The travel industry has taken a massive hit following the outbreak of the COVID-19 pandemic. With countries closing borders and cities going into lockdowns, airlines, hotels, and vacation rentals shuttered. One such vacation rental company is Airbnb, which has reportedly faced a massive revenue drop this year. The once-meteoric rise of the company, founded in 2008, has been brought to a standstill due to the pandemic.
In this article, we explore the reports of the revenue fall of Airbnb and what it means for the future of the company.
The Impact of COVID-19 on Airbnb
One of the most obvious reasons for Airbnb’s revenue decline is the COVID-19 pandemic. The pandemic has hit Airbnb hard since guests are canceling bookings, and new reservations are on hold. According to reports, Airbnb’s revenue in 2020 has experienced significant revenue drops, with June 2020 being the worst as revenue fell 67% compared to June 2019.
However, it is essential to note here that to cope with the situation, Airbnb laid off 25% of its employees in May 2020. But in 2023, things are not getting normal.
Airbnb Facing Tough Competition
The vacation rental industry has become a highly competitive space, and Airbnb has not been spared. Players like Booking.com, Expedia Group, and Vrbo, amongst others, are using their brands and presence in the market to gain market share.
A recent report from SimilarWeb shows that Vrbo has been taking customers from Airbnb since the pandemic. The report also shows that Vrbo’s website visits from the United States increased by 58% from March through June 2020, whereas Airbnb’s website visits decreased by 11%.
Airbnb Focuses on Domestic Travel
Due to COVID-19 concerns, travelers are looking for safer options closer to their homes. And that is where Airbnb’s focus lies now. According to reports, the company is targeting domestic travel and also offering longer stays to cater to those looking to relocate.
The company says it is seeing less decline in bookings for longer stays and stays closer to home. Airbnb is also investing in online experiences. Thus, hoping to offer a unique experience to customers that can replace in-person experiences.
What Does the Future Look Like for Airbnb?
The future of travel remains uncertain, and with Airbnb’s significant loss of revenue, the company may have to reconsider its plans. However, the company’s focus on domestic travel and long-term rentals may come in handy as travel restrictions from the pandemic continue.
Similarly, it is also possible that the company may focus more on alternate bookings like corporate stays instead of just vacation rentals.
The pandemic has changed the way people travel. In 2023, as things get back to normal, there are still reasons to remain optimistic about Airbnb’s future as the company focuses on domestic travel and long-term rentals.
Airbnb also needs to be watchful of its competition and maintain its brand image. The pandemic might be too big a hit for Airbnb. But as we adapt to the new normal, only time will tell. For now, the travel industry waits and hopes for a path to recovery.