The impact of COVID-19 on Airbnb: Case Study

The impact of COVID-19 on Airbnb: Case Study

Summary

Travel restrictions in place, cancellations increased and therefore occupancy down. Hosts are suffering from minimal income from their properties and Airbnb is suffering from a lack of commission from these bookings. This case study looks at how the COVID-19 pandemic is impacting Airbnb and assesses the company's response.

Key Highlights

• Airbnb is unique in that the travelers are not their only customers. Hosts use the Airbnb platform to advertise properties, and benefit from the awareness Airbnb has in the market. Different to Online Travel Agencies (OTA’s) such as Booking.com or TripAdvisor, the hosts are in most cases individual people who are renting out their own homes, and therefore do not have the bargaining power, cash reserves or brand image that hotels would do on other OTA’s.
• Hosts are welcoming a dramatic drop in guest numbers, and in turn not receiving any income from their properties. For hosts who rely upon Airbnb for their income, it poses a worry on being able to make mortgage payments, pay bills and survive themselves during the pandemic. Airbnb’s current free cancellation period up until May 31st for bookings made on or before March 14th, mirrors that offered by hotels, Airbnb’s indirect competitor. However, the hosts have to offer the refunds on this personally, and unlike hotels do not have the cash reserves and ability to do so.
• The scale and extent of Airbnb’s handling of the COVID-19 pandemic should be carefully thought about, as each move they make will make a large difference to how Airbnb will operate after the height of the pandemic is over. Detrimental stories that have emerged in the press such as hosts offering ‘COVID-19 Retreats’ in the UK despite national lockdown rules and the backlash of troubles in obtaining refunds for stays and experiences, could leave a bad image of the brand in the future.

Scope

• This report provides insight into how COVID-19 is impacting Airbnb and looks at the affects the pandemic is having on Airbnb’s relationship with both guests and hosts.
• It also analyzes the company’s response to the current crisis.

Reasons to Buy

• Gain an overview of the current global COVID-19 situation
• Understand the impact that COVID-19 is having on the lodging industry
• Assess the impact on Airbnb
• Understand what the future may hold for Airbnb