Airbnb CEO Brian Chesky founded his company in a San Francisco living room in 2008 and is now among the world’s most valuable companies.
It distinguished itself with an inventory of mostly short-term rentals (it takes a cut of about 15%) and was preparing for what should have been a triumphant public listing.
The pandemic has crushed the global economy and shut down anything resembling a hotel….
The online holiday letting agency has suffered an 85 per cent downturn in global business, knocking an estimated $30 billion off its value as it heads for a long-delayed float on the share market.
“I’m not sure if there’s a more difficult thing that a CEO of a travel company could ever do than go through this,” Chesky says. “You feel like you were T-boned, or like a torpedo has just hit the ship.”
No stranger to difficult obstacles …Chesky started Airbnb in the middle of the Global Financial Crisis and Airbnb will not only prevail from the pandemic, but boom!
In 2008, homeowners were struggling through the U.S. foreclosure crisis & Airbnb offered a way to help cover the mortgage payments.
Travellers who couldn’t afford costly hotels were offered an alternate accommodation option with cash-strapped “hosts”.
Why stay at a standard hotel in a CBD area when you could rent a room in a cool-but-gritty neighbourhood in Brooklyn or the like and stay a few more days?
Now…there is a growing sense that when Airbnb comes back, it will do so with a vengeance…
Already, according to an article in Forbes magazine, forward bookings are up in countries much harder hit by COVID-19 than Australia has been.
The love / hate relationship with Airbnb…
What worries many opponents to Airbnb is that the majority of voters like using short-term rentals when they travel … or at least like the idea that they might.
Politicians too love Airbnb…Why? Simply because they help to bring tourists into our cities and have created their own service industry of cleaners, property management companies and many other opportunities.
The only people who don’t like them are some permanent residents of apartment blocks, the neighbours of Airbnb properties, and the hotel and motel industry.
Today Airbnb has more than 7 million listings, including 1.3 million in Asia, according to AirDNA.
Airbnb has said its revenue could drop by 50% this year, according to projections shared with prospective investors. Of course, it could be even worse. No one knows when the world will decide it’s safe to go on holiday again.
The company has already dropped approx. 25% of its workforce (1,900 employees) and cancelled $800 million in marketing spending.
Other actions, such as full refunds to all the guests who can’t travel, host Covid-19 refunds and the Super Host Relief Fund will have bigger implications.
Airbnb had more than $1 billion worth of reservations on its system when the pandemic took effect, and unlike hotels, which don’t charge a guest’s until checkout + usually allow no-penalty cancellations, Airbnb requires guests to prepay their bookings.
However, Chesky is making a similar wager that the post-Covid-19 recovery will look a lot like the recovery from the GFC, with hard-up owners more eager to list spare bedrooms, garage apartments, and second homes onto the platform.
Guests will keep renting Airbnb properties, even after the coronavirus outbreak subsides, as social distancing enables more people to be freed from their offices.
“This is a giant experiment where people are realizing they can work remote,” Chesky says. “We think that’s a huge opportunity.”
Time will tell & for most of us….we can’t wait!
Referenced – Bloomberg + Australian Financial Review