Airbnb lowered its internal valuation to $26 billion as the short-term rental company deals with a sharp drop in bookings due to the coronavirus pandemic, the Financial Times reported on Thursday.
That’s a 16% drop from the $31 billion valuations Airbnb received at its most recent private fundraising round, according to PitchBook.
The travel industry has been hit especially hard by the spread of the coronavirus disease, Airbnb included. Data from vacation rental market research firm AirDNA showed that Airbnb bookings in Beijing dropped 96% from January to March as the virus spread throughout China, while bookings in Rome, Italy, and Seoul, South Korea, saw drops of 41% and 46% — and the economic fallout could continue for months, Business Insider reported.
Airbnb had also been struggling even before the outbreak, reportedly losing $322 million in the first nine months of 2019 compared with a $200 million profit during the same period a year prior.
The decline in bookings and concerns among investors about the company’s profitability has raised the possibility that Airbnb could delay its plans to go public in 2020, with sources telling Bloomberg that the timeline could get pushed back due to coronavirus fears.
Airbnb CEO Brian Chesky promised hosts earlier this week that the company’s business will bounce back following the coronavirus pandemic, saying that it has weathered crises before.
According to Business Insider, Chesky’s comments come as hosts have seen business drop sharply in recent weeks, and many have criticized Airbnb for leaving them bearing most of the financial burden. In response, Airbnb has set aside $260 million to reimburse hosts for canceled reservations, but some hosts were unimpressed, telling Business Insider that the fund will only cover a portion of lost revenue and some property managers may see no benefit at all.