Airbnb raises $1 billion to manage coronavirus travel payments slump
The coronavirus pandemic has halted nearly all spending on travel, leading Airbnb to the private equity market to shore up operations and mitigate a slump in rental revenue.
Menlo Park, California-based Silver Lake Partners and San Francisco-based TPG Sixth Street Partners have led a $1 billion investment. Airbnb will use the funds to enhance its own investments in its host community and to develop its experiences business.
Part of the investments by Silver Lake and Sixth Street will include $5 million in which Airbnb will contribute to its Superhost Relief Fund, which will provide grants worth a combined total of $15 million to "superhosts" who rent out their own home and need help paying their rent or mortgages, as well as to long-tenured Experience hosts struggling with the lack of travel spending.
Superhosts are Airbnb’s most elite hosts who are required to have a 4.8+ out of 5 star rating, along with other requirements according to the company’s Superhost program. Superhosts receive bonuses and other perks to reflect their higher quality standards.
Related to the coronavirus-induced travel stoppage Airbnb announced on March 30, 2020 that it was creating a $250 million fund to support its hosts impacted by customer cancellations stemming from pullbacks on travel and vacation spending. Airbnb will pay 25% of what a host would have received for a customer cancellation based on their cancellation policy. Meanwhile guests will be able to cancel their reservations for a full refund for COVID-19 related circumstances.
The reservations eligible under Airbnb’s extenuating circumstances policy must have been booked on or before March 14, 2020 with a check-in date between March 14 and May 31, 2020.
According to Crunchbase, a website that tracks investments in private companies, Airbnb has raised over $5.4 billion in 16 funding rounds since its founding in 2008. Airbnb was widely expected to file for an IPO sometime in 2020 prior to the coronavirus outbreak.