Can Airbnb really be worth more than Marriott?

Room-rental platform Airbnb ended its first day of trading at $144.70. That means it has a market cap of around $100bn, twice the value of Marriott, the largest hotel operator. Can that be possible?

Shares in home rental platform Airbnb “more than doubled” when the company started trading on the Nasdaq last week, says Dominic Rushe in The Guardian. Initially priced at $68 a share, the stock surged to more than $150 at one point, ending the first day of trading at $144.70. 

This means that the company, founded in 2008 when the cofounders rented out air mattresses in their San Francisco apartments, is worth around $100bn, twice the value of Marriott, the largest hotel operator.

It’s no surprise that investors are bullish, says Jim Armitage in the Evening Standard. Airbnb may not “have the first clue about how to fold a doily”, but it does offer the “biggest, cheapest, perhaps quirkiest selection of rooms to sleep in across the world” and has used “brilliant technology” to do this “quickly and easily”. Even Covid-19 won’t hold it back. With “millions – perhaps hundreds of millions” of people “just desperate to travel”, demand “will bounce back like we’ve never seen before once the vaccines take hold”. What’s more, customers are likely to prefer somewhere “where as few people as possible have been congregating”.

Investors need to calm down, says Lex in the Financial Times. It’s true that travel trends “are on Airbnb’s side” amid “persistent wariness” over “crowded hotels and planes”. Still, remember that the company is currently losing money, which means that it will need to “keep a lid on costs” at the same time as it needs “outlandish growth” to justify its “lofty valuation”. As a result, “investors seeking a bargain should stay at home”.

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