Airbnb wins new funding to battle Covid-19 downturn
Airbnb has secured $1 billion in additional funding as it seeks to weather a downturn in demand following the coronavirus pandemic.
The home rental service said it would receive the money from Silver Lake Partners, based in Menlo Park, California, and Sixth Street Partners, headquartered in San Francisco.
The cash will be provided in a combination of debt and equity securities.
The move is seen as a vote of confidence in the future of the privately held company.
In common with the more traditional hospitality sector, Airbnb has suffered from the pandemic, with demand falling by as much as 90 per cent in some markets.
Airbnb has seen its valuation fall from around $31 billion to $26 billion, while the company has also begun a hiring freeze.
Egon Durban, Silver Lake co-chief executive, said: “While the current environment is clearly a difficult one for the hospitality industry, the desire to travel and have authentic experiences is fundamental and enduring.
“Airbnb’s diverse, global, and resilient business model is particularly well suited to prosper as the world inevitably recovers and we all get back out to experience it.”
The new funds will include $5 million towards special relief grants for Airbnb hosts.
Renters accuse the company of choosing to protect travellers instead of them by unilaterally changing its cancellation policy to give full refunds at the last minute.
The news comes as Airbnb hosts are accused of being irresponsible for advertising properties in Britain as “Covid-19 retreats”.
Laws brought in to combat the spread of coronavirus state that holiday accommodation should only be provided to key workers needing to self-isolate.
In response, the tourism minister, Nigel Huddleston, said: “Essential travel does not include holidays, leisure travel and visits to second homes - and people must remain in their primary residence.
“It is incredibly irresponsible and dangerous for some property owners to be marketing themselves as ‘isolation retreats’.”
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