envision Airbnb. We seek to work with governments to establish clear, fair, and workable home sharing rules to create clarity for our hosts. As of October 2019, approximately 70% of our top 200 cities by revenue before adjustments for incentives and refunds have some form of regulation.
In 2019 and the first nine months of 2020, no single city accounted for more than 1.5% of our listings or 2.5% of our revenue before adjustments for incentives and refunds. Additionally, in 2019 and in the first nine months of 2020, 11.9% and 6.8%, respectively, of our revenue before adjustments for incentives and refunds came from our top 10 cities. Incentives include our referral programs and marketing promotions to encourage the use of our platform and attract new customers, while our refunds to customers are part of our customer support activities. We do not believe that the current regulations in our top 10 cities, in the aggregate, have had or are expected to have a material adverse impact on our results of operations and financial condition. We have included information regarding the regulatory landscape for our largest 10 cities as measured by our revenue for 2019 before adjustments for incentives and refunds.
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London, United Kingdom: Since 2015, regulations have permitted residential properties, both primary and non-primary residences, in Greater London to be used for short-term rentals, without planning permission, for up to 90 nights per year. We were the first platform to voluntarily apply this 90-day limit, and in 2019 we publicly backed the Mayor’s proposal to introduce a simple host registration system in Greater London. |
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New York City, United States: In New York City, non-owner occupied short-term rentals are permitted in single and double family homes if the property is compliant with applicable safety and building codes. Short-term rentals are also permitted in multi-family buildings when a host is present, there are fewer than 3 guests, the guests have unobstructed access to every room and each exit, which includes no internal locks on doors, and the property is compliant with applicable safety and |
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building codes. In June 2018, New York City enacted a law requiring short-term rental platforms to disclose detailed data on hosts and listings to the city on a monthly basis for any unhosted stay in excess of four nights in a quarter. In August 2018, we and another industry participant filed a lawsuit against the city contending this law to be unconstitutional. In January 2019, a judge granted a preliminary injunction stopping the law from going into effect. We settled our lawsuit with New York City in June 2020 and under the terms of the settlement, the city ordinance was amended to reduce the number of listings subject to data sharing (only upon the consent of the host) and to provide for the confidentiality of data. The revised ordinance will go into effect in January 2021. |
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Paris, France: France has national legislation on short-term rentals with a limit of 120 days per year on primary residences, but that limit does not apply to rooms in a home. For short-term rentals of investment properties in Paris, a “change of use” permit is required if they were not previously rented out as a commercial activity. Two property owners challenged that requirement and there is a decision pending before the courts to determine the suitability of the permit system; a decision is expected in 2021. Paris also introduced registration obligations in December 2017 requiring short-term rental platforms to exclude listings without registration numbers, which we believe is not compliant with EU law. The city of Paris commenced two cases against us relating to this obligation: the first was dismissed in March 2019 and the second is pending. We continue to engage with the city of Paris and the national government to find a workable solution for the regulation of short-term rentals. |
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Los Angeles, United States: Los Angeles requires permits for short-term rentals of primary residences. Hosts of short-term rentals are required to register with the city and are required to obtain an extended home sharing permit to host more than 120 days per year. We are actively engaged with the city to craft a Vacation Rental Ordinance. The City Planning Commission approved the ordinance in December 2019 and the ordinance is pending at the City Council, that would allow for short-term rental of non-primary residences subject to registration and night cap restrictions. City regulations also require short-rental platforms to ensure that listings are compliant. In November 2019, we entered into an agreement with Los Angeles, which provides for an automated process to verify listing registrations, with the aim of achieving a stable regulatory environment for hosts and guests. |
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Rome, Italy: In 2017, Rome introduced online registration requirements for short-term rentals, but no distinction is made between primary and secondary homes nor are there any caps or zoning restrictions. In June 2020, we signed a voluntary tax collection agreement with the Municipality of Rome to collect and remit local tourist tax. On a national level, since 2018, the government has been working to introduce further short-term rental registration and host income tax requirements and has been considering requiring platforms to display registration numbers. We continue to engage with the government and support a national online registration scheme. |
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Barcelona, Spain: In 2002, Barcelona introduced regulations requiring lessors renting out entire homes for under 31 days to file a responsibility statement with the municipality prior to listing their home, and to display the registration number on their listing page. Zoning law limits total listings to just over 9,000 after a recent rescission of licenses by the Barcelona City Hall. Working to support the city’s objectives, we have voluntarily introduced a requirement on new hosts to include a registration number or claim an exemption. |
