Airbnb’s Coronavirus Crisis: Inside Story Behind DownFall
ou may have heard the word Airbnb if you have traveled in the USA or any other European country. Before going to the inside story behind the downfall on Airbnb’s coronavirus crisis, let me tell you a story.
Assume you are wandering in a new city for your favorite, political leader’s conference but you don’t any relatives right now for staying in the city. Moreover, the hotels that you may want to look at are booked due to the high number of visitors.
The problem gets bigger when you own an empty room and you want to help those needy people but you don’t have the capability of offering them space.
As you are not sure of their identity and also you are not sure about your safety. These are pretty much common scenario is not only in our country but also all over the world.
In fact, these problems that are mentioned above just gets bigger and bigger. Airbnb, A company that decided to take steps to solve the problem on their own.
If you are a dweller of Bangladesh then chances are very less that if you have heard of the name of the company Airbnb. Now, you may have started to think about what does Airbnb means and what’s is objective is.
What is Airbnb?
Airbnb is a platform that allows you to rent house owners empty rooms to the strange people which means it may be called the uber for renting a house. The system is very simple for the house owners and guests.
For example, if you want to host someone then what you need to do is to register your account as a host. Then you have to take some photos and a small description along with the food you want to offer to the customers.
So, whoever looks for a room in the city will enter into the app or website and can easily found the nearby available places for staying. If your place is nearby then it will be shown to the interested guests and if they like your place then they will be likely to stay at your place. You can also add the price you demand staying.
If the price and description are liked by the guest then surely your place is likely to be taken by the guest that means you are have got the chance to host the guest.
How Airbnb Was Founded
The story of Airbnb’s being built is very interesting. The three airbnb founders, Joe Gabia and Brian Chesky, Nathan Blecharczyk who were designers by profession wanted to do something big in life.
There was a conference in San Fransisco of designers but unfortunately, all the hotels were sold out and those two young aspiring designers noticed this very carefully. On the other hand, they were also in trouble due to the rise in their house rent by 25%.
Seeing the situation, they wanted to make some extra cash, and then they decided to rent their own place to the desperate designers so that those visiting designers could stay. This is how Joe and Brian made money and paid their rental.
From this incident, they saw that they had an opportunity to earn more money. That incident made them push to built a website named Air bed and Breakfast whose prime objective was to rent their empty space to the visitors.
Airbnb Growth Story
They not only offered a place to stay but also offered a city guide and made the visitors feel like locals. All of these things were possible only for 80$ and they decided to use this for their extra income. After hosting three guests they felt good and they wanted to do this more often.
After this incident in San Fransisco, they wanted to do the same with a conference in Texas. Unfortunately, only a few bookings were made and which was totally not up to the mark.
Now this time they understood that instead of focusing on only events they should focus on traveling events too. After realizing this they decided to host in DNCC, Denver in 2008 given by Obama, where 100,000 visitors were expected to come although the number of rooms for visitors was only 30,000. I guess all the readers have understood how big the problem is.
For this reason, Air bed and breakfast decided to open their site again with their credit cards. After opening the site again, their site not only got local fame but also there name was spread internationally too.
Unfortunately, their website’s traffic dropped again after the conference. With all the data they had, the air decided to go to the investors. Again, they had to face their hard luck because this time they applied to 10 investors, and 5 of them didn’t give, and lastly, no one wanted to invest.
Just like real fighters, they never wanted to give up. They wanted to focus on the political movement again. They mad cereals that had names of the two presidential candidates Obama and Mccain.
They could only be made 1000 cereal packs. They made only 500 of each candidate and marked them as limited edition due to their insufficient production capability. These cereals were priced at 80 dollars per box.
People of both political groups liked this idea and even used this as a medium for marketing. By doing this creative idea they made 30,000 dollars profit which is really appreciable.
Their self-surviving attitude grabbed the attention of Ycombinators Co-founder Paul Graham. Paul graham invested 20,00$ and soon other investors started to invest too. They raised almost 600,000 dollars this time and changed the name into ‘Airbnb’.
One of the reasons that people grabbed the idea of Airbnb is because it was the time of the financial crisis in 2008. People saw a new way to earn more money with this newly formed platform just like car owners felt the same with uber.
People first, didn’t understand how to market their room. Identifying this problem, Airbnb offered them a photographer who took the photos for free and used this as the commercial in their site. Generally, They takes 3% of the rent paid. Review systems are also there for both the guests and hosts.
Nobody, can’t give a review until or unless their staying is over which means no one can give false reviews.
How Safe Is Airbnb For Guests
Airbnb is working on its safety insurance from the very beginning. They have decided to pay more attention to safety issues by the end of 2019. You can also find the reviews of both the hosts and guests which will help you with your safety.
Is Airbnb Safe For Hosts
As mentioned earlier, Airbnb can be regarded as very safe for the hosts. However, They have a strict policy that will surely help a host in case of a safety issue.
In some cities, certain rules and regulations are important for the hosts. Airbnb restrictions can be found on their website.
Pricing of Airbnb
Airbnb’s average price is less than what you have to pay for a hotel. This is the biggest advantage of staying in an Airbnb booked the place. However, the price changes according to the service, planning, and area.
According, to Airbnb users and earnings, report everyone is more or less satisfied with the services of Airbnb.
Airbnb Bad Experiences
yes, sometimes just like any other hotel there are bad reviews which are given by customers. In some cases, the guests also get bad reviews. Bad reviews and good reviews, help both the guest and hosts to market themselves.
There are also some bad stories that are based on bad Airbnb experiences. Moreover, there are great debates about “Airbnb bad experiences” but this is being minimized by them. Their research and development team are doing great in minimizing their errors.
Airbnb And Coronavirus
Airbnb has done great in the past 12 years. They had almost a 30-billion-dollar valuation at the beginning of 2020. 2020 was supposed to be the year when it decided to go public. During the pandemic period of COVID-19 unfortunately it’s perhaps one of the most devastating startups.
Airbnb’s Coronavirus Crisis
The problem of the startup crisis started in 2019 during a house party due to a shooting. Five peoples died in that party due to mass shootings. So, they invested in safety issues and this just doubled their cost of what it was in 2017.
When the coronavirus affected Europe and China, Airbnb’s booking was collapsed. In Beijing, between 1 March and 7 March, slightly more than 1,600 bookings were made, down 96 per cent from 5 January to 7 January.
After the outbreak of corona in 2019, China, all the bookings through Airbnb got canceled overnight. This was just the start of how Airbnb’s main crisis, the crisis of existence, and the crisis of survival. Due to coronavirus, all the bookings started to get canceled.
Some of the customers wanted their refund. This is how they were struck hard due to the pandemic COVID-19.
They decided to refund the booking money to the guests and also pay 25% of the booking money to the hosts. They also decided to spend 17 million dollars to pay for the mortgage of the top-rated hosts. By April, there was barely any revenue coming to the company.
On the 5th of may, they had to cut off their 25% of the employees this shows how devastated they were by the COVID-19.
Now, Airbnb has started to focus on long term living and also changed the safety issues. This is how they has started pivoting by focusing on long term staying.
This is all about Airbnb’s coronavirus crisis. So far Airbnb has done great. During the pandemic COVID-19, Airbnb’s trouble is higher than ever before. I believe they will soon overcome this unfortunate situation.
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