Bloomberg Businessweek - USA (2020-12-07)

◼ TECHNOLOGY Bloomberg Businessweek December 7, 2020

21

PHOTOGRAPH

BY

DAMON

CASAREZ

FOR

BLOOMBERG

BUSINESSWEEK.

DATA:

AIRBNB

by roughly two-thirds, and travelers taking lodgings

less than 50 miles from their homes constituted the

fastest-growing part of the business.

Airbnb has never fit into existing categories.

Silicon Valley claims it as a tech startup, one of the

shining stars of a sector once referred to as the shar-

ing economy. Hotel chains see it as a threat while

dismissing it as an online travel agency, or OTA, akin

to Expedia Group Inc. or Booking Holdings Inc.,

which connect vacationers on one side of the plat-

form with lodging owners on the other. While that

comparison is apt in some ways, Airbnb exists in

itscurrentformbecauseit hascreateda wholenew

travelcategory,transformingtheactivityofcrashing

inotherpeople’shomesintoamillennial-friendly

alternative to hotels that either seemed too boring

or were too expensive. For customers, it’s an alter-

native to Marriott, not Priceline.com.

The company is outshining OTAs and hotel com-

panies during the pandemic, both of which it listed

as competitors in its IPO filing. Unlike other OTAs,

Airbnb doesn’t book flights, and it doesn’t need busi-

nesstravelorbigconventionsasmuchastraditional

hotelsdo.Allthisleftit lessexposedtothespecific

shapeofpandemic-era weakness in travel. When

Covid-19 turned hotel (and apartment building) lob-

bies and elevators into worrisome zones of potential

infection, the company played up its ability to offer

isolated destinations and prodded hosts to offer dis-

counts to customers booking longer-term stays. 

The part of the travel industry Airbnb most

THE BOTTOM LINE Airbnb’s business has shrunk during the

pandemic, but thanks to a flexible business model it’s in far better

shape than many competitors.

resemblesrightnowmaybebudgethotels.Choice

HotelsInternationalInc.,whichfranchisesbrands

suchasComfortInnandEconoLodge,hasalsoben-

efitedasfamiliescanceledflightsandtookroadtrips

instead.Manymotelsletguestsenterroomsfrom

theparkinglot,bypassingcommonareas.Choice’s

revenuefell31%forthefirstninemonthsofthe

year,rightinlinewithAirbnboverthesameperiod.

Thecompanyalsosharesoneoftheprimary

problemscheaphotelsface:crime.Roadsidemotels

havepersistentissueswithdrugdealingandpros-

titution;Airbnb’s“partyhouse”problemhasledto

lawsuitsblamingit foritsroleinshootings,other

crimes,andthespreadofCovid-19.Thecompany

declinedtocommentbuthasrecentlyhighlighted

measuresit’stakingtomakeitsplatformsafer.

Airbnb’s strength may be that it can morph into

a kind of artisanal Econo Lodge, offering value lodg-

ing for car vacations when that’s where the demand

is. When it comes time to return to cities, it may find

the competitive landscape changed. Many markets

it relied on pre-pandemic, including Amsterdam,

Barcelona, and New York, have sought to increase

regulation on short-term rentals, and property own-

ers may convert some units to permanent housing.

“I’m typically super-optimistic about Airbnb

because they’re so agile,” says Scott Shatford, chief

executive officer of AirDNA, a company that col-

lects data on the short-term rental market. “But

the urban recovery isn’t going to be the sling-

shot, V-shaped recovery that it was in rural mar-

kets. There’s going to be so much competition from

hotels, and they’re going to have to battle for guests

on rates.” �Patrick Clark

DATA:AIRBNB

◀ Iloulian says that “The

demand moved around,

it didn’t vanish”

Bytraveldistance,in miles

Fewerthan 50 50 to 500

More than 500

Airbnb Nights and Experiences Booked

Bytriplength

1 to 27 nights 28 nights or more

10/2019 9/2020

24m

12

0

10/2019 9/2020