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Tokyo, Japan: In June 2018, a new national law in Japan went into effect to legalize the short-term rental of primary and secondary residences for up to 180 nights per fiscal year. Under the law, hosts |
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are required to register their listing with the local government. We are also required to register with the Japanese Tourism Agency, as an intermediary, and the law prohibits any registered intermediary from intermediating an illegal listing, including unregistered listings. We are required to remove listings that do not post a valid registration or license number in the listing. At the time of the law’s implementation, there was a steep decline in listings as we took down non-compliant listings, and we canceled associated reservations. The rate of listings has since recovered as of December 31, 2019. We will continue to work closely with the Japanese authorities on supporting the Tokyo Olympics in 2021 and on reviewing the national law starting in 2021. |
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Toronto, Canada: In December 2017, short-term rental regulations were enacted in Toronto. Among the main requirements, hosts must register with the city, the listing must be the host’s primary residence, hosts can rent up to three rooms or their entire home, and there is a 180-night cap per year on entire home listings. The regulations became effective in September 2020, and the city indicated that all hosts will need to be registered as short-term rental operators by late fall 2020. In addition, short-term rental platforms will be required to obtain a license from the city and ensure that all listings have valid registration numbers and provide a process for removal of non-compliant listings. |
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San Diego, United States: San Diego does not currently impose any restrictions on short-term rentals other than a prohibition on the short-term rental of accessory companion units. San Diego is considering a new short-term rental law that would require registration of short-term rentals in both primary residences and non-primary residences, and the number of dedicated rentals may be limited. |
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Lisbon, Portugal: Short-term rentals in Portugal are restricted through the registration of certain new listings. Hosts must obtain a registration number and display this on their listing page. We have voluntarily introduced a requirement on new hosts to include a registration number or claim an exemption to support the city’s objectives. |
We will continue to collaborate with policymakers to implement sensible legislation in cities around the world.
Competition
We operate in a highly competitive environment. As we seek to expand our community globally, we face competition in attracting hosts and guests.
Competition for Hosts
We compete to attract and retain hosts to and on our platform to list their homes and experiences, as hosts have a range of options for doing so. We compete for hosts based on many factors including the volume of bookings generated by our guests, ease of use of our platform, the service fees we charge, host protections such as our Host Protection Insurance, and our brand. Throughout the COVID-19 pandemic, we have also competed based on our cancellation and extenuating circumstances policies that applied as the virus spread across the world. We believe that hosts can earn more per night on Airbnb than other travel platforms due to our guest demand, our host tools that empower hosts to be successful, and our community built on trust and human interaction.
Competition for Guests
We compete to attract and retain guests to and on our platform, as guests have a range of options to find and book accommodations and experiences. We compete for guests based on many factors, including unique inventory and availability of listings, the value and all-in cost of our offerings relative to other options, our brand, ease of use of our platform, the trust and safety of our platform, and community
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support. Throughout the COVID-19 pandemic, we have also competed based on the availability of inventory close to where guests live and in non-urban markets, as well as the perceived safety and cleanliness of listings on our platform.
Our competitors include:
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OTAs, such as Booking Holdings, including the brands Booking.com, KAYAK, Priceline.com, and Agoda.com; Expedia Group, including the brands Expedia, Vrbo, HomeAway, Hotels.com, Orbitz, and Travelocity; Trip.com Group, including the brands Ctrip.com, Trip.com, Qunar, Tongcheng-eLong, and SkyScanner; Meituan Dianping; Fliggy, a subsidiary of Alibaba; Despegar; MakeMyTrip; and other regional OTAs; |
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Internet search engines, such as Google, including its travel search products; Baidu; and other regional search engines; |
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Listing and meta search websites, such as TripAdvisor, Trivago, Mafengwo, AllTheRooms.com, and Craigslist; |
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Hotel chains, such as Marriott, Hilton, Accor, Wyndham, InterContinental, OYO, and Huazhu, as well as boutique hotel chains and independent hotels; |
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Chinese short-term rental competitors, such as Tujia, Meituan B&B, and Xiaozhu; and |
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Online platforms offering activities, such as Viator, GetYourGuide, Klook, Traveloka, and KKDay. |
We believe we compete favorably based on multiple factors, including the differentiated breadth and depth of stays and experiences offered on Airbnb, our global scale and geographic reach, the strength and loyalty of our host and guest community, our brand, organic traffic, our platform functionality, including community support, payments, and host protections, and the extensibility of our platform.
