fbpx
vacation rental conference

Airbnb’s Brian Chesky on almost losing everything, and now running a leaner and More Agile Company

airbnb brian chesky
Share on facebook
Share on twitter
Share on linkedin
Share on whatsapp
Share on email

The tone of the press about Airbnb.com is changing. The company is now treated as the comeback kid that has matured. Over interviews, the company positions itself as agile and resilient, with good numbers, lower costs, and a relevant offering of homes. Airbnb may be stealing a bit of Vrbo’s thunder here in terms of who is better positioned, but their PR machine is still moving along nicely.

Deirdre Bosa:

The travel industry was decimated by the COVID-19 pandemic. But as you’ve heard, Airbnb is starting to see green shoots of improvement. So I asked Brian Chesky if he’s seeing a sustained rebound in his business in the United States, and if that’s in jeopardy, given a rise in COVID infections in certain states.

Brian Chesky:

2022 vacation rental conference

It’s hard to know. I mean, I think one thing I’ve learned is not to try to get in the business of predicting the future. Anyone who has, has not done very well in the last few months. But what I can tell you is the following.

Beginning with March, travel was in a standstill, almost virtually stopped. Two and a half billion people locked down. And not surprisingly, we spent 12 years building Airbnb’s business and lost almost all of it in a matter of four to six weeks.

What’s happened over the last three, four months, though, is something else entirely. People are saying they want to get out of the house, but they want to be safe. They don’t want to get on airplanes, they don’t want to travel for business, they don’t want to go to cities, they don’t want to cross borders. What they are willing to do is get in a car, drive a couple 100 miles to a small community, where they are willing to stay in a house.

And because of that, though our business has not recovered, I want to be very clear, something remarkable happened, which was the end of May, early June, we have the same volume of bookings in United States as a year before, without any marketing. Zero marketing whatsoever. I think this is just showing that people are yearning for something. They’re yearning for connection, and they want to be connected to each other, to the communities. They want to get outside. And so I think that travel is going to come back. It’s just going to take a lot longer than we would’ve thought, and it’s going to be different.

Deirdre Bosa:

Is Airbnb be prepared if we do see, perhaps not lockdowns, but potentially lockdowns or more businesses close, more communities shutting down to outside?

Brian Chesky:

We have dramatically reduced our costs. We reduced our costs and it was an incredibly difficult harrowing experience because we said, “We don’t know how long the storm will take.” And so I’m going to hope for the best, but I’m planning for the worst. So if there is a shutdown or multiple shutdowns, if communities get shut down, if travel stops, we’ll be okay because of the changes we’ve made. We’ve cut nearly a billion dollars of marketing. We’ve had to reduce our staff. We’ve been very, very lean and nimble.

And we’ve also been resilient. We’ve launched online experiences. People can do it from home. We have longer-term stays. A large percent of our bookings, almost a fifth of our booking or nights, are for stays longer than 30 days. And the other thing is, we have not lost any host on our platform. Or I should say it differently. We have more hosts today and more homes today than before COVID started.

So the important thing here is that the market is resilient, the community is resilient. And I think that one trend that is going to happen is the following. Travel, as we knew it, is over. It doesn’t mean travels over, just the travel we knew is over, and it’s never coming back. It’s just not. No one quite knows what it will look like, but I have a couple of thoughts. I do think that instead of the world population traveling to only a few cities and staying in big tourist districts, I think you’re going to see a redistribution of where people travel. They’re going to start traveling because they’re going nearby to thousands of local communities.

Deirdre Bosa:

Are you looking at potentially cutting Airbnb’s corporate footprint?

Brian Chesky:

We’re definitely going to not have… We had fairly ambitious real estate expansion plans and we have paused those plans. So we’re not adding a lot more new real estate. I think, more people are going to work remotely. And work from home also could be work from any home, and that’s an opportunity for Airbnb, because you’re going to see major population redistribution on the table. Not everyone’s going to want to live in the same city. That being said, we don’t know the full cost of entire workforces being remote.

Deirdre Bosa:

Is there more room to cut costs at Airbnb?

Brian Chesky:

We’re certainly done with the layoffs. We told our team, there will be one layoff, we’re not going to want to do this twice. So when you do cut, you must cut deep enough. And we made sure we cut deep enough so we didn’t have to do this twice, and that we’d have enough money to be able to take care of people, do everything we can for those departing. We cut nearly a billion dollars of marketing spend run rate. We’re not doing any marketing right now. We’re not spending any on advertising.

And actually, what it turns out is our business is probably a little more efficient and profitable than we realized, because of all the demand we’re getting. There’s still opportunities on AWS and customer service to get more efficient in how we use data, how we handle context. So we’ll continue to make the business more efficient. The business is definitely pretty lean at this moment.

Deirdre Bosa:

How are you thinking of an IPO these days? It was on track for this year.

Brian Chesky:

Was on track, then the crisis happened. We kind of focused our efforts on other things. And at this point, we’re not ruling out going public this year, but we’re not committing. We want the world to be ready for Airbnb. And that means that travel needs to see a little bit more of a sustained recovery. The market needs to recover a bit, and we just need to kind of weigh our options. So we don’t have any news to say, but we’re not ruling anything out.

