Airbnb has become the latest business to turn off the taps at its marketing division as the impact from the ongoing coronavirus crisis continues to wreak havoc on its operations.
In light of the global situation, chastened Airbnb will suspend all marketing activities in a move which will save $800 million a year. Meanwhile, company founders will forego salary for the next six months and top executives are to voluntarily accept a 50% pay cut as the business reels from an overnight collapse of the travel and tourism sector.
Reports from Reuters suggest that the home rental juggernaut is also closing its doors to new recruits save for a handful of mission-critical roles as it seeks to shore up its balance sheet for what is looking increasingly like a prolonged downturn.
Faced with a backlash over its unilateral decision to refund guest reservations and leave hosts empty-handed while competitors took a more balanced approach, Airbnb co-founder and CEO Brian Chesky apologized to hosts, and detailed a $260 million Airbnb relief package.
Airbnb will pay hosts $250 million to partially cover the cost of coronavirus cancellations. For canceled check-ins that were slated for March 14 to May 31, Airbnb will pay hosts one-fourth of what they would have received through their cancellation policies, and the “payments will begin to be issued in April.”
Airbnb set up a $10 million Superhost Relief Fund with rental and experiences hosts eligible to apply for grants up to $5,000. This is to help superhosts with rent and mortgage payments. As with the $250 million host payments, these grants do not have to be paid pack. Airbnb employees donated $1 million to the superhost fund, and Airbnb co-founders Chesky, Joe Gebbia, and Nathan Blecharczyk “are personally contributing the remaining $9 million, Chesky said.
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