Our Intellectual Property
Our intellectual property is an important component of our business. To establish and protect our proprietary rights, we rely on a combination of patents, trademarks, copyrights, domain names, social media handles, know-how, license agreements, confidentiality procedures, non-disclosure agreements with third parties, employee disclosure and invention assignment agreements, and other intellectual property and contractual rights.
As of September 30, 2020, we had 91 issued patents and 119 pending patent applications worldwide. We own a trademark portfolio with protections in more than 162 countries in which we currently operate for our primary brands — AIRBNB and our Bélo logo. Additionally, we own trademark protections around the world for other brands or protectable brand elements important to our business, including but not limited to Rausch, our primary corporate color; localizations, translations, and transliterations of our primary brands, and brands associated with businesses we have acquired.
We have registered domain names that we use in or relate to our business, such as the <airbnb.com> domain name and country code top level domain name equivalents.
Data Protection and Privacy
Our business uses, collects, and processes the personal data of individuals in more than 220 countries and regions. As a result, compliance with laws on data protection and privacy regulating the storage, sharing, use, processing, transfer, disclosure, and protection of personal data is core to our strategy and integral to the creation of trust in our platform. We take a variety of technical and organizational security measures
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and other procedures and protocols to protect data, including data pertaining to hosts, guests, employees, and other users. Despite measures we put in place, we may be unable to anticipate or prevent unauthorized access to such data.
Regulators around the world continue to propose more stringent data protection and privacy laws, and these laws are rapidly increasing in number, complexity, enforcement, fines, and penalties. For example, the GDPR became effective on May 25, 2018 and has resulted and will continue to result in significantly greater compliance burdens and costs for companies with users and operations in the European Union and European Economic Area. The GDPR regulates a broad array of personal data that can directly or indirectly identify an individual and imposes stringent data protection requirements with significant penalties for noncompliance. Many large geographies, which are important to our success, including Australia, Brazil, Canada, China, and India, have passed or are in the process of passing comparable data privacy legislation or regulations.
In the United States, the Federal Trade Commission and the Department of Commerce continue to call for greater regulation of the collection of personal data, as well as restrictions for certain targeted advertising practices. Numerous states have enacted or are in the process of enacting state level data privacy laws and regulations governing the collection, use, and processing of state residents’ personal data. For example, the CCPA went into effect in California on January 1, 2020. The CCPA establishes a new privacy framework for covered businesses such as ours and requires us to modify our data processing practices and policies and incur compliance related costs and expenses. In November 2020, California voters passed the California Privacy Rights and Enforcement Act of 2020, which further expands the CCPA with additional data privacy compliance requirements and establishes a regulatory agency dedicated to enforcing those requirements.
These and other data protection and privacy laws and their interpretations continue to develop and may be inconsistent from jurisdiction to jurisdiction. Non-compliance with these laws could result in penalties or significant legal liability. Although we take steps to comply with applicable laws and regulations, we cannot assure that we will not be subject to regulatory or private action, including fines for non-compliance of data protection and privacy laws, including in the event of an incident. We could be adversely affected if legislation or regulations are expanded to require changes in our or our third-party service providers’ business practices or if governing jurisdictions interpret or implement their legislation or regulations in ways that negatively affect our or our third-party service providers’ business, results of operations, or financial condition.
Legal Proceedings
We are currently involved in, and may in the future be involved in, legal proceedings, claims, and government investigations in the ordinary course of business. These include proceedings, claims, and investigations relating to, among other things, regulatory matters, commercial matters, intellectual property, competition, tax, employment, pricing, discrimination, consumer rights, personal injury, and property rights. See Note 13, Commitments and Contingencies – Legal and Regulatory Matters to our consolidated financial statements included elsewhere in this prospectus.
