Airbnb is one of the many businesses in the travel industry that has been hit hard by the coronavirus pandemic. In March 2017 Airbnb was valued at $31 billion. By the end of April 2020 it was worth $18 billion.
At the beginning of May, the company was forced to lay off 25% of its staff, nearly 1,900 individuals. CEO Brian Chesky told employees that its 2020 revenue will be less than half of what the company earned in 2019.
Airbnb was founded in 2008 by three friends from college, who started with their own apartment as the first listing. The company grew quickly and today has more than 7 million listings worldwide. In January 2020, Airbnb saw 50.2 million website visits. Airbnb’s competition VRBO saw 14.7 million site visits in the same month, according to data from SimilarWeb.
But the global pandemic is proving to be Airbnb’s biggest challenge yet. The company is struggling with cancelations and reimbursements after Airbnb announced it would be refunding customers whose reservations fell within a certain timeframe. This angered many hosts, who were stuck having to pay back most, if not all, of the cost of the rental. And while social distancing measures were in place, some local governments deemed short-term rentals as non-essential businesses, adding more stress to hosts who rely on Airbnb for income.
Many guests were also frustrated by the way Airbnb handled refund requests. On March 14th, Airbnb announced an extenuating circumstances policy that superseded the cancelation policy set by Airbnb hosts. If a guest booked a trip on or before March 14th, with check-in dates between March 14, 2020 and April 14, 2020, that guest was allowed to cancel eligible trips without penalty. The policy was extended to allow guests with reservations up until May 31st, and then again to June 15th, to be eligible for either an Airbnb credit or – the more selective option – a full cash refund. But it was more difficult for many guests, and some will never get their refunds.
It was speculated that Airbnb would go public in 2020, but that goal is growing more and more distant. With the threat of more cancelations as the pandemic cripples the travel industry, guests, hosts and investors alike are left asking what Airbnb will look like after the novel coronavirus pandemic, or whether the company will survive at all.