Amid the spread of the corona virus, the world is forced to be under lockdown. There have been losses to the economy and trades to every country. The businesses across the globe are facing the wrath of the pandemic. The world is at a standstill. This situation has affected every sector of business and economy, but the most severe outcomes are for tourism industries. Future of Airbnb, a new breed of tourism company, is also in doldrums.
Hotel chains are the parts of tourism industries. Airbnb, it is among the successful startups of the silicon valley. Airbnb provides homestays to travellers across the world. It does not function like another hotel chain like Oyo. It provides stay for short term durations, in the homes of lenders who have registered their house with the Airbnb.
Impacts of the pandemic
Airbnb and its competitors have transformed the face of travel accommodation by their short term home-rentals across the world. But as the world is on hold, it has become hard to predict the fate of the tourism industry and links related to it. In the near future things look gloomy and dreadful indeed. Coronavirus has shown extreme impact over the business of Airbnb.
Data shows that bookings across Europe collapsed in March, dropping 80% compared to the previous month, and another 10% on top of that in the week of April 16. In the US where the steps against the virus had taken a bit late, shows uneven falls in the booking. By the middle of March, bookings in New York City, San Francisco and Seattle had already dropped more than 50% compared to the previous month, with drops of over 35% in Washington, D.C., and Chicago.
Measures to withstand the crises
The crises have left Airbnb with a few options, to weather the losses it has decided to call off every marketing strategies and put the founder salary on hold for the next 6 months.
The senior executives are going to take a 50% cut in their salaries. It has halted any new recruitment of graduated and summer internships. Airbnb has terminated 1900 contracts of their employs around the world, which 25% of their workforce. They have given blanket cancellation to the travellers who have booked pre-lockdown for stays until May 31.
This action has not gone well among the lenders, it has made them suffer a loss in these challenging periods. Acknowledging their anger, company founder Brian Chesky setup $250 million funds. To compensate hosts for up to 25% of their lost income, with an additional $10 million bailout fund for super-hosts. These measures will help the company to repair its relations with hosts. It is important for the phase when things will revive. Future of Airbnb is still amidst dark clouds.
A goodwill gesture
For now, all those unrented units are being used for a good cause. Hosts connected with Airbnb has offered stays to people in need around the world. It has given stay options in over 100000 units.
It has accommodations for medical staff in Italy, who wants to stay nearby their hospitals and self-isolate themselves from their families at the time of crises. The isolation centre to homeless like in Barcelona.
When everything resumes, it may not be the Airbnb who will get benefited the most. According to experts, people will tend to go toward traditional hotels instead of homestays. This is because there will fear of hygiene standards among the travellers regarding homestays.
It is tough for the hosts to offer deep cleaning to every customer on their arrival. To follow social distancing, customers might not opt to share their hotel spaces with unknown travellers in home-shares. The future for Airbnb is vague at the moment, though they can turn it around.