Depending on the nature of the proceeding, claim, or investigation, we may be subject to monetary damage awards, fines, penalties, or injunctive orders. Furthermore, the outcome of these matters could materially adversely affect our business, results of operations, and financial condition. The outcomes of legal proceedings, claims, and government investigations are inherently unpredictable and subject to significant judgment to determine the likelihood and amount of loss related to such matters. While it is not
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possible to determine the outcomes, we believe based on our current knowledge that the resolution of all such pending matters will not, either individually or in the aggregate, have a material adverse effect on our business, results of operations, cash flows, or financial condition.
Our Facilities
We are headquartered in San Francisco, California, where we have lease commitments for approximately 951,000 square feet across multiple buildings. As of September 30, 2020, we leased office facilities totaling approximately 1.95 million square feet in multiple locations in the United States and internationally. We have taken actions to reduce our global office footprint in light of the COVID-19 pandemic and believe our facilities are adequate and suitable for our current needs.
We will be undertaking a dedicated effort to improve the efficiency standards of our offices, including reducing waste, water, and power. One of our key initiatives is for all of our offices to be powered by renewable energy, such as solar and wind. This will make Airbnb eligible to join the RE100 initiative, whereby companies commit to using 100% renewable electricity.
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The Host and Guest Experience
At the core of Airbnb are the more than 4 million hosts who share their slices of the world with our guests. The following pages could not have happened without the care, craft, and dedication of members of the Airbnb community; we compensated hosts and guests for their efforts to document and share their stories.
Meet the host Soraya’s 100-Year-Old Garden Hosting since 2014
MEET THE HOST Soraya is an artist and photographer, and hosts guests at Mendip House, her childhood home overlooking the Somerset Levels and Cheddar Gorge, UK. The stone building dates back to the 1750s and sits on an acre of land filled with vegetables and fruit trees. Soraya is thrilled that her guests can experience the place she loves for themselves.
THE GUESTS A delicious weekend in the countryside — Max and his friends wanted to get out of London for a weekend trip, to relax, and to enjoy a slower pace of life in the countryside.
THE GUESTS When they arrived at Soraya’s home, they were greeted with a handwritten note left by her saying — “Help yourself to the veg in the garden.”
THE GUESTS They picked fruits and vegetables from the garden and greenhouse for dinner that night.
THE GUESTS Soraya had all of the amenities they needed in the kitchen to prepare a meal.
THE GUESTS She even had candles that they lit to make a candlelight dinner. They drank wine that she left for them and shared stories. It was a memorable evening.
THE GUESTS Max October 2020 “Unbelievably beautiful house with equally impressive views of the surrounding area. We were just a short drive from Cheddar Gorge and other great walking spots, but found that we were just as happy inside the lovely home as well—we spent a lot of time cooking, enjoying the garden, playing board games, and drinking by the beautiful open fireplace. Would highly recommend— you won’t be disappointed!” 5.0
Meet the hosts Miel & Darcy’s Pacific Lookout Hosting since 2014
MEET THE HOST Miel and Darcy realized lifelong dreams by building twin beach cabins on the Oregon coast. Keen travelers themselves, they knew what guests might look for in a place to stay, and have created homes in the Olivia Beach Community that suit a range of travelers’ needs, including those traveling with young children.
THE GUESTS Salt, sand, and nostalgia for three friends and a kid —Mason and his friends have recently returned to their homestate of Oregon, and were keen to see more of the state.
THE GUESTS Traveling with a young child meant the group were looking for somewhere a bit calmer, with access to the beach.
THE GUESTS It wasn’t just the grown-ups who were excited about a little trip to the coast.
THE GUESTS And once playtime was over, they headed to some of the local oyster houses for the catch of the day, as recommended by Miel.
THE GUESTS The Kumamoto oysters that thrive in the cooler waters right off this stretch of the Oregon coast are as fresh as they come. The group loved being able to shuck their own at home.
THE GUESTS Mason October 2020 “Miel’s place was phenomenal. Highly recommend if you’re looking for a beach house vibe.” 5.0
Meet the hosts Joe & Meg’s Mountain Retreat Hosting since 2012
MEET THE HOST Joe and Meg restored this 1800s schoolhouse in New York’s Catskill Mountains eight years ago, purposefully keeping it rustic and off-the-grid. They’ve created a one-of-a-kind sanctuary that allows guests to unplug and instantly relieve all the stresses of the city.
