Airbnb was formed during the 2008 financial crisis and evolved during the Covid-19 pandemic. WSJ’s Preetika Rana and Airbnb CEO Brian Chesky share insight into the home-sharing giant’s success and what the future might hold for the company.
Photo: Lucas Guilkey
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With the global economy potentially heading towards a recession due to the impact of COVID-19, there has been much speculation about the ability of certain industries to weather the storm. One industry that has been closely watched is the sharing economy, specifically Airbnb.
Airbnb has become a dominant force in the hospitality industry since its founding in 2008. The platform allows individuals to rent out their homes or apartments to travelers, offering a more affordable and unique option for lodgings compared to traditional hotels.
Despite its initial success, the company has faced some challenges in recent years, including increased regulation in some cities, concerns about safety and security, and competition from other home-sharing platforms. However, many analysts believe that despite these challenges, Airbnb could outperform a potential recession, and here’s why:
Flexible pricing: One advantage of Airbnb is that hosts can set their own prices, which can fluctuate based on demand. During an economic downturn, travelers may be more price-sensitive and seek out cheaper accommodations. Airbnb’s flexible pricing system can help attract these cost-conscious consumers and keep demand high.
Economies of scale: As Airbnb has grown, it has taken advantage of economies of scale to reduce costs and increase efficiency. The company has a vast network of hosts and guests, which can help it weather the storm of a recession. Additionally, the platform already has a low-cost model, as hosts provide the accommodations rather than a traditional hotel. This allows Airbnb to operate with lower overhead costs.
Unique experience: Another advantage of Airbnb is that it offers unique accommodations that are not available in traditional hotels. This can be a selling point for travelers who want an authentic local experience, especially during a recession when people may be staying closer to home rather than traveling overseas. The platform can also provide an opportunity for hosts to offer additional experiences, such as cooking classes, tours, or outdoor activities, which can help attract more business.
Risks
However, while Airbnb may have some advantages, there are also potential risks involved. For example, if a recession reduces demand for travel overall, Airbnb may still see a decrease in bookings. The platform also relies heavily on consumer trust, and any issues with safety or security could damage the company’s reputation and affect future bookings.
Additionally, the regulatory environment remains a key concern for the company. Some cities have implemented stricter regulations on home-sharing platforms, and this trend could continue during a recession as local authorities turn to alternative sources of revenue.
In conclusion, while there are no guarantees in the face of an economic downturn, Airbnb appears to have some advantages over traditional hotels and even some other segments of the sharing economy. However, the company must remain vigilant and address any potential risks, including regulatory issues, security concerns, and lower overall demand for travel. Nonetheless, with its flexible pricing, economies of scale, and unique experiences, Airbnb seems poised to weather the storm of a potential recession.
The costs to renters and local jurisdictions likely exceed the benefits to travelers and property owners.
Airbnb might, as claimed, suppress the growth of travel accommodation costs, but these costs are not a first-order problem for atomic families.
Airbnb does affect long term market
You think its cheap until you get to checkout page.
I just posted a video analyzing AirbnB's stock, would love your opinion on the company
AirBnb during the pandemic was terrible!!! So many listings that wasnt active
We made hosts millionaires. Air bnb is the biggest ripoff. I have to clean and pay cleaning fees!!!!!Hotels only moving forward. let air bnb crash.
From my personal experience AIRBNB customer support doas not work at all. If you host you have no possibility to call them. It just do not work and if you are using services someone pick you phone but tell you no with even worse english than my. I can not imagine what would wappenend in case of any disaster.
Lets hop not, hotels are better and employ people
I'm done sitting tight for the award advance since i acquire$23,000 every 12 days of my investment.❤
Its like the half pints at bars. Making the big beers more expensive
I will never use Airbnb again. Hosts expect you to clean everything perfectly while having a $100+ cleaning fee. My latest host complained about the dust under the bed.
I made a video about that.
