Airbnb continues to disrupt the accommodation market around the world with its online booking platform, so can investors get exposure to this thriving business?
The company has long been expected to list on a stock market, yet it seems investors may have to wait a little longer for an IPO (initial public offering).
Airbnb said in February that it still planned to float in the future, except it definitely wouldn’t happen this year.
Chief executive Brian Chesky said: ‘We are not going public in 2018. Our primary focus is becoming a 21st-century company and advancing our mission. We’re working on getting ready to go public and we will make decisions about going public on our own timetable.’
So for now, retail investors wanting exposure to Airbnb will have to go down the funds route.
Many funds and investment trusts can invest in privately-owned businesses, providing cash to help these companies on their growth journey.
One relevant investment trust when it comes to Airbnb is Scottish Mortgage (SMT), albeit the accommodation specialist is only a small part of its portfolio alongside a host of other fast-growth names including Amazon, Delivery Hero and Spotify.
Crunchbase has a list of other investors in Airbnb including a mixture of venture capital firms, investment banks and even Hollywood actor Ashton Kutcher.
WHAT DOES AIRBNB DO?
Airbnb allows people to rent their homes, rooms or apartments to visitors via its online platform.
Scottish Mortgage’s joint fund manager Tom Slater says it has an attractive business model as accommodation providers can fuel supply in popular areas that travellers are keen to visit without paying a high price to stay in a hotel.
He believes the online platform offers a ‘more personal travel experience’ and interesting places to stay, including tree houses and castles.
‘That experience has been attractive to travellers - more than 260m visits have now been made on Airbnb,’ comments Slater.
Airbnb plans to tap into a growing desire for more personalised travel through its ‘Magical Experience’ offering. This allows accommodation providers the chance to provide experiences for its hosts at an additional cost.
This could include a guided tour of the area by a local, providing a more intimate and personalised experience.
‘If you go to visit one of Airbnb’s 65,000 cities, you don’t really want to go and do exactly the same experiences in those cities as everybody else,’ says Slater.
Some of these experiences can be eccentric, such as an afternoon of teaching magic tricks in London, KANJI art making in Japan or meeting a wolf pack in Seattle.
DISCLAIMER: Daniel Coatsworth who edited this article owns shares in Scottish Mortgage
