Airbnb at IPO part V: How has Airbnb reacted to the COVID-19 crisis?

The Coronavirus pandemic has hit the world hard, with travel one of the most affected industries. Airbnb and its competitors have all been faced with an exceptionally tough climate but have their performances suffered equally?

Coronavirus crisis demand on Airbnb, & Expedia

All platforms began the year with more booked nights than the same 2019 period, with Airbnb was least positive. As the decline in booking demand hit, Airbnb went from least positive in reserved nights to least negative. Least negative it may be but at the end of October, Airbnb took 67% fewer reservations in 2020.

The numbers are not good, but they show something positive for Airbnb, who have maintained their dominance in booked trips throughout 2020 also.

Recovery demand on Airbnb, & Expedia

It has retained crisis demand better than its competition but how is Airbnb positioned amongst its competitors for new demand? As manifold circumstances impact travel decisions, the shape of demand available to the short term rental industry is shifting.

The first demand opportunity emerging for the travel industry is domestic travel. With international travel restricted, domestic guests currently account for 98% of vacation rental stays in the US. An important corner of the market just became more important than ever.

Airbnb retains the second highest share of domestic trips amongst its competition, which stands it in good stead, but it has seen one of the lowest % increases in domestic trips year on year.

The news is less positive where a second trend is concerned. As guest flock towards more isolated, rural locations, occupancy is swinging away from urban supply. Airbnb has the highest urban proportion of stock.

However, Airbnb’s likely saving grace during the crisis has been its focus on longer stays. While people look to stay longer in all alternative accommodations this side of the outbreak (~20% higher than the same time last year), Airbnb stays are a third longer. Its push for mid-term stays has seen Airbnb reach the highest average number of days stayed by a significant margin, which of course means more revenue.

Through the depths of the impact and now in the midst of a quasi-recovery, Airbnb has demonstrated its ability to survive the harshest test. Moreover it has survived better than its competition, which can only be reassuring ahead of its IPO. Airbnb might not have been set up to benefit from these imposed demand shifts, but Airbnb must continue to adapt to survive in this new crisis-driven climate.