Drastic Digitalization amidst a Global Pandemic : Airbnb

Lisa Patel
6 min readDec 4, 2020

Airbnb: “Don’t go there, Live There”

It’s been a rollercoaster year for Airbnb since the global pandemic, tourism and travel is one of the topmost industries affected. It is projected by the World Travel and Tourism Council, a global loss of 75 million jobs and $2.1 trillion in revenue if the pandemic continues. The global pandemic halted Airbnb’s much-anticipated plans for an IPO. The home-sharing platform had planned to file back in March to go public but then coronavirus hit and its revenue nose-dived.

A Dramatic Turnaround

At the beginning of March 2020 when nearly every state in the U.S was on lockdown and Air travel was to halt, the travel industry was impacted immensely.Due to the travel restrictions and flight cancellations, the demand for short-term rental homes has drastically dropped. The company saw an overall 40% drop in booking during that period. As a result, Airbnb lowered its internal valuation to $26 billion, which is a 16% drop from the $31 billion valuations. To get through the crisis, in May the company laid off about 25% of its workforce — about 1,900 of its 7,500 employees — and ​raised $2 billion​ in a combination of equity and debt to shore up its balance sheet. The company also suspended all of its marketing in an attempt to save $800 million this year. Meanwhile, company founders forged their salary for the next six months and top executives are to voluntarily accept a 50% pay cut.

Initial Responses

As the crisis had begun, Airbnb announced its new circumstantial policies in response to the safety and concerns of the guests. The policy stated: All guests booked for check-ins between March 14 and May 31 were eligible for full-refund cancellations, overruling stricter cancellation policies chosen by hosts. Airbnb prioritized the health of the public and its communities by doing this but also acknowledged that the decision to offer guests a refund had caused hardship for many hosts. The company had set up a relief fund of $250 million to help those affected through the crisis.

Later Airbnb’s CEO Brian Chesky announced that the company has established new cleaning guidelines for hosts, allowing hosts to wait a minimum of 24 hours between bookings at all its properties to limit possible coronavirus transmissions. The company said it will give a special call-out to the hosts who agree to follow the new protocols that CDC recommends, so the guests will know they’ve committed to sanitization practices and are following more rigorous cleaning.

Digital Transformation- Redesigning the product

Digital transformation requires constant change. In response to the crisis, Airbnb tweaked its landing page and introduced new features, as the online rental marketplace looks to capitalize on a growing segment of its business. Airbnb added new offerings; Online experiences, Monthly stays, and Frontline stays.

Online Experiences​ where hosts offer online classes such as a cooking class, virtual tours, magic shows, and many more. Airbnb started this offering by a launch program -”The new way to travel from home” with 50 options, the company soon added thousands more after the success of the launch.

Long term stays​ allow guests to book monthly stays. According to Airbnb, 80% of Airbnb hosts accept longer-term stays and about half of the company’s active listings now provide discounts for stays of one month or longer.

Frontline Stays ​is a new initiative by Airbnb to support medical professionals and health care workers. Under the new program, Airbnb aims to provide housing to medical workers so they have a place to stay while away from their homes. Airbnb also waived all the fees incurred for this new initiative.

Airbnb is trying to generate revenue by selling the “virtual travel” experience and strategizing more on increasing long term stays as the company sees potential in the features for the near future.

Key Drivers

● Real time deals on long-term stays can allure more customers.

● Personalization of feed by listing nearby properties, unique stays and suggestions of online experiences based on search history, using machine learning.

● Branding online experiences and virtual tours in a collaborative environment, attracting customers in a group setting allowing them to participate together virtually.

● New features enable hosts even without a property to sell experiences on the platform, increasing customer engagement apart from rentals.

● Demonstrating certified hosts following cleaning practicing and hygiene. Building a level of trust in safety for both parties gives Airbnb an advantage compared to the hotels and lodging business.

● Proactive and empathetic marketing actions about the relief funds and frontline stays are helping to send out a balanced message about Airbnb prioritizing community.

Current Scenario

Airbnb has slowly started recovering, Booking rates were ​above expectations​ from June 2020 onwards and the Airbnb business model was taking advantage of changing host and tourist behavior during the pandemic since February. With many people avoiding plane travel and preferring to avoid crowded cities and venturing too far from home, hosts in rural areas of the U.S. earned more than $200 million in June 2020. These new digital transformations have shown early signs of success as company business. Although domestic bookings have been going back to normal, it might take some time to reassume the international booking for Airbnb. However, the future of the travel industry and tourism is still unpredictable.


Airbnb has shown its capabilities of digital transformation from its rapid product redesigning and rebranding amidst a global pandemic. The company redefined its business model by strategizing digital drivers. Despite broad marketing cuts to reduce losses, Airbnb has strong brand recognition through past campaigns like “Don’t go there. Live there” that tapped into people’s desire to not just visit a place but have a more authentic experience of it. What Airbnb has been able to do so quickly, pivoting to a long-term stay model and attract more hosts in rural and suburban areas that are currently most in demand, as well as enhance its offerings with virtual experiences through its website puts the company ahead in comparison to its competitors. According to CNBC news, investors are still approaching Airbnb regarding the IPO filing. Airbnb’s digital transformation has been nothing but adaptable, flexible along with improving customer experience which is the main reason why users and investors still believe in Airbnb’s potential.The future of the world, let alone the travel industry, is unpredictable but those who come up with the most digitally innovative ideas will survive.


Initial Changes: https://www.thedrum.com/news/2020/03/30/airbnb-halts-marketing-spend-800m-savings-plan

Relief funds: https://www.cnbc.com/2020/03/30/airbnb-extends-coronavirus-cancellation-window-to-may-31-due-to-coronavirus.html

Cleaning Initiatives: https://www.businessinsider.com/airbnb-24-hours-between-rentals-limit-covid-spread-2020-4

Online Experiences: https://news.airbnb.com/enjoy-the-magic-of-airbnb-experiences-from-the-comfort-of-your-home/

https://www.forbes.com/sites/laurabegleybloom/2020/05/22/virtual-travel-airbnb-making-money/ #e908797813ff

Frontline stays: https://www.airbnb.com/d/covid19relief

Airbnb Losses: https://www.wired.co.uk/article/airbnb-coronavirus-losses

Airbnb IPO news: https://www.cnbc.com/2020/10/02/airbnb-seeks-to-raise-roughly-3-billion-in-ipo.html



For understanding current data: https://www.airdna.co

Airbnb Ceo’s letters: https://news.airbnb.com

My motivation behind this article was to understand the impact of digital transformations that it can make on a company. As travel is one of the most affected industry since the pandemic hit I decided to study it, and what better company to understand than Airbnb who did a phenomenal job on pivoting the business strategy since the beginning of the pandemic. Feel free to put your thoughts about the article in the comments below :)