Airbnb IPO and the importance of corporate Reputation Case Study

Report
Names: Maria Isabella Guardo
Maria Andrea Añez
Lorenzo Bonanni
Nino Ventura
Ariane Razafindrainibe

Question 1. What techniques of communication are used to present the origin of

Airbnb? Do you believe it strengthens the corporate identity of Airbnb in the
COVID-19 crisis?
Ans: Storytelling

The founders stated that they started their company because they didn’t know how to pay
their rent and used an innovative method by renting an air mattress, a perfect example of
“funny” storytelling. Emphasizing how to generate an extra income flow without putting a lot
of effort into it. Moreover, they displayed the relations that are built between the hosts and
the guests who arrive as foreigners and leave feeling like locals.

Yes, thanks to the storytelling behind its corporate identity Airbnb managed to be one of the
strongest companies in its sector. During the crisis, many people lost their jobs, and,
consequently, families were struggling. Airbnb offered them a way to earn some money on
the side without putting a lot of effort into it.

While the market stood in disbelief in front of its revenue being cut in half , Airbnb’s unique
proposal allowed great growth that eventually led to its IPO in 2020.

Question 2: Description and general information about Airbnb

What is the description of Airbnb activities?

Airbnb Inc. operates an online marketplace for travel information and booking services. The
company offers lodging, homestay, and tourism services via websites and mobile
applications. Airbnb serves clients worldwide.

What is your analysis of the Management Team (age, background)?

They all come from top-tier educational institutions. Some also have a long-time experience
in major tech companies. These two factors combined result in a great diverse team which
includes many different skills.

Question 3. Stakeholders mapping

Airbnb stakeholders.
Who are the main suppliers of Airbnb? What do you notice.
Ans:
The Main Suppliers of Airbnb are:
● SABRE CORP
0.30%, 1.39M revenue
● ORACLE CORP
0.21%, 0.89M revenue
● ERICSSON LM-B
0.19%, 0.18M revenue
● AKAMAI TECHNOLOGIES
 0.07%, 0.30M revenue

Here you can see 4 out of 25 suppliers that work with Airbnb. Sabre is the global biggest
provider of travel online booking systems. Oracle is the world’s largest database
management company. Ericsson provides the most powerful communication technology in
the world. Akamai Technologies’ Connected Cloud is the world’s most distributed cloud,
security, and content platform. All the companies mentioned above are global leaders in their
respective sectors.

Who are the main competitors of Airbnb? What do you notice?

Ans:
The main competitors of Airbnb are:

1. Bookings Holdings
2. Expedia Group
3. Trip.com
4. Tripadvisor
5. eDreams Odigeo

This is the list of the other leading Online Travel Agencies (OTAs) worldwide ranked by
revenue (in 2019 Airbnb was 4th, now it is 3rd). Looking at their revenue time series, it can
be inferred that Airbnb is the platform that lost the smallest share of revenue from 2019 to
2020. While most companies lost over half (e.g., Booking and Expedia) Airbnb managed to
lose around 30%. The “only” thing that sets Airbnb apart from its competition is its unique
business model: all the others work with hotels.

Question 4.

Financial performance
What is the lowest price? What is the interpretation?

The stock’s “official” lowest price was $68 on the 10th of December 2020. However, that date
is the day of the IPO. Actually, the IPO price should have been even lower but the company
decided to raise it a little. Nevertheless, they still largely underestimated the company.
Disregarding the low initial price, the lowest price was $81.91, reached on the 28th of
December 2022. Just one month earlier, Airbnb introduced its new cost-transparency policy,
meaning that the prices shown on the app included all kinds of previously “hidden” costs.
Therefore, many guests canceled their plans once they saw the “new” higher prices on the
app.

Comparison with a major competitor, Expedia. (S&P 500 as a reference)

One of its major competitors, Expedia, has a similar performance. Their growth trends are
pretty much the same. However, Airbnb is much more volatile.
Comparison with another digital platform, Uber. (S&P 500 as a reference)

Uber has a much more steady growth, ever since June 2022 the stock’s price has been
increasing, even if slower.

Comparison with a market index, the S&P 500.

Comparing the three stocks to the S&P 500 Index, we can say that the S&P suffers much
more from bigger events. Nevertheless, its growth is regular and the stock, overall, has less
fluctuations.
Current recommendations from analysts.

According to the percentages, we can see that 58% of the analysts suggest holding the
stock and only 14% recommend selling it. The rest think that the stock will perform well in
the future, therefore they recommend buying.
Question 5. ESG performance

How Is Airbnb managing ESG ratings?

Ans: Airbnb is a leading company when it comes to Governance scores. They are a diverse
and honest company. However, their social score is terrible. Their employment practices,
ethics, and data security scores are far behind the standards of their market.
Furthermore, even though they are above the median in the environmental impact score,
there’s room for improvement.
Lastly, they have a BB rating for their ESG Risk Score (Medium), implying that they could
improve their practices reassuring their investors and other key stakeholders.

Question 6. Company news

What data is presented to you?
We can see how the news at the top is focused on the international influence that Airbnb has
on global potencies like China and Germany. It goes into detail about the decision taking for
some mandatories such as respecting the environmental impact, social, and governance
aspects.Also we could read some specific articles about finance and ESG.

Question 7. Stakeholders interactions with its ecosystems

Considering the total amount of active litigations they have to cope with, it can be inferred
that Aribnb have a lot more compared to their peers (Booking and Expedia), even ten times
more. With a total of 37, they rank 1st, followed by Expedia with 8 and Booking with 4.
The most frequent complaint is for personal injuries, which accounts
for 27 litigations, alone.
Question 8. Your Group experience
After using for the first time the Terminal Bloomberg, share your first experience.
Ans: At the beginning we were not sure about where to begin, the Bloomberg terminal has a
lot of information, and 4 of 5 members of the group have never utilized it, so, it was an
information bombing, but after we started working I tANR information think that we could
organize and read the information correctly, also I consider that the small helps that are in
the terminal are useful to make the experience more friendly.

Explain, how does Bloomberg help to evaluate an organization?

Ans: Bloomberg does help evaluate an organization because it is a system that contains
massive and relevant data that helps get a clearer vision on the actual affairs of a company.

Also, there are real statements and information about the company environment that could
be useful to understanding the company's decision-making and how the macroeconomics
could affect the company performance.

What type of data do you think is interesting?

Ans:

We think that the information about the ANR is especially useful, including the information of
the opinion of the analysts could be useful to understand which could be a correct answer in
the investment decision market. Also, stakeholder mapping is extremely useful if you are
looking for the mapping of interactions that have a company and which are responsible for
making decisions in a corporation.

Additionally, for us, it's interesting in the stakeholders mapping, see companies like Amazon
being a supplier of Airbnb or Hilton Worldwide being a competitor, which both information
about stakeholders and competitors are a fundamental topic of this course.