Travel and coronavirus: What Airbnb needs to do in order to survive the pandemic

 Airbnb has been a game changer for travellers. Since the world's number one online homeshare broker launched in 2008, it's enabled us to travel longer and more cheaply to just about anywhere in the world.

Why pay $400 per night for a hotel room in central London or $250 in Melbourne when you can have self-contained accommodation for half that amount? It isn't only holiday travellers who reap the benefits. For anyone who travels for work, a festival, a meet-up with friends or a family catch-up, Airbnb has been a godsend. In inner-city Sydney and Melbourne it enables grandparents to make extended-stay visits to their offspring, who often don't have enough room to accommodate them comfortably in their own house or apartment. Airbnb now has more than 7 million listings in over 220 countries. That's more rooms than Accor, Hilton, InterContinental and Marriott put together.

And then, along came coronavirus

COVID-19 has sent shockwaves through the accommodation industry, and Airbnb has not been spared. Airbnb has lost around 16 per cent of its pre-coronavirus value of $US31 billion. The San Francisco-based company recently laid off 1900 of its 7500 employees.

According to AirDNA, an independent data source for homestay metrics, new homeshare bookings in Australia have dropped from 78,000 in the period from February 3-9 to less than half that for the period May 11-17. AirDNA data also records a fall in the number of active homeshare properties in Australia – from 202,000 in early February to 163,000 in mid-May. That AirDNA data bundles Airbnb together with Vrbo, a leading US vacation rentals site, however Vrbo is a relatively minor player in Australia compared with Airbnb. In Sydney, Vrbo claims 3,500 rentals while Airbnb currently has 36,662 properties according to Inside Airbnb, an independent source which harvests its data from Airbnb's own listings.

Has the game changer had its game changed by coronavirus? The great travel disruptor disrupted?

Where to now for Airbnb?

According to Susan Wheeldon, Airbnb's Country Manager for Australia, "While the COVID-19 crisis has significantly disrupted the tourism industry and wider economy, we know that travel is resilient in the long-term and will ultimately recover. We're definitely seeing a strong resurgence in people planning trips for later in the year - and into next year - and actively searching for ideal getaway spots for when they're able to take that first trip. These searches are very encouraging early signs of domestic travel getting ready to bounce back and make a big contribution to economic recovery."

That's backed up by an AirDNA spokesperson, who says "When looking at new bookings for Airbnb, made for any future date, Australia has seen a growth rate of 68 per cent between the week starting 4 May, 2020 and the week starting 11 May, 2020."

In the active-coronavirus world, an Airbnb has some advantages over a hotel that should assist its bounceback, particularly when it's a self-contained space rather than a host-shared homestay. Even with the strict deep-cleaning and social distancing protocols that many hotels are implementing, a big hotel puts you in contact with many more strangers who might have come from anywhere in the world. In a self-contained Airbnb it's just you and your friends or family. Provided you're satisfied the host has thoroughly cleaned the premises, the perception of risk is lower.

Airbnb management has been active in this space, promising an "Airbnb Enhanced Cleaning Initiative" to be rolled out in the near future. Formulated in consultation with former US Surgeon General Dr. Vivek Murthy and incorporating recommendations from the Centers for Disease Control and Prevention (CDC), this initiative includes step-by-step cleaning guidelines tailored on a country-by-country basis to cover recommended supplies and sanitisation techniques. Hosts who sign up for the new initiative and take a quiz to prove they've understood what's involved will be identified on their listing page.


As well as prioritising cleanliness as an emerging concern for guests, in a May 13 broadcast, Airbnb co-founder and CEO Brian Chesky outlined the trends for the homeshare industry.

"Near is the new far" according to Chesky. Local travel is going to take precedence over overseas. "Guests are going to be booking trips that are less than 80 kilometres from home. Since the pandemic, the number of travellers booking stays within that 80-kilometre radius of their home has more than doubled."

Since the coronavirus has been a major economic shock, guests are looking for more affordable options. In the US, says Chesky, those states where the average Airbnb is $SUS50 per night and under are experiencing the fastest growth. These states now account for one-third of bookings across the US.

Another trend is the tendency to make last-minute bookings, those booked a week or less before check-in. Two-thirds of Airbnb bookings in the US are now last-minute bookings, a figure which has doubled since March 2000.

A return to Airbnb's grassroots

Chesky also promised to refocus on "Travel like a human", Airbnb's original slogan from way back in 2008. That's something that has been sidetracked as the Airbnb experience has largely transitioned from a true homeshare experience to something less personal. When entrepreneurs saw that they could lease properties off the real estate market and offer them on Airbnb for a far greater return than those properties would attract as long-term rentals, they piled in. Where your Airbnb host might once have been a local resident with a room to let out or a studio at the back of their house that the kids no longer use, it's increasingly become a faceless interaction.

In that process the "Travel like a human" ethos went missing. You might stay in self-contained accommodation with plenty of amenities but Airbnbs are now frequently stuffed with extra beds, which never show up in the photos. Entry to the property might be keyless or via an agent, the furniture is bland and soulless and warm interaction between guest and host gone AWOL.

A lockbox outside an Airbnb property in Montreal.

A lockbox outside an Airbnb property in Montreal. Photo: Getty Images

That business model has been substantially eroded by coronavirus. Many of those operators with multiple properties have now found themselves shorn of their income by the stay-home orders, and digging into their bank accounts to cover their leases.

Some of those corporate hosts were further knocked for six when Airbnb intervened on the side of guests and re-jigged its refund policy. Guests who made reservations before March 14, 2020 with a check-in date between then and the end of June would be allowed to cancel with a full cash refund or travel credit for the amount paid. That overrode Airbnb's existing policy, under which hosts decide their own cancellation fees and the time frame when they apply. Many hosts were deprived of substantial deposits which they would otherwise have pocketed, which amounted to larceny according to guests since government restrictions made it impossible for them to travel during this period. To lessen the blow, at the end of March Airbnb set aside a $US250 million fund to support hosts impacted by cancellations, but that amount will compensate only a fraction of those hosts.

Coronavirus has been a shake-out for the travel industry. If a better, kinder Airbnb emerges at the end of it, that's worth cheering.

See also: Family find a hidden camera in their Airbnb

See also: Thanks to COVID-19, the great Aussie motel is set for a comeback