In recent news, Airbnb is getting geared up to release their initial public offering (IPO) on Thursday morning to the NASDAQ exchange. But just yesterday, the company reported a price increase:
“…the expected pricing of its initial public offering has increased, to a range of between $56 and $60 a share from between $44 and $50 a share. The increase was reported over the weekend by the Wall Street Journal. That boosts what the California-based home-rental company could raise to up to $3 billion, and pushes its potential market value to up to $35.85 billion”
After 13 years of being in business, the big day is finally coming for this vacation rental company. But the IPO isn’t what I’m focused on. What I’m focused on is how Airbnb has now established itself as a “barometer for travel after the pandemic,” according to the Financial Times:
“The first warning signs over the coronavirus emerged from China where, by mid-February, Airbnb had been forced to suspend all bookings in Beijing.
By March it had grown into an existential crisis. In that month, and the next, there were more cancellations than bookings. In April, the worst month of the crisis, gross bookings were down by 70% globally.”
Nowadays, Airbnb is poised to make a COVID-19 comeback. The hits they took to their gross bookings and revenues were nowhere near the full extent of the losses suffered by its rivals Expedia and Booking.com. And on top of incurring fewer losses, they are also growing much faster.
The real question now is whether Airbnb can continue to succeed after the IPO is launched. As anybody in Silicon Valley will tell you, an IPO is merely the end of the beginning.
Airbnb has a LOT of outstanding issues they need to resolve if they want to cement themselves as yet another tech legend:
- Offering new products outside of their core home-sharing business
- Dealing with their properties being featured on competitor sites that allow them to be booked for a lower fee
- Class-action lawsuits over “forcing hosts to refund guests due to COVID-related travel bans”
- Recovering from the 25% cut in their workforce issued in May (leading to the loss of 1,900 jobs)
Regardless of these problems, Airbnb has evolved to become a clear indicator of the travel industry’s health.
When Airbnb is prosperous and thriving, so too is the travel industry. But when the travel industry is sinking towards the bottom, it’s a sure bet that Airbnb is being taken down with it.
What do YOU think about Airbnb? Got anything positive or negative to say about them? Reply to this newsletter and share your experiences with us!
COVID-19 Travel Rules for Us but Not Journalists
If there’s anything I hate about travel restrictions related to the pandemic, it’s when they are unfairly applied. While the rest of us have to give up our traveling dreams, or go through excruciating circumstances just to hop on a plane, special “classes” of people get to skip over the rules and live life as if nothing has happened.
Case in point: Sky News reports that the UK government has issued new travel rules where certain groups of people will NOT have to quarantine themselves for 2 weeks when arriving to the UK.
But who might these groups of people be? Frontline healthcare workers? Essential workers in transportation and supply?
Nope! As MP Rt Hon Grant Shapps said on Twitter, it’s the type of people who belong to high society and are deemed as “above the average person”:
“New Business Traveller exemption: From 4am on Sat 5th Dec high-value business travelers will no longer need to self-isolate when returning to ENGLAND from a country NOT in a travel corridor, allowing more travel to support the economy and jobs. Conditions apply.”
Yes, this also includes performing arts professionals, journalists, and wealthy sports stars. So unless you’re a big business who can exploit this new ruling, a celebrity, a high-net-worth individual, or a useless pundit writing for the mainstream news outlets, you’re going to have to quarantine like everybody else.
It’s all right there in the open for us to see: Rules for thee, but not for me!
Et Tu, Sweden? The Lockdowns Are Coming!
After successfully lasting the ENTIRE COVID-19 pandemic without any restrictive lockdown measures, Sweden is finally caving in amidst increasing numbers of COVID-19 deaths that now have them on par with the United States (6 deaths per 1 million people).
From The Wall Street Journal:
“After a late autumn surge in infections led to rising hospitalizations and deaths, the government has abandoned its attempt — unique among Western nations — to combat the pandemic through voluntary measures.
Like other Europeans, Swedes are now heading into the winter facing restrictions ranging from a ban on large gatherings to curbs on alcohol sales and school closures—all aimed at preventing the country’s health system from being swamped by patients and capping what is already among the highest per capita death tolls in the world.”
