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Airbnb’s $3.1 Billion IPO Hinges on Hosts Who Make Rentals Feel Like Home

Hand-written notes for guests add a personal touch, but professionally managed units account for an increasing amount of listings.

Sara France, the first person to rent out her entire home on Airbnb, still lives in that home in San Diego, California.

Sara France, the first person to rent out her entire home on Airbnb, still lives in that home in San Diego, California.

Photographer: Maggie Shannon/Bloomberg

Airbnb Inc. Chief Executive Officer Brian Chesky, on the eve of one of the most anticipated initial share sales of the year, is asking investors to get behind the idea that the company's pandemic-scarred home-rental business is bouncing back.

He also needs would-be shareholders to look past another troubling trend: a rise in the number of professional hosts renting out sometimes anodyne properties, threatening the business model Airbnb pioneered of offering distinct homes brimming with personal touches.

Airbnb acknowledges the shift toward corporate-run properties and the risk it poses to its identity.  “We have seen an increase in the number of, and revenue from, professional hosts on our platform,” Airbnb said in its public listing document. If the number of individual hosts doesn’t expand at the same pace, Airbnb said the site will lose some of what makes it unique and sets it apart from hotel chains.  As of the end of last year, Airbnb said only 10% of its total hosts were professional, as opposed to individuals. However, they accounted for almost 30% of room nights booked.

On Wednesday, Airbnb will price shares in a long-awaited initial public offering, raising as much as $3.1 billion and valuing the company at $42 billion. In the twelve years since its founding, the San Francisco-based startup has welcomed 825 million guests, upended the hotel and travel industry and created a whole new market for companies that cater to hosts and properties. It owes much of its success to homeowners like Sara France who were willing to take a risk on a new mode of travel by handing over their keys to total strangers.