When COVID hit in March, Airbnb lost $1.5bn in bookings nearly overnight and saw the number of weekly bookings drop from nearly 600,00 in February to around 100,000 by mid-April.
By the summer, business had recovered and bookings returned — on some days — to pre-pandemic levels.
So what happened?
- Airbnb switched focus from international destinations to local getaways, changing its algorithm to show people nearby cottages and beach houses.
- After securing a $2bn loan, they cut costs dramatically, laying off a quarter of their workforce and slashing $1bn from marketing expenses.
- The company refocused on its core functions, putting other projects like experiences and transportation on hold.
The outcome: The company appears to have made it through the worst of the storm (at least so far), future bookings in the US have risen since last year, rental inventory is growing again, and some laid off workers have been re-hired.
Zoom out: The fate of Airbnb is a useful barometer for travel and leisure businesses more broadly. The company's survival and recovery shows that people are once again spending on holiday stays, but in a very different way than they were pre-pandemic. However, with cases on the rise, this sector isn't out of the woods yet.