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One of the industries that were hit the hardest during the coronavirus pandemic was, without doubt, tourism. Vacant hotels, halted traveling, closed borders, the future of tourism was looking bleak and its recovery will take quite a lot of time and money. However, if we need to name one survivor of this movie-like year, then that simply has to be Airbnb.

Airbnb as a Hotel Alternative

Airbnb doesn’t own any property. The sole purpose of their website and mobile application is to connect hosts with guests. Airbnb was a go-to accommodation arrangement for millions of travelers all over the world.

People were ditching traditional hotels for an authentic experience in staying in apartments hosted by people just like them.

Such a simple way of finding and booking the most suitable apartment, room, or whole house really brought a revolution in this industry. 

Changing Strategies

And then the coronavirus happened. Nobody was prepared for it, including Airbnb’s CEO, Brian Chesky. Focused on building his lifelong dream, Chesky wasn’t ready to see it crumbling down in the face of the global pandemic. 

Some drastic changes needed to be made right there and then.

At the end of March, the first things to go were Chesky’s and co-founders’ salaries. They gave them up, but they also had to cut the executive’s salaries in half. They ceased all marketing, which saved them in addition to a handsome sum of almost $1 billion. 

However, that wasn’t enough. 

On May 5, Chesky needed to announce that a quarter of his employees will lose their jobs. Exactly 1,900 people were facing layoffs. 

Despite that, the former employees were allowed to keep the company’s Apple laptops and they received yearlong health insurance. 

To make their departures as painless as possible, Airbnb even published an online talent directory for each employee who lost their job.

Back to Basics

After all these decisions, Airbnb was still facing uncertainty. Chesky needed to drop his idea of including the traditional hotels and luxury properties listings on the app. 

Their development of the “Experiences” section also needed to be reevaluated. Nobody was looking for wine tastings, museum tours, and yoga retreats during the pandemic.

The focus needed to be switched back to the main business. But how?

Quarantine as a Life-Saver for Airbnb

As the lockdown measures were ceasing and the next ones were approaching, families, friends, and couples were seeking quarantine lodgings. And to whom have they turned to? To Airbnb, of course.

Chesky saw the opportunity. With the loss of $397 million in the second quarter, there was no time to waste. He quickly planned out the website and app redesign, focusing on local tourism. 

Nobody was traveling abroad, but a whole lot of people were traveling around their countries. Local tourism was and is still blooming, and Airbnb took a chance of that.

Mountain cabin, beach house, or a cozy apartment in the neighboring city, Airbnb has everybody covered. July 8 arrived and people started booking their accommodation at the same rate they were booking just before the pandemic.

(Un)certain Future for Airbnb

With a $2 billion loan from investors (including Silver Lake and Sixth Street Partners), Airbnb is still struggling with the uncertainty. Is there going to be a vaccine? Will the coronavirus cases drop to zero? Nobody knows.

Chesky needed to face the music and his current plan is that Airbnb will go public by the end of this year. It is believed that Airbnb’s shares will be listed at a valuation of $30 billion or even more.

By listening to its customers and shifting its offer, Airbnb managed to hire back a number of its previously laid-off employees. The latest Airbnb announcement is that it will be reinstating its employee bonus program. What the future holds for Airbnb is left to be seen, but from here it looks like it will be a bright one.