Will Airbnb Ever Pay A Dividend?

Advances in technology have transformed countless industries. One that has been altered materially in the past decade or so is travel. The days of finding a hotel through arduous research or contacting a travel agent have gone, having been replaced by all-in-one travel booking solutions.

While some travel stocks like airlines and cruise operators have historically paid dividends – and significant ones at that – growth stocks in the space usually don’t. That’s to be expected as when an industry is burgeoning, it is far more advantageous for shareholders for the company to reinvest earnings and cash flow into growth ventures rather than simply paying it out to shareholders.

The newest technology travel stock – Airbnb (ABNB) – began trading on December 10th after its blockbuster initial public offering, and of course, doesn’t pay a dividend.

It is already a large-cap stock with a market capitalization above $70 billion. We have compiled a list of over 400 large-cap stocks in the S&P 500 Index, with market caps of $10 billion or more.

Airbnb isn’t a particularly young company compared to some other technology companies, which begs the question of whether Airbnb will ever pay a dividend to shareholders. In this article, we’ll take a look at the company’s characteristics and see if that’s a possibility.


Business Overview

Airbnb was founded in 2007 and is headquartered in San Francisco. The company had humble beginnings with just a single booking and was originally called Airbed & Breakfast. Eventually, the company shortened its name in 2010 to the familiar brand we know today. The company’s founders realized the potential of a booking platform and moved Airbnb to compete in the booming online travel booking space during the financial crisis.

Today, Airbnb has grown into massive player in a very fragmented market, operating a platform for stays and experiences worldwide. It runs a marketplace model wherein it matches guests and hosts through mobile devices or online, taking a fee in the process. The company’s model is different from some of its competitors as it focuses on rooms and entire residences rather than traditional hotels.

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Disclosure: Sure Dividend is published as an information service. It includes opinions as to buying, selling and holding various stocks and other securities.

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