Airbnb Survival; now and the future of tourism and rentals
Joe Gerbia and Brian Chesky came together to form Airbnb and this company has become a vital part of travel in several countries. Although it has received a lot of controversial comments and sues, it has proven too be a great plus to so many countries both in the local rural region and in city/urban region. The company does short rental of space to travelers at a cheap rate, thereby not reducing the expenses to be spent in a hotel.
The company make profit by linking rentals and travelers together and collecting a percentage from both sides. This hasn’t been a problem to both parties but there came a problem, and this started with having large numbers of guests. Although, this is not the major concern of this post, but it is as important a problem and cannot be overlooked. Airbnb started receiving sues about thefts, racism, prostitutes using the services for brothel and many more. Airbnb then found a way around it and took stringent measure on its terms of service.
The company has been growing as a unicorn and was expected to hold its IPO and ring the opening bell in 2020 but this is still left undone because of the Covid-19 pandemic. Unlike other companies like Uber and Lyft which has gone public yet not profitable, Airbnb is already profitable as a Unicorn and Cheky a co-founder said that the company isn’t in a rush to go public since it isn’t looking for funding.
Since the pandemic began a lot of people haven’t traveled, Planes were laying on the ground without flying for months, tourism saw its greatest fall as everyone were asked to stay indoors enforcing a compulsory lockdown on virtually all countries and Airbnb wasn’t left out. With Airbnb, reservations dropped by 90% and a lot of other reservations were canceled this making the company’s valuation of $36 billion to drop to $18 billion (Airbnb isn’t the only company that experienced this in the tourism industry).
The company has been spent a lot of money during this pandemic to hosts and guests who got cancelations on their end. The company has also fired 1900 employees which amounts to 25% of its staff (at least better than companies that fired 90% of their workforce), the senior employees like Chesky and Gerbia has decided on a 50% cut on their salaries for 6 months. The crisis has generated affected a lot of people and businesses; Airbnb inclusive. Do you think that the tourism industry will be the same in the next few years if there are no vaccine, do you believe that Airbnb can survive this down times accompanied by a recession?
People might not feel very safe to travel without a vaccine besides now there are other means of communication with clients over very long distances without travelling.
Companies like this can only hope that a vaccine is found and everything gets back to normal.