Airbnb’s new paintjob is permanent, not a pivot.

Image Credit: Samaneh Sadeghi Marasht

With Airbnb announcing major overhauls mid-pandemic, Andrea Andres asks whether they are here to stay or are a short-term ploy.

With Covid-19 abound, travel has been restricted and many companies, from hotel chains to airlines, have been affected. Airbnb, experiencing $1.5 billion worth of cancellations, has been especially hit by these restrictions.The company has had to downsize and let go of 25% of their employees (1,900 out of 7,500) and borrow $2 billion dollars in order to stay afloat. In the face of these recent events, Airbnb has had to reconsider its position. Co-founder Brian Chesky said, in an email to employees, that the pandemic “has sharpened [their] focus to get back to [their] roots, back to the basics, back to what is truly special about Airbnb — everyday people who host their homes and offer experiences.” To go “back to their roots”, the company has taken several steps towards change. But is this ‘all talk’ or a meaningful step forward towards reforming the company for its customers, its hosts and the countries it operates in? 

Airbnb has faced a lot of criticism due its effects on local residents and the property markets in major cities. Airbnb has been dominated by agencies with many listings. According to InsideAirbnb, a website that allows people to explore “how Airbnb is really being used in cities around the world” and “see how Airbnb is being used to compete with the residential housing market”, 49.7% of hosts in Ireland have multiple listings under their name. 

This colonisation of properties - that could have been rented to locals for short-term profits -  has caused rents to rise and contributed to housing becoming unaffordable and unattainable for many. This isn’t limited to Dublin. Other cities like Prague and London have also experienced uncontrolled growth of Airbnb sublets. Airbnb has also contributed to over-tourism and put pressure on infrastructure and finance of cities. As a result, several European cities including Paris, Berlin, Vienna and many others have taken a stand against Airbnb, calling on the European Union to introduce new regulations against short-term letting. Others, like Amsterdam and Palma, have taken matters into their own hands - by either banning Airbnb outright or curtailing the number of nights a home can be rented annually. 

In an interview with The Times, Chesky outlined how he felt that the company had lost their way: “We really need to think through our impact on cities and communities. We need to go back to basics — to what really made us successful in the first place. I’m not meant to do real estate. I’m not even meant in a larger sense to do travel. We’re about connecting people . . . we weren’t as focused as we should have been. We lost sight of our values and took for granted what made us special.” 

But what steps has Airbnb taken to get “back to the basics”? For a start, according to the email that Chesky sent to Airbnb employees, they have ceased their work in its Transportation Division and Airbnb Studios and shrunk their “investments in Hotels and Lux”. The company has hired Catherine Powell, former President of Disney Parks Western Region, as Global Head of Hosting, who will aim to get Airbnb working with its hosts more closely and transparently. According to The Times article, Airbnb intends to “to accelerate efforts to tackle the effect Airbnb can have on local property markets.” 

“We have to partner with cities and be honest about the impact we’re having. If there’s something that they don’t think is working for them, we need to put our hands up and say, ‘We’re sorry, we’ll do better.’ I want to make sure we find a balance between what works for the city, for people who depend on Airbnb for income, and for customers” says Chesky. Airbnb has already taken a step towards being open about their impact. Alongside, Tripadvisor and Expedia, Airbnb has agreed to share crucial, anonymous data such as quarterly booking and location trends with Eurostat, the European Statistical Office. Allowing cities to have access to data on “the nature of the activity of Airbnb in their communities” will help them regulate their own operations. The company has also withdrawn its lawsuit against New York City, and has reached a settlement agreement with the city regarding a law about sharing similar key quarterly listings data. 

As for landlords running amok with multiple sub-lettings, Chesky wants to conduct a “really serious audit” of who does belong and doesn’t belong on the platform. He says that Airbnb stands “for accommodation and services that are unique. Whether they are offered by a business or sole proprietor, they have to feel authentic.” But there is no room for operators that mass-produce a service that doesn’t fit into Airbnb’s brand unless they offer an “authentic experience”, which in this case, will be “branded a little differently.” Airbnb has also signed agreements and intends to sign more with city councils, regarding minimal rental terms that are in line with local laws and implement annual limits on nightly rentals of a property.

Chesky also highlighted that they are working with destination marketing organizations of rural areas, smaller towns, and cities and creating partnerships with them. For example, Airbnb is already in partnership with the National Park Service in the US to help promote their locations. 

Whether or not Airbnb will survive after the pandemic remains unclear. But according to the Wall Street Journal, recent trends have suggested that Airbnb is recovering quickly. Airbnb’s bookings have either surpassed or bounced back to pre-Covid levels, but perhaps only for certain places. Spending on Airbnb is also steadily higher compared to hotel chains like Marriot and the Hilton. 

Airbnb has pledged to make positive changes and has made some progress towards going back to where they started. But only time will tell whether these are permanent changes or temporary ones.