THE GUESTS A few days to unplug —Christina and her boyfriend traveled from Brooklyn to the Catskill Mountains. They were looking to escape from the bustle of the city, and unwind in the fresh air with autumn views.
THE GUESTS Preparing for the guests’ arrival, Meg had put vases of wildflowers in each room, tying together the nature inside and out. It’s the little details that actually make a house a home.
THE GUESTS Airbnb hosts are truly local tour guides as well, giving guests inside tips for so many places they might not have discovered without them.
THE GUESTS The couple found a number of footpaths leading right from the front door to various parts of the protected mountains.
THE GUESTS The couple were inspired by the antique glassware in the home to host an impromptu cocktail soiree for themselves, beside the fire and beneath the stars.
THE GUESTS Christina October 2020 “An escape from the hustle and bustle. Tranquility at its best!” 5.0
These are just a few of the stories that have taken place millions of times on Airbnb. In nearly every corner of the globe, Airbnb hosts share their unique homes and communities so our guests can experience these places like locals, rather than as outsiders. They enable guests to find a deeper connection to the places they visit, and to the people who live there. This is the magic of Airbnb.
Executive Officers and Directors
The following table provides information regarding our executive officers and directors as of the date of this prospectus:
| Name | Age | Position | ||
| Executive Officers: |
||||
| Brian Chesky(4) |
39 | Chief Executive Officer, Head of Community, Co-Founder, and Chairman of the Board | ||
| Joseph Gebbia(4) |
39 | Chairman of Samara and Airbnb.org, Co-Founder, and Director | ||
| Nathan Blecharczyk(4) |
37 | Chief Strategy Officer, Chairman of Airbnb China, Co-Founder, and Director | ||
| Dave Stephenson |
52 | Chief Financial Officer | ||
| Aristotle Balogh |
56 | Chief Technology Officer | ||
| Catherine Powell |
53 | Global Head of Hosting | ||
| Non-Employee Directors: |
||||
| Angela Ahrendts(2)(4) |
60 | Director | ||
| Kenneth Chenault(2)(3) |
69 | Director | ||
| Belinda Johnson(4) |
53 | Director | ||
| Jeffrey Jordan(1)(3) |
61 | Director | ||
| Alfred Lin(1)(2) |
48 | Director | ||
| Ann Mather(1)(3) |
60 | Director |
| (1) |
Member of the audit, risk and compliance committee. |
| (2) |
Member of the leadership development, belonging and compensation committee. |
| (3) |
Member of the nominating and corporate governance committee. |
| (4) |
Member of the stakeholder committee. |
Executive Officers
Brian Chesky. Mr. Chesky co-founded our company in 2008 and serves as our Chief Executive Officer and Head of Community. He is also a member of our board of directors. Mr. Chesky received a Bachelor of Fine Arts in Industrial Design from the Rhode Island School of Design. We believe that Mr. Chesky is qualified to serve as a member of our board of directors because of the perspective and experience he brings as our co-founder, Chief Executive Officer, and Head of Community.
Joseph Gebbia. Mr. Gebbia co-founded our company in 2008 and serves as our Chairman of Samara and Airbnb.org. He is also a member of our board of directors. He leads Samara, our in-house design and innovation studio. Mr. Gebbia received dual degrees in Graphic Design and Industrial Design from the Rhode Island School of Design, where he currently serves on the institution’s Board of Trustees. We believe that Mr. Gebbia is qualified to serve as a member of our board of directors because of the perspective and experience he brings as our co-founder and Chairman of Samara and Airbnb.org.
Nathan Blecharczyk. Mr. Blecharczyk co-founded our company in 2008 and serves as our Chief Strategy Officer and Chairman of Airbnb China. He is also a member of our board of directors. Mr. Blecharczyk received a Bachelor of Arts in Computer Science from Harvard University and held several engineering positions before co-founding Airbnb. We believe that Mr. Blecharczyk is qualified to serve as a member of our board of directors because of the perspective and experience he brings as our co-founder and Chief Strategy Officer.
Dave Stephenson. Mr. Stephenson has served as our Chief Financial Officer since January 2019. Prior to joining Airbnb, Mr. Stephenson spent 17 years at Amazon.com, Inc. (“Amazon”), a publicly-held global
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