- The online marketplace for accommodation earns commission from bookings made through the platform.
- Airbnb was severely affected by the COVID-19 pandemic-related lockdowns and global, national and regional travel restrictions.
- It’s poised to grow with the lifting of restrictions, and resumption of travel across the globe.
Airbnb Inc (NASDAQ: ABNB) is a US company that created an online marketplace for mainly holiday rentals and homestays. The company was founded in 2008 and is based in San Francisco, California.
Airbnb went public in December 2020 at US$68 per share. This is an Singaporean's guide to investing in this company.
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Airbnb operates as a P2P (person to person) rental site that acts as a broker, earning a commission, by advertising and executing transactions. This has enabled private and commercial property owners around the globe, to rent out their properties, and even spare rooms.
Airbnb has 2.9 million hosts worldwide, in over 100,000 cities in 220 countries. Worldwide, there are over 7 million Airbnb listings and around 14,000 new hosts are joining the platform monthly in 2021. The company reported a revenue of US$ 3.378 billion in 2020.
The curtailments on travel and tourism across the globe during the pandemic devastated the travel and tourism industries and Airbnb's business operations. The company is now recovering, with the lifting of travel restrictions across the globe.
Airbnb subsidiaries include HotelTonight and Luxury Retreats International Inc.
Step 1: Select a broker
There are many online brokers that offer different options. When choosing a broker, there are several key points to consider. These are some of the key features to look for when choosing a broker.
Many US share trading platforms offer this option. It is possible to save money on share trading by not paying commissions.
Fractional share investment
Fractional share investment means that you can only buy a portion of a share, rather than the entire thing. This may be worth considering as Airbnb shares can be quite expensive.
A user-friendly trading platform
It doesn't have to be difficult to trade shares. Keep an eye out for a platform that is simple to use.
Research, analysis, and reporting
You should look for platforms that have a strong research and reporting section. This section can provide you with important information about Airbnb such as company overview, price history and recommendations, and even price forecasts.
Many platforms offer an educational section that teaches you all about share trading.
Step 2: Fund your trading accounts
Next, deposit funds into your account. If you just opened a trading account, it might take some time before the funds clear so you can trade.
Step 3: Decide how much to invest
Fractional share investing is a great option, as Airbnb shares can be expensive. Fractional investing allows you to start small and take on less risk. This also means you can make more money by buying in at low prices so your total cost is lower.
Step 4: Invest in an ETF or buy shares
You can either purchase shares and then own them directly or invest in Exchange Traded Funds (ETFs). This is similar to a mutual fund and can be great in certain circumstances. These funds are less appealing to active traders because they have less control over the money's destination.
Many ETFs have exposure to Airbnb including SoFi Gig Economy ETF (GIGE), Vanguard Total Stock Market ETF (VTI), and Vanguard Growth ETF (VUG).
Step 5: Set up your order
You can customize what you buy and for how much. There are many order types. These are the main ones in common use.
Order to purchase/sell shares instantly. This ensures that the order is executed immediately, but does not guarantee the price.
Let's suppose Airbnb shares trade at US$170. The price of Airbnb shares drops to US$166 after you place a purchase order. The price of your purchase will be lower. The same applies to price increases.
Execution-only orders for buy limit orders are executed at the price quoted or less. You may wish to buy Airbnb stock at a price of US$165. You can submit a limit order for this amount. It will only be executed if Airbnb shares fall to US$165 or less.
This type of order allows you to sell your shares at a certain price if the share price starts dropping. Let's suppose you want to sell your Airbnb shares if the price falls to US$160 per share. Your stop limit order execute automatically if the shares drop to this price.
Step 6: Place your order
After you've chosen a broker and funded your account according to the amount you want to invest, and determined how you will invest your Airbnb shares based upon the order type, you can place your order. This is usually done with a click of a button.
Step 7: Monitor your investment
Once you buy shares, it is necessary to keep an eye on your investment and watch how the share as well as the company performs.
Monitor Airbnb’s performance and share price
Whether you are buying shares with a speculative motive or as long term investments, you must watch company performance and industry trends.
Airbnb is popular among institutional investors (funds).
Track industry trends and Airbnb competitors
Airbnb's closest competitor with a similar platform is Vrbo. Other competitors include Booking.com, Tripadvisor, Agoda, Expedia Group subsidiaries including Stayz, TravelMob and Bookabach, TUI Villas, FlipKey, TravelStaytion, Tripping.com (HomeToGo), and Plum Guide. Not all of these, however, are holiday rental marketplaces. HotelsCombined and other hotel and travel sites also compete with Airbnb.
Airbnb is encroaching into the market typically associated with hotel brands like Hyatt Hotels (NYSE: H), Marriott International (NASDAQ: MAR), Hilton (NYSE: HLT) and other hotel chains who are investing in their offering to head off Airbnb’s threat.