How Airbnb has resisted the COVID-19 Crisis and adapted to shifting demand?
The Coronavirus pandemic has hit the world hard, with travel one of the most affected industries. As such, Airbnb and its competitors have all been faced with an exceptionally tough climate, but have their performances suffered equally?
Through the depth of the impact and now in the midst of recovery, Airbnb has demonstrated its ability to survive the harshest test, but also to survive better than its competition, which can only be reassuring ahead of its IPO. How will it continue to fair in this new climate?
As the decline in booking demand hit, Airbnb retained its booked nights best, going from bottom of the pile year on year, to top. The numbers are not good, but they show something poistive for Airbnb, who have maintained their dominance in booked trips throughout 2020 also.
But how is Airbnb positioned amongst its competitors for the new emerging demand? The first demand opportunity for the travel industry is domestic travel. With travel largely restricted, domestic guests currently account for 98% of vacation rental stays in the US, so it is a more important market 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.
Airbnb also has the highest proportion of urban stock, which is a disadvantage in the current demand swing towards rural locations. However, Airbnb's likely saving grace during this crisis has been its focus on longer stays. COVID-19 has been rocket fuel for the trend of using short term rental inventory for long term stays. The average length of stay for an Airbnb booking has increased by 50% since April 2020, and other short term rental platforms have shown increases to lesser degrees. This push has seen it reach the highest average number of days stayed by a significant margin, which of course means more revenue. Driven by greater professional flexibility and the promise of living like a local anywhere in the world, long term stays are poised to drive growth into the future.
Airbnb might not have been set up to benefit from these imposed demand shifts, but it must continue to adapt to survive in this new crisis-driven climate.