The hospitalizations kept rising too fast, alongside the deaths and the infections from COVID-19. So now, Sweden has no choice but to lay down the hammer. Cinemas and entertainment venues are closed, high schools are shut down, nonessential meetings are cancelled, and any gatherings of more than 8 people are banned. And of course, face masks for everyone!
Then again… even these restrictions are child’s play compared to what we’ve seen happening in countries all around the world. I’m sure that the Swedes will be more than happy to temporarily live under these rules until things are under control.
Travel Insurance for 2021: Should You Buy It or Save Your Money?
I don’t know how many of the travelers reading my newsletter deal with the topic of annual travel insurance, but it’s a topic worth discussing to anybody who is new to the travel game.
In short: Annual travel insurance helps you save money on buying insurance for individual trips. You are covered for trip expenses, property, baggage losses and delays/damages, rental car damage, accidents incurred during travel, and health expenses. You are NOT, however, covered for cancellations in most cases. And you likely won’t be covered for COVID-19.
So what should you do? Should you pull the gun and buy annual travel insurance, or save your money? Forbes has a very simple recommendation:
“If you have fewer than four trips planned for 2021, consider an individual policy. You’ll come out ahead by separating your insurance purchases. You may also get broader coverage.
But if you’re taking more than four trips and don’t need all the coverage of traditional travel insurance, or a ‘cancel for any reason’ policy, then an annual policy might be in your future.”
Put another way, annual travel insurance only makes for those of us who are going from place to place on a somewhat frequent basis. Those of us who only take a single vacation at the end of the year should probably just cough up the cash to get insured for an individual trip.
But I’m curious to know: What is YOUR experience with annual travel insurance? Would you recommend it to other travelers or tell them to stay away, and why? Reply to this newsletter and share your thoughts with us!
Those Cruise Stocks Won’t Be Going Up for a LONG Time…
Despite some of the impressive gains made by the stocks of cruise line companies in the month of November, don’t get too excited just yet! Not only are they well below their all-time highs, but it will take a while before those highs are ever reached again.
For one, we have no way of telling when cruise ships will be traveling at pre-2020 volumes. The dates for resuming cruise vacations keeps getting pushed back by the major companies. We know things will pick up again in 2021, as no cruise line company will be able to survive a pause in activity all the way up to the start of 2022.
We also have no way of predicting passenger behavior. Even with cruise ships sailing the seas again, that doesn’t mean passengers will be interested in hopping on a boat anytime soon.
With over 50% of formerly booked passengers asking for refunds instead of credit for future trips, and first-time customers still on the fence, cruise line companies have a LOT of convincing to do.
Plus, what about the financial health of the cruise line companies themselves? Many of them have taken on staggering amounts of debt just to avoid declaring bankruptcy, and cash is tight.
They don’t have several months of solid liquidity under their belt like some of the more established US airlines. And they sure as hell aren’t getting a government bailout with their tax-evading practices.
I’m not saying to NOT invest in cruise stocks or sell them. But if you are a long-term investor who is bullish on cruise stocks, get ready to sit tight and wait a few years before they become profitable assets again.
The UK’s Proposed “COVID-19 Vaccination ID” Cards Could Create a Black Market
In the UK, the government is proposing the idea of having their citizens obtain ID cards for COVID-19 vaccinations (Source: The Daily Mail):
“The cards are NHS reminder cards that prompt people to get the second dose that they need. That’s a well-established practice in the NHS to offer people cards to remind them of their next appointment.”
Except if you look at these cards, there is no photo identification whatsoever. In fact, anybody who knows how to properly work a printer and a scanner could very easily fake them.
And amid fears that businesses could demand proof of these ID cards before being allowed entry, people are willing to create their own ID cards or even buy them through the black market just to live a normal life.
The government has repeatedly denied that the cards would be used to infringe upon the civil liberties of UK residents, but some officials are talking about these ID cards as if they are “freedom passes” to participate in everyday society.
Considering that businesses such as Australian airline Qantas have already “coerced” travelers into getting COVID-19 vaccinations by planning to make them mandatory for travel, I don’t think the Brits are being paranoid here. In fact, I see this as a very unfortunate realization for what’s coming in the near future.