Airbnb is a company in the process of building its leading alternative accommodations booking service into a platform that enables vacationers, property owners, experience providers and, importantly, a mobile workforce through a marketplace of services that create an unprecedented degree of fungibility in housing. Beyond simply providing an alternative to hotels for a vacationing family, Airbnb allows a property owner in one city to generate revenue to secure housing in another city. To the extent that a more mobile workforce will be a major feature of post-pandemic society, Airbnb will be a critical part of the ecosystem that enables it. Goldman Sachs sees this, and the platform optionality it creates, along with opportunities in travel and experiences, as one of the most significant early-stage growth propositions in the Internet sector.
While near-term pandemic related headwinds are likely to continue to weigh on financial performance, Airbnb’s share gains relative to others in the online travel space and the lodging space in general (Exhibit 16 - Exhibit 17) reflect the strength of its brand, with ~90% of traffic coming directly to the site, and the value of the marketplace model’s flexibility. With management having significantly reduced costs in the early days of the pandemic, aligning the cost structure around the core alternative accommodations business, the economics of the model at scale are among the most favourable that Goldman Sachs sees in the online travel space. That said, at ~17x ‘22 GSe Sales with a 3yr CAGR of 33% versus comps at 5x on 27% growth Goldman Sachs believes much of this outlook is priced into shares of ABNB already and will look for better entry points.