Key Highlights

  • Airbnb to cut 1,900 employees, approximately 25% of its workforce
  • This is one of largest layoffs to hit Silicon Valley as result of COVID pandemic
  • COVID blow to travel industry means Airbnb’s 2020 revenue forecast to be less than half of what it generated in 2019

Airbnb initially set up a $250M host relief fund to assist the company’s 650,000 US hosts who have watched their income plunge due to the COVID pandemic. Clearly, that host relief fund was not enough to carry the company and its hosts through this stunning nightmare so Airbnb CEO and co-founder Brian Chesky informed his employees via email that the company was laying off some 1,900 of its 7,500 workers.

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Chesky said that this global pandemic is the “most harrowing crisis of our lifetime. You go from living year to year to month to month to week to week to day to day. You go from having multi-year plans to figuring out how you’re going to get to next Thursday because you can’t even predict what the world is going to look like in two months.”

Airbnb is certainly not the only startup to layoff workers due to the COVID pandemic. Hundreds of startups have already laid off more than 30,000 workers since the outbreak took hold while, according to experts, the full extent of the COVID toll on the technology sector is still unknown.

And Airbnb is certainly not the only travel and hospitality service to feel the brunt of the pandemic. According to the hospitality industry tracker STR, 74% of hotel rooms in America are empty.

Chesky believes that Americans will resume traveling though when and how are unknown at this point. “Traveling is not a trend that we rode. We didn’t invent it,” said Chesky nor did the people who became Airbnb hosts invent investing in and renovating real estate properties to accommodate guests in their homes for hospitality services.

What happens to the hospitality segment of the real estate industry in the near and long term futures is anyone’s guess at this point. Chesky told National Public Radio that he expects people to begin traveling, when they do, closer to home before exploring “far-flung” destinations.   To maximize those closer to home trips, he expects Airbnb hosts to focus on the company’s “experience” services that link guests with such things as cooking classes and city tours.

Implications to real estate agents and investors with this “downsizing” of Airbnb? Foster and build up your circles of influence and partnerships with ancillary hospitality and travel offers in order to make your services unique and void filling.

 

Thanks to the National Public Radio.

Also read: Podcast: 2020 Mini Housing Boom Starts NOW! | Summer 2020 Housing Boom, Dismal Home Sales BUT Improving, What’s Coming Next? “The Worst Economy in Our Lifetime”