Looking longer-term, a key driver will be listing growth.
Even before COVID-19 hit, listing growth appeared to be slowing, and it’s possible that this trend will continue. On the other hand, short-term rentals increasingly look like the accommodation choice of the future. Short-term rentals, which easily allow for social distancing, represent an accommodation option that will prove relatively popular vs. hotels as long as fear of COVID-19 continues. Airbnb’s new rigorous cleaning standards have also helped in this respect.
Another trend that suggests Airbnb’s listing growth will continue in the wake of COVID-19 is that homeowners might be increasingly open to putting their property on the platform during periods of economic contraction as people seek supplemental income to help cover mortgage expenses, or to plug gaps in household budgets caused by job losses.
Demographics also favor the short-term rental industry. While older generations still typically opt for hotels when traveling, younger people consistently prefer the experience of short-term rentals, and this demographic will make up an increasingly large share of travel spend.
Further adoption of short-term rentals would help Airbnb grow their listings and grow the addressable market of travelers to market these listings to. If the market buys into that growth story, we could see an even higher multiple for Airbnb, and a valuation above $30bn.