Deirdre Bosa:

Are you encouraged, though? We’ve seen a number of IPOs go out pretty successfully so far.

Brian Chesky:

You think you’re on top of the world. Something difficult might be around the corner. And so maybe we just have to start living in a little bit more of a measured world and not get too high, not get too low. I hope these last four months have been a lesson. So, I’m trying to take that advice and say, “Things are never quite as good as they seem or as bad as they seem.” And so we’re going to kind of play it by ear and be pretty careful, pretty thoughtful.

Share:

Share on facebook
Facebook
Share on twitter
Twitter
Share on pinterest
Pinterest
Share on linkedin
LinkedIn
Rental Scale-Up

Thibault is the founder of Rental Scale-Up. He owns vacation rentals in St. Barths and Bali. He also leads innovative projects for companies within the vacation rental industry. Feel free to reach out to Thibaut Masson on Linkedin.

Winter Resort Website Medium Rectangle Ad

Table of Contents

Dear Short-Term Rental Industry Member, Join Our Scalers Network

Our Mission

We bring together short-term rental industry members to create valuable business and personal relationships. With the support of vetted peers, you can deliver on your next individual project goals faster, work in private groups to share doubts and successes, and become a new voice that shapes the conversation about our industry.

Whether you are a property manager, an owner, an industry vendor, a listing site operator, an investor, or a consultant, you can become a member of our Rental Scale-Up family.  As property managers and industry vendors may not have the same needs, some of our activities work by affinity groups. For instance, we have one version of the mastermind group sessions reserved for property managers and owners, and another one for vendors and listing sites. This way, you get feedback from peers who understand your pains and can get you faster to getting results.

1. Action, Transformation & Results

  • Mastermind Group for Property Managers & Owners: A mastermind group is a group of peers who meet to give each other advice and support. Facilitated by Rental Scale-Up. One session every 2 weeks with your group for a least 3 months.
  • Ask a Property Manager: Hosts, owners and property managers benefit from the experience of a successful property manager. (1 per month)
  • Groupwork: Report of the month co-creationA group of Scalers volunteer to write a report on the topic of the month. The result is published on RentalScaleUp.com, with full credits to each participants. (1 per month)
  • Mastermind Group for Industry Vendors & Listing Site Operators: A mastermind group is a group of peers who meet to give each other advice and support. Facilitated by Rental Scale-Up. One session every 2 weeks with your group for a least 3 months.
  • Ask an Expert Anything (for vendors and listing sites): An outside expert (e.g. a copywriter) shares their experience on a topic in an Ask Me Anything (1 per month)

2. News & Live Discussions

  • Investment & Deals  Discussion: Thibault and an M&A specialist/VC go over recent deals, M&A, investment rounds. Live, monthly.
  • Curated news: Save time. We read the news for you, curate the articles, and add our exclusive comments (weekly, in the Network Newsletter)
  • US Trends & Data Discussion: We analyze AirDNA’s latest report on US trends and zoom in on key markets (e.g. urban vs vacation rental markets).  Network members share what they see in the markets. Live, monthly.
  • Monthly Live online conference: Every month, our Network deep dives into a topic that is crucial to the short-term rental industry. 3 experts share their insights, best practices and answer your questions live.
  • European Trends & Data Discussion: We analyze AirDNA’s latest report on European trends and zoom in on key markets (e.g. UK, France, Italy, Spain).  Network members share what they see in the markets. Live, monthly.
  • Weekly Teardown with Thibault: Rental Scale-Up founder tears down one business news, every week, live.  Networker members share their views. No filter.

3. Facilitated Networking

  • Networking Booster: Meet new business partners and improve your networking game at an online event. Our team facilitates the event to make it easy for you to connect with your peers. (monthly)
  • Business Profile: Each new Scaler gets their profile featured in a dedicated article on RentalScaleUp.com. Get more visibility and authority.
  • In-Person Meetups: We meet in real life, either during a large vacation rental conference or in a city of our choice (quarterly)
  • Job Offers: Network members can not only see job offers but also post theirs. If desired, job offers can be extended to all Rental Scale-Up readers (free and paid).

4. Deals on industry software and products

  • Get Discounts: Enjoy exclusive deals brought to you by fellow Network members. Only in our Deals section. Monthly.
  • Offer Deals and Discounts: Network members may offer exclusive deals to fellow members, from discounts on stays at their properties to lifetime deals on vacation rental software. Only in our Deals section. Monthly.

Ready to join right now?

Scalers comes in 3 levels:

  • Scalers Insights, the limited, content-only version of the network. Great those who just want to get the insights but have less time for business transformation.
  • Scalers Network: Transform your business and get results. Get more things done. You get support, accountability, networking, training, and investment opportunities
  • Scalers Network+ : Avoid the hassle of quarterly payments and pick an annual membership. Qualify for bonuses good for your business (e.g. lead generation)

Not quite ready? Sign up for our free newsletter

Weekly insights straight into your email inbox.

On Key

Related Posts

Actionable insights

Take the Right Decisions for Your Rental Business thanks to our Weekly Industry Brief.

Exclusive newsletter for rental entrepreneurs.