Airbnb had a tumultuous 2020, going from planning an IPO early in the year to losing 80% of its booking in eight weeks come March.
Despite the obvious challenges as a result of the coronavirus pandemic, in the third quarter of 2020 the company claimed it had seen a return to near-third quarter 2019 business levels and had its most profitable three-month period since its creation.
It then saw a window of opportunity and rounded out the year with a hugely successful stock market debut.
While dealing with various COVID-related travel restrictions in different countries, the company is also looking ahead to what might be some of the more permanent trends going forward.
Brian Chesky, the company’s CEO, laid out his three main travel trends during the Reuters Next virtual event last week.
Chesky has made some big statements over the course of the pandemic, in terms of travel being over but he qualifies that with some detail on how things are changing.
“I think travel is never going back to the way it was before the pandemic but it doesn’t mean travel is not coming back,” he says.
Prior to the pandemic, business travel dominated travel, says Chesky, and he sees a shift to travel more for leisure as consumers, stuck in their homes for so long, yearn to get out.
This is coupled with a “significant permanent decline in business travel as we know it” where the traveler takes a plane to go to one meeting.
“As companies struggle to work remotely, a new type of business travel will emerge. It’s what I would call a hub and spoke model, where people work remotely but every quarter they go back to their HQ for a couple of weeks.”
His second trend is not so much about the move from cities to non-urban destinations but more of what he calls “city to everywhere” – where people don’t just travel to the top 50 cities.
Chesky says the “playing field is now level” with people traveling by car and smaller cities, communities and rural areas all getting a look in.
New forms of “travel”
The idea of mass travel, with people going to big cities, staying in tourist hotel districts and getting in line for landmarks, will be replaced by more meaningful travel.
Chesky says that its guests’ survey show that while 54% say they plan to travel or are already planning their travel in 2021, they want to see friends and family and desire “meaningful, more human, more authentic, less synthetic way to travel.”
“They will go to landmarks but not in the same volumes. I think the genie is out of the bottle. The real human connection, you still need that – that’s what we’re all feeling.”
Touching on a fourth trend, maybe the biggest says Chesky, is travel redistribution so that there is no longer a tourist district and a residential district in cities.
He talks about Airbnb serving and strengthening the communities it is in. “It’s about giving them the amount of [visitors] they want and ideally not more,” he argues.
Some of what Chesky says echos what psychologists are seeing.
Brent Coker, a consumer psychologist at the University of Melbourne, talks about the new luxury being “crowdless experiences for travel.”
During a CAPA Live session last week, he also discusses the rise of Gen Z how they value authenticity from brands and their desire to “do good and foster social equality.”
He says that 66% will make purchase decisions based on a brand’s stance on social issues and most believe brands have a greater role to play in solving social ills.
Coker says: “Consumers are increasingly starting to blame brands, or look to brands, in terms of how they’re impacting the environmental conditions, and how they can help the environmental conditions. So, it’s not just the governments that are in the firing line now.”
Interesting to note how Airbnb’s stock price gained on news of its banning stays in Washington D.C. area over the course of this week’s inauguration.
Chesky says companies will be remembered for how they handled a crisis.
He talks of not ever wanting to make decisions based on “near-term stock price fluctuations” but the need arising sometimes to make principle decisions that are irrespective of what the business outcome will be.”
“I’ve found that in times of uncertainty, a principle decision is often better than a business decision because you often can’t predict what is going to happen.
“We didn’t know what was going to happen when we banned bookings in the D.C. area – we did know what the right thing to do was. Over time if we continue to make the right decisions and people know what our principles are and agree with those principles then they’re going to trust us and our business is going to do well.”