303.320.1556 info@rmcherrycreek.com

Airbnb suffers setbacks due to the pandemic

by | May 11, 2020 | Blog

When Airbnb was founded, it wreaked havoc with the traditional hotel industry. Now a new disrupter is wreaking havoc with Airbnb: coronavirus.

With travel dropping off a cliff and predictions that even when tourism picks up, guests won’t feel comfortable in random homes with random cleaning procedures, the company is feeling the pandemic pinch.

According to data analysts, as reported by CityLab, Airbnb bookings dropped across Europe 80% at the start of the pandemic. “By the middle of March, bookings in New York City, San Francisco and Seattle had already dropped more than 50% compared to the week beginning January 5.”

Meanwhile, founders’ salaries have been put on hold, those for top executives cut in half, and the company is seeking ways to appease its customers and hosts. For example, to compensate hosts suffering lost income from the pandemic, Airbnb has set up a $250 million fund which will pay them up to 25% of their decreased income, “with an additional $10 million bailout fund for super-hosts.”

The company is also allowing cancelations of any pre-lockdown bookings for stays through May 31.

CityLab reports that going forward, rural areas, rather than crowded cities, will likely see the first resurgence in demand. “While people might be more wary of traveling to other countries, urbanites who have been cooped up in city homes under lockdown may well take the opportunity to travel somewhere nearby for some open space and fresh air once it’s safe to do so,” notes CityLab.

However, perhaps little will change in the long-run. After SARS and MERS, Michael O’Regan, senior lecturer in marketing at the UK’s Bournemouth University, told CityLab, “things ended up going back to business as usual pretty fast. I don’t think Covid-19 is a fatal blow. I think a lot of people will go back to hosting.”

Curious about Denver real estate?

Have questions about the Denver market?

Categories