When the pandemic brought the world to a standstill, most people put their travel plans on ice. Nobody could have predicted that would happen, least of all Brian Chesky, the co-founder and CEO of Airbnb: "I did not know that I would make 10 years' worth of decisions in 10 weeks," Chesky said in a recent interview with The Wall Street Journal.
What the company did in that short time span was impressive--at least according to Michael Seibel, the chief executive officer of Y Combinator, when talking to the WSJ about Chesky's pandemic response.
Though Airbnb let thousands of workers go in its marketing department, it also retooled and retrained its focus in a way that Chesky says the founders hadn't done since the company launched. Here are three key takeaways from the story of Airbnb's turnaround:
When Airbnb decided to refund guests for cancellations, the company faced backlash from angry property owners. Chesky tried to soften the blow by refunding hosts for a third of canceled stays with funds loaned by investment firms Silver Lake and Sixth Street.
"We are nothing without you hosts. You are our lifeblood," said Chesky in an interview with The Wall Street Journal. It's a reminder to take care of the people who--literally--keep your doors open.
As states eased travel restrictions, Airbnb saw an uptick in reservations in local areas. Over half of Airbnb's August bookings were within driving distance--300 miles--of the guest's location. So Airbnb adjusted its recommendation algorithm to show more local stays. By leveraging industry trends and data from their consumers, companies can make better-informed decisions and stay aligned with what customers want and need.
Airbnb had grand plans for expansion before the pandemic hit. It was working on building Experiences, a feature that would allow users to book activities such as wine tastings and pottery classes. And with last year's acquisition of Hotel Tonight, Airbnb planned to add hotels to its platform. The pandemic forced Chesky to set those plans to the side. Airbnb's core business model is and always has been connecting homeowners with short-term renters. When the pandemic made that business model more attractive than its recent foray into expansion plans, it went back to basics. By downsizing and pivoting, Airbnb has been able to stay afloat during the pandemic and, after suffering a 66.5 percent year-over-year reduction in revenue in the second quarter, is on track to report profits in the third quarter.