Airbnb to pay $ 500 million for the Olympics

Airbnb has signed a sponsorship agreement with the International Olympic Committee (IOC) until 2028. This is the first major sponsorship deal for Airbnb, which is also preparing for an initial public offering. “The partnership, spanning nine years and five Games, aims to create a new standard of accommodation that will benefit host [Олимпийские игры] cities, spectators and fans, as well as athletes, ”the IOC said in a statement.

It does not say about the size of the contract. According to the Financial Times, it is about $ 500 million and involves a significant payment to the Olympic Committee, but also takes into account the cost of services that Airbnb will provide, including free accommodation for athletes and sports officials. The newspaper was told about this by people who are aware of the details of the negotiations.

The terms of the arrangement roughly match those of other recent sponsorship deals involving, for example, companies such as Bridgestone and Panasonic, which have agreed to pay $ 200-250 million over a four-year Olympic cycle.

Airbnb will sponsor the next five Summer and Winter Olympics in Tokyo (2020), Beijing, Paris, Milan and Los Angeles. All these cities are among the largest service markets. However, the company did not have good relations with everyone. For example, Paris is the largest market in the world for Airbnb, but a conflict with the city authorities in the early years of the rapid expansion of the service forced Airbnb to accommodate them, and now, at the request of the city hall, the company collects taxes from landlords to transfer to the budget.

Airbnb has entered into similar agreements in recent years with the authorities of many other cities.

Now, through its partnership with the IOC, Airbnb will be able to significantly expand its advertising and business capabilities. While the company had previously ditched major marketing campaigns such as participating in travel package deals with airlines, the company now decided that participation in the Olympic movement offered a rare opportunity to make the brand more popular in different markets, to bring it to more landlords and travelers. The FT was told about this by a person familiar with the position of Airbnb.

“Thanks to the partnership [между МОК и Airbnb] Hundreds of thousands of new landlords will emerge over the next nine years, giving local residents the opportunity to generate additional income by providing accommodations for visiting fans, athletes and other Olympic participants, as well as introducing them to local attractions. For visitors, the Airbnb community offers a more distinctive way to experience the host cities [Игр] and feel the pulse of local community life. And for cities, the Airbnb community provides a more environmentally friendly way to accommodate tourists who are increasingly flowing, ”the IOC said in a statement.

This could be an additional contribution to the preparations for the IPO, which Airbnb is expected to hold next year. Unlike a number of well-known companies that have had an IPO or attempted to place stocks this year (such as Uber and WeWork), Airbnb is not losing much. According to a FT source, the company has about $ 3.5 billion in cash, which allowed it to enter into a deal with the IOC. Earlier, the media reported that for an IPO, a company can choose a so-called direct listing – the inclusion of shares in the listing of an exchange without the process of placing securities and raising funds. Airbnb co-founder Brian Chesky recently told The New York Times that he had “no news” on the IPO, but added, “What we definitely don’t need now is to raise new funds.”

Perhaps, the fact that the parties had already cooperated during the Olympics in Rio de Janeiro in 2016 also prompted Airbnb to come to an agreement with the IOC.Then the organizers of the Games faced a shortage of accommodation facilities. Airbnb will be an important partner for the city to help overcome a major housing problem, said Sidney Levy, chief executive officer of the organizing committee for the Rio de Janeiro Olympic Games, when signing a sponsorship deal in 2015 (the size of which Airbnb did not disclose).

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