The pandemic brought tourism to a halt. Then Airbnb noticed a shift that might have saved its business — people were booking millions of rentals close to home.
The challenges and opportunities we’ll discuss in this insight were informed by a Wall Street Journal article that ran on Tuesday, October 13, 2020.
As the travel industry works to find its footing, Airbnb’s pandemic reboot proves people still want to travel, but just not too far from home. And often where they can still work during their trip.
Love them or hate them, Airbnb is providing some guidance in these uncertain times. Their biggest observation from closely studying analytics led to major changes:
Big cities visited by tourists had previously been Airbnb’s strength. But early in the pandemic analytics indicated that urban residents were searching for vacation rentals in neighboring towns and cities. By June, the company had redesigned its website and app so its algorithm would show prospective travelers everything from cabins to lavish beach houses near where they lived. In August, more than half of bookings made were for stays within 300 miles of the guest’s location, according to the company.
Brian Chesky, the CEO of Airbnb, noted several big takeaways from his pandemic pivot. We can all take a few lessons from his experience:
- The most important takeaway: Move quickly. It’s imperative to keep up with a changing industry.
- Focus on your core business. Don’t overextend spending on marketing, staffing, or noncore projects.
- Listen to your customers—in Airbnb’s case, both travelers and property owners.
- Keep communication channels open. After laying off 25% of its staff, the CEO increased communication with remaining employees, switching to weekly Q&As from monthly.
Not out of the woods yet.
While Airbnb has seen a slow but steady recovery since their pandemic pivot, they definitely have challenges cut out for them:
- Based on their demonstrated history of spending with often reckless abandon, they must remain disciplined enough to keep costs down.
- They will need to stick to their core business rather than on pre-pandemic forays into TV shows, feature films, developing Experiences, etc.
- Cities are continuing to weigh zoning restrictions on short-term rentals.
- Due to their nature, Airbnb still struggles to police crime and safety on its listings.
- Relying solely on individual hosts for their inventory leaves them open to an unpredictable future of growth.
The Business of Business Travel
“9/11 was before Zoom.”Brian Chesky, CEO of Airbnb
According to Chesky, he believes “The line between travel and working is blurring.” He feels the industry at large was betting on business travel recovering faster than leisure, because that’s what happened the last time travel shut down in the wake of 9/11. Chesky has been betting on the opposite, for a simple reason: “9/11 was before Zoom,” he said.
As we all plod along through a pandemic with an uncertain end in sight, we can take heed of one anecdote: people want to travel. Read, follow rabbit holes, and consider all that you can find that you think applies to your organization. Curate and regularly share your observations with your stakeholders and industry colleagues. If you would like to discuss your situation with an objective travel and tourism resource, we are offering 3 free one-hour consultation call slots per week to brainstorm with you on your situation. To book an upcoming consultation slot, contact us.