The coronavirus hasn’t been kind to anyone. As the travel industry braces itself for the new normal, it’s time to take a look at how COVID-19 has impacted Airbnb. Will business go on as usual or is the company fighting for survival?
According to Business Insider, Airbnb has recently cut 1,900 jobs, which represents 25% of its staff. After the pandemic halved the company’s revenue, the job cuts were seen as a way to help the company survive. This is despite the home-sharing startup having raised US$2 billion in the last month through debt financing.
“We are collectively living through the most harrowing crisis of our lifetime,” said CEO Brian Chesky on May 12. Chesky added that the company needs to ‘Reduce our investment in activities that do not directly support the core of our host community.”
COVID-19’s global impact on Airbnb
Owners of small apartments in Greece’s Koukaki, who had been renting them on the Airbnb platform in order to provide income during the financial crisis, are once again struggling. “The reservations stopped abruptly,” said Romina Tsitou, an Airbnb host since 2014. “I hope I won’t have to put them for long-term rental, but I may have to if this situation drags on,” she added.
Meanwhile, Stefania Dimitroula has already put her apartment up for long-term rental. “Since the beginning of the summer of 2018, it was fully booked via Airbnb, almost exclusively by foreign tourists,” she said. Before adding that “100 % of the reservations for April, May and June have been cancelled.”
In Barcelona, Sybille Campagne’s calendar is empty. “For July-August, all reservations were cancelled,” the French woman explained. Despite that, she isn’t considering taking her apartment off the platform because it accounts for 80 % of all her reservations.
Similarly, Juan Quilis, a 35-year-old telecom technician who owns an apartment in Seville, is also sticking with short-term rentals for the time being. “I’m not too worried for now, because I have a savings cushion but if I see that things don’t come around, I will put my apartment in a long term rental. As a last resort.”
How Airbnb plans to survive the pandemic
COVID-19’s impact on Airbnb now sees the company returning its focus to home sharing – people who offer accommodations in the rooms, apartments, and houses that they own or manage.
Chesky mentioned the organisation’s planning on halting its efforts in transportation and in Airbnb Studios – its effort to produce streaming travel videos. Additionally, the company also is planning to cut back on investments in offering hotel rooms and in Lux, it’s luxury accommodations effort, he said.
Meanwhile, a study conducted by Spitogatos, the most popular online property ads network in Greece, found a clear rise in apartments listed for long-term rentals in mid-April. With the coronavirus causing a purge on short-term rentals, Spitogatos CEO Dimitris Melachroinos believes the long-term rental sector will keep rising as it will be seen as “a safer option”.
Closer to home, Airbnb has expanded its Frontliners Stays programme. A joint effort between Airbnb and Malaysian hosts, endorsed by the Ministry of Health (MOH), this programme allows frontliners to book free and paid stays directly via the Airbnb platform, allowing hosts to help even more people who are in immediate need.
Source: Business Insider, AFP Relaxnews, New Straits Times