Airbnb Inc. reportedly lost $322 million in the first nine months of 2019 on rising costs, raising questions about its valuation going into an initial public offering later this year.

The Wall Street Journal reported the figure today, saying that the loss came from rising administrative and technology costs despite increased revenue in the third quarter. The report added that the company’s board recently questioned executives over why costs were growing more quickly than revenue.

The figure is also surprising because Airbnb previously had been profitable, booking a $200 million profit in 2018, a rare feat among “unicorn” startups worth more than a billion dollars on paper.

Exactly when most of the losses were booked is not known. A separate report in October claimed at Airbnb had booked an operating loss of $306 million in the first quarter of 2019. That figure was never confirmed by the company, but if it was accurate, the nine-month loss would suggest that Airbnb reined in some of its costs over the year or had stronger-than-expected bookings.

Increasing costs are not Airbnb’s only issue going into an IPO, currently reported likely in the third quarter. The spread of Wuhan coronavirus is also affecting bookings, not only within mainland China but also outside it as well as Chinese tourists mostly stay at home.

How badly Airbnb has been hit by the spread of the virus is unknown since the company remains private and does not reveal booking stats. But the South China Morning Post reported Feb. 10 that the market had collapsed in China, noting that the market size for short-term rentals was around $7 billion in Asia in 2018 and China commanded close to 60% of the market. Countries throughout the region are reporting a collapse in Chinese tourism, with hotel bookings in places such as Thailand down more than 50%.

With Chinese tourists staying home, hotel bookings are collapsing in the region and a similar figure is likely to be the case for Airbnb bookings as well. The virus has yet to be contained, making further cancellations more likely. That has to hurt Airbnb’s bottom line, particularly given that it was focusing on China as part of its global growth strategy.

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