It sounds like a bad joke. Now, at a time when the future of the travel industry couldn’t be more uncertain, the accommodation rental platform Airbnb hits the trading floor.

Airbnb shares opened at $146 (€120.3) on the Nasdaq on Thursday, far above the initial public offering (IPO) price of $68 apiece. The stock hit a high of $165, rising 142.6% after the debut and making the San Francisco, California-based group worth more than $100 billion.

The listing comes 10 months after the coronavirus pandemic upended travel and appears to have stunned even Airbnb Chief Execturive Officer Brian Chesky. “I don’t know what else to say,” Chesky said when told about the potential opening price in a Bloomberg Television interview. “I’m very humbled by it.”

Frankly, Airbnb could use the money. A glance at its nine-month balance sheet shows how much the company has suffered from the fallout of the coronavirus pandemic. Bookings fell by 39% in the last three quarters, reducing revenues by a third to $2.5 billion. Losses compared with the same quarters last year doubled to almost $700 million.

To cushion the blow, Chesky has pulled out all the stops. As early as this spring, he cut marketing expenses by $1 billion, slashed executive salaries by half, and even waived his entire salary. Still, it wasn’t enough. A good quarter of the workforce had to go, a total of 1,900 employees. Even a $2 billion capital injection from investors like Silver Lake didn’t help. The company was left with a big deficit for the year as a whole.

The Airbnb advantage

Nevertheless, Airbnb went public on Thursday, bolstered by a recent bright spot. In the third quarter, the company surprisingly recorded a net profit of $219 million. “Our business rebounded faster than anyone expected.”

Indeed, Airbnb is weathering the crisis much better than the traditional hotel industry. “Airbnb has enjoyed an increase in demand during the pandemic from people seeking to get away from the city,” strategy consultant Peter Cohan, who teaches at Babson College in Massachusetts, told DW.

While sales of apartments in the world’s metropolises have fallen significantly, the rural vacation homes market is booming. This is where Airbnb has the advantage over traditional hotel chains.

Read more: Overtourism in Prague: Ideas for post-coronavirus times?

Added to this are its comparatively low operating costs. To keep its own business running, Airbnb has little to pay other than the salary of its employees. The direct costs of vacant houses and apartments are borne exclusively by the property owners. Unlike other hotel and travel providers, Airbnb doesn’t have to pay for vacant accommodations, half-full planes or docked cruise ships.

The importance of sharing

It’s the basic concept of the sharing economy that is paying off for Airbnb now more than ever. “Access is more important than possessions.” It’s the mantra that made successes out of companies like ride-hailing service Uber or shared workspace provider WeWork.

The idea was born out of the founders’ own financial difficulties. “I never thought about being an entrepreneur,” Chesky admitted in an interview with Linkedin founder Reid Hoffman a few years ago.To afford the high rent on his apartment in San Francisco, he came up with a simple idea.

Together with his roommate, Airbnb co-founder Joe Gebbia, Chesky set up three air beds in his living room. He then rented the air beds at a low price to people participating in a design conference near their apartment. Chesky added breakfast free of charge, giving rise to the name Airbnb, short for “Airbed and Breakfast.”

Twelve years later, the company has become the largest private accommodation platform in the world. More than four million providers in 220 countries now regularly rent out their houses and apartments. Since 2017, tours and activities with locals can also be booked on the platform. For its services, Airbnb charges a commission of the sale, an impressive 15%.

Graphic showing number of Airbnb listings in 10 European cities

Regulators pose problems

The company has generated more than $110 billion since it was founded. But the business model is regularly criticized. For years, the company has wrangled with cities over strict regulations for renting out private apartments on Airbnb. Some have accused the platform of causing housing shortages and rising rents in metropolises such as Barcelona, Paris and Berlin.

More than two-thirds of the most popular city destinations found on Airbnb now restrict renting through the platform. In the stock exchange prospectus, the company warns of potential consequences. “The number and significance of these claims, disputes, and proceedings have increased and we expect they will continue to increase,” it says. In large cities like New York, regulations and lawsuits could lead to long-term revenue losses.

Still, company experts like Cohen are confident the IPO will be a success. “I do not think those regulatory issues will deter demand for Airbnb,” says Cohan, himself a venture capitalist who invests in startups. Of course, the investment is risky, especially since the company has yet to prove its adaptability in the long term. But Airbnb is so well-known now even among private investors that backers will probably turn a blind eye in view of expected increase in sales.

This article was adapted from German.