On May 5, Airbnb CEO Brian Chesky addressed his employees in a heartfelt letter, notifying them of impending layoffs impacting around 25% of staff, while forecasting revenue to be less than half of its 2019 total.
In his letter, Chesky outlined hard truths about the future of global travel: “We don’t know exactly when travel will return. When travel does return, it will look different.”
As China’s economy opens ahead of other nations, the nation’s homestay market has begun to recover from significant upheaval. Platforms are rapidly deploying new strategies in attempts to ease the crisis caused by the COVID-19 pandemic.
A host in Chengdu who operates 30 units said the pandemic cost him RMB 400,000 (USD 57,106) in losses, while he also lamented the evaporation of foreign tourists, who usually make up 40% of his income.
Despite being rocked by the COVID-19 crisis, Airbnb is said to be still mulling an IPO in 2020. Recently, the company installed Siew Kum Hong as Airbnb China’s chief operating officer (COO), creating a new role. Siew, hailing from Singapore, previously served as Airbnb’s APAC general counsel since 2012 and subsequently became a director at Airbnb for the APAC region.
Airbnb co-founder and chief strategy officer as well as chairman of Airbnb China, Nathan Blecharczyk, commented on the move, “China is critical to achieving our mission—to help create a world where anyone can belong anywhere and I’m incredibly excited that Siew Kum Hong will be a part of this important work.” Airbnb China’s CEO Peng Tao hailed Hong as “a natural gateway between China and Airbnb’s global network.”
The company has been aggressively offering coupons to both guests and hosts, to re-engage its users and try to rebuild consumer confidence in the travel industry.
In addition to a receiving a USD 100 coupon, one Airbnb host in Beijing told KrASIA that the platform is waiving its four criteria to qualify as a superhost for certain users with a strong history on the platform, in turn boosting the number of superhosts and again bolstering travelers’ confidence in Airbnb products, be it stays or experiences.
A survey of Chinese travelers by market research firm Kantar found that 81% of respondents were likely to consider a trip close to home, within driving distance, as people prefer personal vehicles rather than commercial flights. Airbnb’s data showed that an increasing proportion of bookings were within 200km from travelers’ homes, leading Tao to neatly categorize the shift in behavior and say, “Travel is for difference, not distance.” The demand for a change of scenery can also partly be attributed to the monotony of prolonged remote working.
However, like most offline businesses hamstrung by the pandemic, Airbnb has pivoted to develop new, web-based offerings. The company launched Airbnb Online Experiences in the wake of the health crisis, and 84% of respondents to a Kantar survey said they would be interested in trying such a service. These online experiences are live, interactive video sessions limited to small groups, where guests can interact with expert hosts. The program includes activities like up-close access to a sheep farm in Scotland, a baking tutorial, a walking tour of Prague or a live show from a magician.
The company has also signed agreements with local government tourism bureaus from Zhejiang province and Guilin city to try and recoup some lost business. Guilin is particularly reliant on tourism and has previously been hailed by the government as an example of poverty alleviation through tourism.
While these measures may stem some of the pain felt by the entire industry, Airbnb will have to be patient before it can resume its typical pace of expansion in China.
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