Founders: Brian Chesky (CEO), Joe Gebbia, Nathan Blecharczyk
Headquarters: San Francisco
Funding: $5 billion
Valuation: $18 billion (PitchBook)
Industry: Hotels, travel, hospitality
Previous appearances on Disruptor 50 List: 7 (No. 7 in 2019)
Among the companies hardest hit by the coronavirus pandemic and its stranglehold on travel is Airbnb. In early May the company laid off 1,900 people, or about 25% of its workforce. Prior to the layoffs, the San Francisco-based company had 7,500 employees and was eyeing an IPO, with bankers lined up to lead the offering. CEO Brian Chesky recently told Bloomberg and CNN that an IPO was still a possibility in 2020, even as the company tries to figure out what it — and travel — will look like in a post-Covid world.
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In a note to employees at the time of the layoffs, Chesky said, “We are collectively living through the most harrowing crisis of our lifetime, and as it began to unfold, global travel came to a standstill. Airbnb’s business has been hit hard, with revenue this year forecasted to be less than half of what we earned in 2019.” In the wake of the pandemic, the company has also instituted a hiring freeze, suspended its marketing, cut executives’ salary and said it did not expect to give out bonuses for 2020. To get through the crisis, the company raised $1 billion in new debt funding. The Wall Street Journal reported in February that Airbnb lost $322 million over the first nine months of last year, after reporting a $200 million profit in 2018, as it ramped up spending in advance of its then-expected IPO.
Adding to its woes is the fact that hosts — the folks who rent their properties out on the Airbnb platform — are using this downtime to launch their own websites. This gives them the ability to rent directly to users and save the 14% to 20% fee that Airbnb typically takes. During the shutdown of the past few months, when so many bookings needed to be canceled, many hosts were unhappy with Airbnb’s reimbursement policies.
As it looks ahead to when people will begin to travel again, the company has developed new cleaning protocols to help guests and hosts feel more comfortable. In May it launched Cleaning Protocol, a set of more in-depth guidelines for how to clean every room in a home. A host can earn a certification that it cleans this way and can identify itself as such so that guests are aware at the time of booking. The company is also following CDC guidelines that say there should be a 24-hour waiting period between rentals.