I used to be an Airbnb believer, but it just doesn’t make much sense anymore for most type of trips. It’s getting so expensive, it’s easier and often cheaper just to get a hotel.
I think it is the greatest idea and safety where most hotel fell to deliver on privacy and safety for tourists who are professional on vacation but not professional tourists
Awesome!!! your potential seems limitless. Setting aside funds to invest is the best way to prepare for the unexpected. I've been doing this since 2016, and I’ve amazed Good Returns.
Airbnbedbugs, cochroaches and mice or rats. Videos on let's be honest about airbnb show the reality. I rather pay too not have things moving on their own inside the place I'm sleeping. I don't do bugs or wildlife inside a space.
When it comes to investing, what is your advice to anyone with $10k and looking for the best way to invest and make good returns off it?
very well covered!
Will take a hotel any time! Everything is working or taken care of, no cleaning fees, no cleaning that you have to do yourself, no need to cook, breakfast and dinner always available, no hidden fees, reception 24/7 and staff always there to help you immmediately! And booking is done within couple of mins. I always had great experiences with AirBnb but it was just too much hassle and I ended up too tired from living in a home and not in a ”always ready for you” spotless cleaned splace without having to deal with the owner’s abode quirks.
In Germany/nordic countries in Europe Airbnb is not anymore that much more convenient than an hotel. Better an hotel room on booking or expedia.
Hate communists. Love free market economies. Greed is good. Socialism is evil.
Shame on Airbnb and on the hosts for charging so much, almost as much as hotels.
Inspired, Make me look around and think "can this be a good or service?
Airbnb the gentrification machine.
Worst expirience ever.
I hate AirBnB.
Can Airbnb
Air BnB did the bait and switch. They started affordable and have now gotten ridiculous. 100 dollar covid cleaning fees and dishonest listings. I predict massive losses over the nexr 2 years.
I dunno, Airbnb used to be cheaper than a hotel, but now that 80 a night rental with a 150 a night cleaning fee is getting out for hand
I'm glad I got into crypto when I did because it’s been a turning point for me financially,been my best decision so far
airbnb customer service is another potential risk. its probably one of the few companies where its dissatisfaction rate increased after speaking with a customer service. Especially regarding to sensitive issues, like racism
Hosts got greedy, investment groups came in with their coup on the housing market and pushed out the family looking for their hard earned American picket fence docile. This video could have been summarized in a minute half.
Can’t beat the security of a hotel, a pool… plus the price is the same !!! Airbnb will be gone is 5 years
Taiwan needs more anti-ship and anti-air weapons. If they can make it impossible for large ships to approach the island, they might have a chance. Defenses will most likely be hit with air strike, so make it impossible for air to approach the island too.
Awesome! your potential seems limitless. I'm fascinated with investing but being a single mother and juggling all these things are quite difficult. How best can I start and what sector to engage in?
Sometimes I really wonder how people make huge profit investing in the stock market, I know investing is a legitimate way to gain financial freedom but how is it done?
AirBNB is part of the pseudo sharing economy. What sets it apart from the traditional hotel market is that it has shifted the fixed costs of the business onto the hosts.
As an example traditional taxi companies owned and maintained its cars which costs a lot of money. Uber shifted the fixed cost onto car owners which makes it a more efficient and profitable company that has put taxi companies out of business.
Does Airbnb have a solution for the listings that charge crazy fees. They only charge $100 a night to seem like a good deal, but after the fees its like $400 a night.
There are no shortcuts to getting rich ,but there are smart ways to go about it. I realized early in life the importance of investing for financial independence and have invested with great returns working with a professional.
The nail in the coffin was
“Must take out trash to designated site, make sure dishwater and dishes are washed and dried, and houseboy picked up”
Yet they still slap a $95 cleaning fee.
At this point your better off at a hotel!
Seeing an online advert that spoke about crypto and stock, after my reviews about them I gave it a try and it was real but unfortunately I lost contact with them within a short period of time and I have been going through series of advert to find something real. Anyone that knows a good source can share