Airbnb travelling well as stock soars on debut

Airbnb co-founder Joe Gebbia, who became a multi-billionaire when his company listed on Friday, says a pandemic won’t change our desire to travel.

Joe Gebbia, co-founder of AirBnB at the company's offices in San Francisco.

Airbnb co-founder Joe Gebbia, who became a multi-billionaire when his company listed on Friday, says a pandemic won’t change peoples’ desire to travel.

Airbnb’s shares more than doubled on debut in New York in one of the world’s biggest IPOs this year. Shares soared as high as $US146 on the Nasdaq, well above the initial $US68 a share, giving it a sky-high valuation of more than $US100bn ($132bn). That’s more than double the value of hotel giant Marriott, and a striking result for a company whose existence was threatened this year by the coronavirus pandemic and widespread travel bans.

“This is incredibly humbling,” Gebbia tells The Weekend Australian. “This has been described as a comeback story. Travel ground to a halt this year, it was a very uncertain time for us … Travel is different now, but there’s a deep human desire to travel, and that’s not going to go away. A pandemic can’t stop that.”

Friday’s startling debut capped a year from hell for Airbnb, which was forced to slash 1900 staff in May — about a quarter of its workforce — as COVID-19 ravaged cities the world over and forced widespread lockdowns and travel bans.

Chief executive Brian Chesky wrote a heartfelt letter to affected staff, spelling out termination packages including 14 weeks of pay and a year of healthcare, and Gebbia describes the time as incredibly tough on both a personal and business level.

The company borrowed $US2bn to bolster its finances, and axed whole categories of its business including a planned transportation unit and a mooted TV studio dubbed Airbnb Studios.

“We didn’t know how long this was going to go on. And then we saw a glimmer of light,” Gebbia says. ”We took out loans to make sure we had enough in the bank.”

Gebbia serves as Airbnb’s chief product officer. His ownership of slightly less than 10 per cent of the company gave him a net worth on Friday of about $US10.3bn. That’s the same for co-founder and chief strategy officer Nathan Blecharcyzk, while CEO Brian Chesky owns about 11 per cent, giving him a new net worth of $US11.4bn. The trio join a growing cohort of young rich Silicon Valley tech executives hoping to use their wealth and clout to shake up the established order.

Airbnb bookings are now back to pre-COVID levels — including in Australia — underpinned by domestic travel and a widespread desire to get out of the house. Its investors are banking that travel cannot only return to how it was before the pandemic, but that Airbnb can help unlock and share properties of all sorts the world over.

While Airbnb doesn’t break out the Australian business, revenue generated from Asia-Pacific last year represented around 18 per cent of total bookings, while Europe represented 43 per cent, North America 29 per cent and Latin America making up the balance.

Gebbia says both he and his company have come a long way since he and Chesky rented out cheap beds on the floor of their San Francisco apartment in their mid-twenties 12 years ago.

“It wasn’t that long ago I was doing all the customer support calls myself,” he says. “We’re thrilled to get here.

“This idea just didn’t exist 13 years ago, and we willed it to existence through a lot of hard work and a little bit of luck … a lot of passion and commitment and mostly right decisions, and learning really quickly. Brian and I were relatively first-time founders, and Nathan had started some stuff on his own, but they’ve really blossomed as leaders and come into their own as executives.

“The three of us together have grown up together. We were 26 when we started this thing and we’re 39 now, so we’ve grown up with this experience.” Gebbia says to cap Airbnb’s stellar debut, the entire company will hold an all-hands meeting to revel in its success and mark this milestone in the journey. He also flagged some ‘‘things on the horizon’’ to be announced next week.

Airbnb’s hosts and guests will share in its success; executives are giving away over 9 million shares to its hosts, and its top 100 guests have received surprise Airbnb travel credit in their accounts.

It also tapped some of its four million hosts to ring their doorbells, in lieu of a more traditional Wall Street bell ringing ceremony.

The overall secret to Airbnb’s success, Gebbia says, has been its high hiring standards. He credits recently deceased Zappos founder Tony Hsieh with some key wisdom that has shaped the entire company.

“The bar is really high to work in our company,” the executive says.

“Tony Hsieh was a really powerful inspiration for us in the early days of the company. He showed us you can have a successful business that cares about people, and he said something to us I’ll never forget. He said it’s the people that create culture, not the other way around.

“We stuck to that since the beginning, and I’m really proud of our culture. We’ve hired people with incredible skills but incredible heart at the same time.”