Travel industry is one of industries that got the hardest hit during the covid era. Many travel companies reported huge drops in their revenue. Some companies also have to permanently stop their operations. Airbnb is one of the companies in the travel industry that got a big punch in their face because of covid.
They were in rapid growth in early 2020. Then they have to accept the fact that they lost 80% of their revenue started in April 2020. Aribnb got much media attention after releasing the information that they had to lay off quarter of their employees.
Brian Chesky; the Airbnb CEO, said that it was a very tough experience during his professional career. All of the topics in media about Airbnb regarding how they can survive during their hard times.
Airbnb actually had done a great job through the crisis. They not only can survive, but they can also be stronger and more successful. Airbnb was a private company with USD 30 billion valuation before covid. Today Airbnb has already become a public company with more than USD 100 billion valuation.
We have to learn from the way Brian Chesky and his team faced the difficult situation. They had very strong leadership with bold and fast moves. Airbnb also shows us how to keep their value so that we still could still earn trust from our stakeholders even in the hardest time.
Brian Chesky said that he decided to make a lot of hard decisions like company downsizing and it was very painful. Instead in a crisis a leader has to have confidence. It is very easy to be paralyze and to find it is difficult to make decisions in a hard time. However, it could be a contagious psychology to the entire organization when the leader is the one who gets paralyze. We have to keep being strong and stay confident.
After laying off thousands of his employees, Brian always held weekly hands-on meetings and answered all of the questions by himself. He also set meetings with his executives everyday. Those were very intense days to the entire team in realigning their business.
Airbnb’s strong value also becomes one of the most important factors in Airbnb to protect their ship. The darkest moment is the best moment to show whether you can keep your value or not. Airbnb chose to do the expectation of their company value.
The time they laid off their people, Airbnb showed how strong they value their people. Former employees got generous severance, extra 1 year health insurance and everyone can keep their Apple computer from the company along their side. Airbnb also set up a team to help all their former employees to land in their new job. They built a platform consisting of the data of Airbnb alumni to make it easier for the external recruiter in finding them. That culture becomes the energy to keep their existing people confident that Airbnb still protects their value even in the hard times.
The strategy that Airbnb used during covid was utilizing domestic travel. International travel dropped significantly in covid, but nearby travel became a trend. Airbnb refocused their core business to their original service, connecting to local hosts with the travelers. Refocusing their business to the nearby travel with their cost efficiency produced a healthy financial condition. They started to get profitable in Q3 2020.
Airbnb with its IPO success was also a surprise to the market. From the bottom of expectation as a near death experience, Airbnb showed that the market is still optimistic with the travel industry. They sold the story that they were preparing an inflection point after covid that the travel will grow faster than ever.
There is always an opportunity behind a crisis. We saw a dark period of the travel industry in the covid era but the great organization could always realign their ship towards the opportunity.