Airbnb's losses swelled to $674 million last year, even before the coronavirus crisis crushed its business
- Airbnb lost $674 million last year, which was hundreds of millions of dollars more than it lost in 2018, The Wall Street Journal reported.
- The online travel company's revenue jumped 32% year-over-year, but its costs rose even faster, climbing to $5.3 billion.
- The deterioration in Airbnb's bottom line came in advance of the coronavirus, which has throttled its business.
- Airbnb had been seen as a model startup; now, some investors are calling for CEO Brian Chesky's head and for cost reductions, according to the report.
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Even before the coronavirus crisis hit, Airbnb's bottom line had already dipped far into the red.The online travel company lost $674 million in 2019, The Wall Street Journal reported Wednesday. It's unclear how much the company lost in 2018 - The Journal didn't report an exact figure - but a chart accompanying its article indicates it was less than $100 million. The Information had previously reported the company posted an $18.7 million operating profit in 2018, but that excluded interest costs and tax payments.
The widening losses came despite the fact that Airbnb's revenue in 2019 jumped 32% to $4.8 billion, as Business Insider previously reported. The company saw its expenses soar to $5.3 billion last year, The Journal reported. Again, The Journal didn't report Airbnb's 2018 expenses, but its chart indicated they were more than $3 billion.Over the last two years, Airbnb's administrative, product development, and operations and support costs have all ballooned, according to The Journal's report. Its administrative expenses alone grew 113% between 2017 and 2018, The Journal reported.
The sharp decline in Airbnb's bottom line even before the epidemic hit could raise questions about its direction and business model. Previously, it was viewed as a model startup with an attractive business. But more recently, some investors have already pushed for the company to replace CEO Brian Chesky and to slash costs, The Journal reported.Like other travel companies, Airbnb has been slammed by the coronavirus pandemic and the decision by many governments around the world to limit their citizens' movement. The company has seen cancellation rates on reservations in recent weeks of as high as 90%, market research firm AirDNA has reported.Earlier this week, Airbnb announced it had raised $1 billion in new funding, but that came in the form of high-interest debt, The Journal has reported. Airbnb is reportedly looking to raise another $1 billion to help see it through the present crisis. Without additional funds, the company could run out of cash within the next year, according to a Business Insider analysis.
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