Airbnb doubles its loss in Q1

But it’s not necessarily a bad sign

Short-term rental site Airbnb doubled down on its loss from the first quarter of 2018 in the first quarter of 2019, but the company appears more ready for growth than ever.

Airbnb’s operating loss more than doubled from the first quarter 2018 to a loss of $306 million in the first quarter this year, new data shows, according to an article by Cory Weinberg for The Information.

But that could be a good sign and point to further growth for the company. Why? Because the loss is due to an increase in marketing spending. In the first quarter, the Airbnb boosted its sales and marketing spending to $367 million, a 58% increase from the same period in 2018, according to the article. In fact, this represented the highest spending category at the company.

The company is gearing up for major growth, and it is hoping its efforts pay off as it is poised to go public in 2020. Airbnb has not laid out a specific timeline yet, but continues to say it will happen “during 2020.”

In an interview with Business Insider earlier this year, Airbnb cofounder Nathan Blecharczyk explained the company would be taking steps to go public in 2019:

“We have already said that we are taking the steps to be ready to go public in 2019,” Blecharczyk said. “That doesn’t mean we will go public in 2019.”

At the end of 2018, Airbnb announced that it hired Dave Stephenson away from Amazon to be its new chief financial officer.

But boosting its marketing may not do much as cities across the U.S. continue to tighten their grip around Airbnb and other short-term rental sites. For example, New York City Mayor Bill de Blasio recently announced that the city is issuing a subpoena to Airbnb, demanding that the short-term rental site turn over the listing data that’s at the center of a legal battle between the two sides.

And many other battles continue in various states against Airbnb and other short-term rental sites. It remains to be seen how these battles could affect the gig economy, and how profitable the company will remain.

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