Against all odds, Airbnb is poised to grow. The COVID-19 pandemic pushed the company to the brink of collapse earlier in 2020. But Airbnb booking levels are now returning to their pre-pandemic levels, accordingly to a recently published report from The Wall Street Journal. And the company is about to go public. Why? Because Airbnb is resilient.
The News
- Airbnb plans to file for an IPO in a matter of weeks, even days, according to Reuters. This would be the biggest IPO of 2020, with a potential valuation of more than $30 billion.
- The Wall Street Journal reports that the pandemic nearly destroyed Airbnb as people put a halt to travel – but by July, guests were booking stays at the rate they were just before the pandemic brought travel and tourism to a halt.
The Resilience of Airbnb
It’s easy to love Airbnb. The company has battled back from the brink, and it is succeeding. Professor Scott Galloway writes, “I believe this time next year #Airbnb will be the most valuable hospitality firm in the world and one of the world’s 10 strongest brands.” Here’s why Airbnb is lovable:
- A focus on experience. Airbnb is more than a place to book lodging. During the pandemic, Airbnb has incorporated digital experiences into its product. Right now, on Airbnb’s website, you can go on a leopard safari in Sri Lanka, discover Buenos Aires street art, and make Mexican street tacos with a pro chef. These field trips have added a new dimension to the company: lovability online. Airbnb field trips are providing additional revenue for small business owners being rocked by the pandemic. Many of Airbnb’s field trips offer some relief to families at home looking for safe, fun things to do together at home, as this science field trip demonstrates. How much these experiences add to Airbnb’s bottom line is not known; but they build brand love and make the company more responsive to the rise of digital-first living during the pandemic.
- The confidence to pivot. It’s easy to throw around the word “pivot” to describe companies that are succeeding simply because consumer behaviors changed in their favor. And when businesses truly pivot – as in a change of strategy without a change of vision – it’s not always easy to know what to do at the time. It takes confidence to pivot. Airbnb truly pivoted. Before the pandemic, Airbnb thrived from travelers booking visits in big cities around the world and across the country. As travel ground to a halt, Airbnb’s revenue stream dried up. But Chesky and his team of data scientists noticed that people were looking for places to book in smaller, less populated cities more accessible to their homes by car. In short, people were still traveling, but by car and to places deemed to be safer because they were less populated than big cities. People also wanted to book entire homes to quarantine together when they traveled. So by June, “the company had redesigned its website and app so its algorithm would show prospective travelers everything from cabins to lavish beach houses near where they lived,” according to the Wall Street Journal. By the way, did you know that Airbnb has a greater share of employees with an engineering background than Amazon or Uber? Smart hires make for smart decisions.
- Mindful Leadership. CEO Brian Chesky has made some excruciatingly difficult decisions in 2020, including laying off 1,900 employees. In doing so, he has acted with compassion and clarity. His email to staff explaining the layoffs earned praise for its transparency and sensitivity. His actions have matched his words. Per the Wall Street Journal, laid-off employees were allowed to keep company-issued laptops, they received a year of health insurance, and they were given access to an online talent directory so that they’d be more visible to recruiters. “Half a dozen former and current employees said in interviews they felt newfound respect for Mr. Chesky because of the way he handled the layoffs,” said the Wall Street Journal.
What Businesses Should Do
- Treat your product like an experience. As we wrote earlier this year, the evolution of product is experience-driven growth. Experiences evoke powerful emotions and create memories. Experience are an essential ingredient of building loyalty.
- Embrace the pivot. It’s not magic. In fact, tools such as design sprints can help you test and learn new human-centered business models quickly and cost-effectively. (We incorporate design sprints in our FUEL approach.)
- Be mindful. We recently discussed mindful leadership on our blog. We believe that mindfulness is the foundation for empathy. And empathy is a key component of a culture that people want to be a part of. This is especially true now as employees and customers look to businesses to make a positive difference during uncertain times.
Contact us to learn how to pivot quickly and successfully.
For More Insight
- The Evolution of Product Is Experience-Driven Growth,” Mike Edmonds, July 28, 2020.
- “Redefining Mindful Leadership in 2020,” Mike Edmonds, July 9, 2020.
