GLOBAL COALITION QUESTIONS VERACITY OF AIRBNB IPO DISCLOSURES

45 Neighborhood, Housing Organizations Ask U.S. Regulators to Demand Accurate Financial, Risk Data from Company with Significant Credibility Issues

SAN FRANCISCO, September 17, 2020 – Today, a letter signed by 45 neighborhood, community and affordable housing organizations from three continents and seven countries was sent to Jay Clayton, Chairman of the U.S. Securities and Exchange Commission (SEC), raising critical questions about the finances, risks and business practices of Airbnb, Inc. in response to the latter’s confidential registration statement for an initial public offering (IPO) with the Commission in August.

In the letter, the groups argue that Airbnb’s prior public pronouncements about its business model, operations and policies have repeatedly proven false, inaccurate and controversial, and are often directly contradicted by independent analysts and actual practices.

Airbnb claims, for example, that it is in the business of “helping regular folks make ends meet” by renting spare rooms in their homes from time-to-time. Yet independent research has shown again and again that whole-home rentals run by commercial operators – many with hundreds of offerings – are the larger source of the company’s revenue, and that those units are essential to its growth in a time of COVID.

The groups are asking the SEC to require Airbnb to disclose the amount of revenue it derives from both “home sharing” and commercial operators, and to do so by city, not country. In addition, since short-term rentals (STRs) are prohibited or severely limited in many of the company’s largest urban markets, the groups are seeking an accurate accounting of the income the corporation generates by facilitating illegal rentals.

“Whether it’s the ‘myth of home sharing’ espoused to cover up the vital role commercial operators play in its business model, or the ‘bans on party houses’ trotted out every time there’s shooting at one of its rentals, Airbnb has a fundamental credibility problem,” says JJ Fueser of Fairbnb Canada. “Absent firm direction from the SEC compelling the company to come clean about its practices, investors could be at great risk if they simply rely on public statements that have repeatedly proven false or inaccurate. Protecting public investors is the Commission’s primary responsibility. Given Airbnb’s remarkable history of obfuscation and opaqueness, this is one IPO that shouldn’t come to market without a thorough vetting by the SEC.”

Fairbnb plans to release a new report early next week, outlining Airbnb’s reliance on revenue from illegal residential rentals to tourists in Canada. “In its largest market, we estimate up to 56 percent of Airbnb’s income could be derived from illegal ‘ghost hotels,’” says Fueser.

Signatories to the letter include organizations that have actively pressed local, state and provincial governments for effective regulations of STRs, in order to preserve the availability and affordability of housing for working families and the quality of life in residential neighborhoods. The letter is available here.

Contacts:

Dale Carlson                                        Thorben Wieditz

ShareBetter SF                                    Fairbnb Canada

415/310-8616                                     +1 647-409-8997

carlson@dale-carlson.com              fairbnb@fairbnb.ca