The Future Of Airbnb: Where Will We Be In 2021
Covid-19 couldn’t have come at a worse time for Airbnb as they are being hit super hard by the corona crisis. Let alone the IPO, which would take place this year. What about all those outraged hosts who are confronted with penalty-free cancellations by guests, through no choice of their own? Airbnb announced soon after the outbreak of the crisis that guests would receive a complete reimbursement of their funds if they were to cancel a booking. Leaving hosts up shit creek, without a paddle; without a boat for that matter.
All Your Listing Eggs In One Basket
Now the question remains; will the company that emerged during the previous economic crisis survive the current crisis? Ironically, it were Lehman Brothers (and other Wallstreet banker) employees who got fired, who were amongst the first Airbnb customers. This new “Air bed and breakfast” concept turned out to be an emergency solution for the bankers, who were looking for a way to rent out their expensive apartments on the Upper East Side in New York.
How Airbnb Disruptors Became The Disrupted
Twelve years later into the future, Airbnb ranks among the most valuable tech companies in the world. Airbnb had access to, at least until recently, $ 3 billion in cash. Airbnb made money right after it was founded and was profitable for the first time in 2016. However, the grave consequences of putting your eggs in one proverbial basket have proven to be a gloomy truth for both the company and for hosts worldwide. Whereas Airbnb set out to intentionally disrupt the entire hospitality market, they are now victims of disruption themselves. The pandemic is hitting host who lived off rental arbitrage too. Imagine having five properties, and making a substantial profit and all of a sudden having all of the expenses and 0% profit.
Airbnb In Numbers And Shambles
The number of bookings, according to data company AirDNA, suggest a fall of 90 percent of bookings. So let’s assume for now that an abundance of hosts have been affected too. Even though Airbnb does not want to provide specific numbers on the fall in the number of bookings we can only imagine how large it must be.
The consequences aren’t only painful for hosts and Superhosts. It’s also excruciating for Airbnb. According to The Financial Times, founder Brian Chesky told his staff 3 weeks ago that his business had lost $ 4 billion in value as a result of the pandemic. As of today, Airbnb still has a valuation of $ 26 billion (23.8 billion euros).
The company has delayed all marketing expenses- worth $ 800 million this year – and parts of the company have implemented a hiring stop. For now, we will just have to assume that they are considering a mind-blowing mega campaign and strategy to revitalize an industry brought to its knees. At Airbnb, they have also announced they would raise an additional $ 1 billion in investment money to make business ends meet.
Saving Your Airbnb Listing
What are you doing? Are you waiting for everything to blow over? Are you contemplating another industry?
Covid-19 couldn’t have come at a worse time for Airbnb. Before the corona outbreak, Airbnb was making major investments in the platform, particularly in the fields of technology and security. The company has spent hundreds of millions in recent months. Brian Chesky apologized to (Super)hosts upset by the company’s cancellation refund policy and laid out four areas of relief, including $250 million to offset refunds to help with the financial burden. But are you going to wait for your share? Or are you going to start planning ahead? Governments will bring lockdowns to a halt and in due time the industry will be up and running. However, dynamics will have changed and the perception of the guest will be entirely different.
All Is Kinda Well That Ends Well
When this blows over, and it will blow over, you will have to use every trick up your sleeve to lure guests into your home. Fear and anxiety will prevail for a while over guests’ previously unrestricted sense of Airbnb adventure. The truth is that most hosts won’t manage to survive, especially those into rental arbitrage. Hopefully, you have managed to survive and be amongst those hosts who haven’t given up or who were creative enough to deal with an extremely strenuous situation. Even though your listing is as “super” as it was pre-COVID19, you will absolutely have to alter your strategy to some extent.
Don’t be like everyone else. Prepare for afterward, prepare for a new normal. A new normal where everything changes, but that’s ok because you know what you are doing.