Airbnb raised $1 billion in “a combination of debt and equities securities” to help see it through the coronavirus crisis. The investment came from investors Silver Lake and Sixth Street Partners, Airbnb announced in a press release.
The pandemic has prompted governments around the world to issue stay-at-home orders. This has triggered a wave of cancellations in the travel and hospitality industries. This is affecting big and small businesses working in the travel and hospitality industry. Palestinian booking platform, Yamsafer spoke to WAYA about how the are dealing with the challenges of operating during a pandemic.
However, some investors remain optimistic about the future of these industries. “While the current environment is clearly a difficult one for the hospitality industry, the desire to travel and have authentic experiences is fundamental and enduring,” Silver Lake co-CEO and managing partner Egon Durban said in a statement. “Airbnb’s diverse, global, and resilient business model is particularly well suited to prosper as the world inevitably recovers and we all get back out to experience it.”
In March, Airbnb said it would direct $250 million to help hosts who have been impacted by COVID-19. Airbnb will pay hosts 25% of what they would normally receive through their cancellation policy if a guest cancels a reservation due to COVID-19 between March 14 and May 31. The move was made after hosts complained that the company’s policy would allow guests to cancel reservations and receive a full refund. That policy is still active. It allows guests who booked reservations on or before March 14 that begin anytime on or before May 31 to cancel and receive a standard refund or travel credit.
Airbnb stressed that the funds would support its ongoing work to invest over the long term. A statement aimed at dissuading clients and shareholders from seeing this raise as a bailout.
Airbnb had planned to go public this year. Although the hospitality platform has been hit hard by the coronavirus crisis. Its valuation fell from $31 billion to $26 billion. Additionally, there were questions about its profitability before the pandemic. It reportedly lost $322 million in the first nine months of 2019 compared with a $200 million profit during the same period a year prior. Airbnb was also among the companies accused of violating human rights due to its link with illegal Israeli settlement
Bloomberg has reported that the company aims to raise another $500 million to $1 billion in funds.
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