Doordash and Airbnb have deftly maneuvered through 2020 to become pandemic success stories. Doordash’s business model seems a perfect fit for a pandemic in retrospect, while Airbnb might have had a more difficult path. Any way you slice it, they have both come out on top, but will their pandemic-driven growth continue?
We’ll explore the momentum that landed them on the stock exchange and more, with a look at:
- How the new normal presents opportunities
- Going public means swinging for the fences
- What tomorrow may hold
And here are a few related statistics before we get going:
- Hotel occupancy bottomed out in April and had risen to just 3% in October, representing a 30.1% decline over the same time last year.
- Late in the year, 4 out of 10 hotel workers are still unemployed.
- November job growth in the hospitality industry remained flat, down 3.4M jobs from February.
New Normal Presents Opportunities
These days safety sells, and consumers looking for a quick bite or an overnight stay are spending their money with the brands keeping their health at the top of mind. At the beginning of the pandemic, many hotels shut their doors while others remained open to serve frontline workers.
As time has passed, brands seeking to keep their doors open have had to get creative. They’ve returned to the basics in the process while putting their customers’ needs first, or ‘generation clean’ if you will.
And consumers are seeking out these brands that are going above and beyond in cleanliness and safety standards. Carpets and bedspreads are out, and PPE, open spaces and attention to detail are in. And the cardinal rule is to ensure your clients know without a doubt that their safety comes first. If they don’t see it, it didn’t happen.
Diners have come to expect social distancing measures, contactless payments and menus activated by QR codes, as much as they would a knife and fork. Outdoor seating has seen widespread adoption, but many restaurants will have to put on their thinking caps with cooler weather on the horizon.
Restaurants and hoteliers have had to make the most of every opportunity, so nothing is off-limits. Here a social media user mentions restaurants offering meals in private hotel suites due to inclement weather.
And it’s finding unique alternatives to unusual circumstances like this that have propelled Doordash and Airbnb into the stratosphere.
Going Public or Bust
Food delivery wasn’t necessarily on the most stable footing at the beginning of this year. Some of the major players like Doordash, Postmates and Uber Eats had discussed mergers or public listings just last year in efforts to shore up finances.
But all of that changed with the onset of the pandemic. Demand for food delivery exploded, and Doordash made the most of it. It’s truly a testament to the effectiveness of using market intelligence powered by social media listening to stay ahead of emerging trends.
By May, Doordash was pulling in 44% of U.S. meal deliveries and then in June secured $400M in funding to keep the drive alive.
But they not only adapted to changing markets this year; they knocked it out of the park. Doordash shares began trading on December 9th at $102 and finished the day at $188 per share, a gain of 86%.
Their newfound market capitalization boosted the company into the neighborhood of $68B, which is over four times higher than their last private valuation of $15B back in June. The social sentiment is through the roof as $DASH became the third-largest IPO this year.
Airbnb has offered up a masterclass in agility this year, and they hit pay dirt because of it. While doors were shuttering throughout the hospitality industry, Airbnb got down to basics and reinvented itself. And told the story along the way.
As travel screeched to a halt and bookings plummeted, the company leveraged its network to boost its ‘online experiences.‘ Would-be travelers tuned in in droves to creative hosts offering virtual travel experiences.
In the meantime, Airbnb worked with hosts to ensure high standards of cleanliness meant to ease the concerns of hesitant travelers. Hosts that met specific criteria, including longer wait times between guests, were given a badge to display on their listings showing that safety was their number one priority.
And these moves paid off in spades. Airbnb entered the stock market on December 10th at $68 and closed the day at $144, a growth of 113%.
Airbnb shares brought in $3.5B and closed with a market cap of over $85B, making it the largest IPO this year.
It’s not been a shabby couple of days for these two brands whose IPO conversations were negligible for most of the year. And savvy market intelligence made all the difference.
Vaccines for the coronavirus are beginning to be rolled out worldwide, which could be the beginning of the end of the pandemic. And just as Doordash was better suited than Airbnb going into the pandemic, the opposite may be true coming out.
As anxieties begin to ease as the virus is brought under control, Airbnb will have a more straightforward path to normalcy as travelers throw caution to the wind. Airbnb is situated beautifully on the consumer sentiment spectrum, so the main question is how much business will boom as the pandemic comes to a close.
Doordash, on the other hand, is burning bright in passion intensity but could stand to see increased competition for smaller market share as communities open up and eating habits shift.
And Doordash is aware of this as they mentioned in their SEC filing, “the circumstances that have accelerated the growth of our business stemming from the effects of the COVID-19 pandemic may not continue in the future.”
While Doordash’s article count is generally positive, concerns are being aired that the stock is overpriced, and the IPO is a test for unprofitable startups. To be fair, they turned their first profit in Q2 of this year. Time will surely tell, but Doordash may have work to do as the pandemic fades.
Whatever the future holds, new consumer buying patterns and shifting sentiments are sure to follow. Brands that build out their market intelligence on diligent social media listening stand to perform well on emerging trends as Airbnb and Doordash did this year.
Is your brand poised to catch the next wave as markets shift yet again? Be sure to reach out for a demo and stay on top of the latest market intelligence, so the world is singing your praises next year.