Introduction
Tourism is among the sectors most affected by the COVID-19 pandemic. Governments across the globe introduced lockdowns, quarantines and restrictions on national and international travels to protect their population (Lew et al., 2020). This resulted in economic consequences on tourism industry, especially on organizations that depends on this sector. Airbnb is one of the organizations that have felt the impact of COVID-19. It is an online marketplace that involves renting property to travelers from across the globe (Midgett et al., 2018). The organization was started in 2008 and is based in San Francisco, US. Therefore, the COVID-19 pandemic reduced the number of travelers, reducing its productivity.
The Aim of the Research
The research aim is to identify the effects of the COVID-19 pandemic on the operations and performance of Airbnb.
The Objectives of the Research
- To examine the socio-economic impacts of COVID-19 on the operations of Airbnb.
- To find out how the COVID-19 pandemic affects the performance of Airbnb. In addition, it will determine how the pandemic impacted the company’s revenue.
- To understand how Airbnb responded to the reduction of the COVID-19 pandemic. This involves understanding the strategies adopted by the company to curb the pandemic.
The Research Problem
The covid-19 pandemic has significantly influenced the operations and performance of the tourism industry. The existing literature has only explored the impact of the COVID-19 pandemic on the tourism industry (Gössling, Scott and Hall, 2020). However, there is limited information on how the COVID-19 pandemic has adversely affected organizations such as Airbnb. There is also little knowledge on how COVID-19 affects individual organizations. The existing literature has not effectively provided readers with how Airbnb worked to curb the effects of the pandemic.
Research Questions
- What are the effects of COVID-19 on the operations of Airbnb?
- What are the socio-economic impacts of COVID-19 on Airbnb?
- What actions did Airbnb take to reduce the effects of the COVID-19 pandemic?
- What are some of the challenges the leaders of Airbnb faced when trying to lower the impacts of COVID-19?
Methodology
Research Method
A research method is important in a study because it indicates how data was collected. Qualitative secondary research was used to obtain data in this research. This type of research majors in collecting data from existing sources (Green and Thorogood, 2018). The research is primarily based on secondary data gathered from books, published papers, newspapers, websites, magazines, and other sources. It is easy to use, cost-effective, and only requires skills of article analysis to obtain information (Martins, da Cunha, and Serra, 2018). The data has been gathered from reputable sources. Despite the fact that the research method has limitations, the researcher has attempted to minimize bias and errors.
Secondary data analysis was used to draw insights from sources collected. This is a great way to keep the research going by repeating, re-analyzing, and re-interpreting old research (Garcia and Mayorga, 2018). In addition, it gives researchers the chance to try out new ideas, theories, frameworks, and models of how to do research. To achieve this, the research requires extensive reading of all texts to understand the concepts. In this approach, themes were obtained from the sources to arrow down in the findings. The themes used were the implications of the COVID-19 pandemic on the tourism industry, decline in revenue and many more.
Timeline of The Research
Table 1: Timeline
Literature Review
Numerous researches have been done to determine the impact of COVID-19 on the achievement of the travel industry. According to Sobieralski (2020), the COVID-19 outbreak has significantly impacted tourism. Globally, the industry faces a rapid and sharp decline in demand and a surge in job losses, putting many businesses’ viability in jeopardy (Shen et al., 2020). Even though tourism’s increased resilience in the face of other crises, the current pandemic’s scope and complexity will almost certainly have an extended impact on the industry than other sectors. However, according to Strange (2020), international tourism is more likely to recover once major restrictions are lifted. As a result, this is due to the possibility of long-term behavioral shifts, with people becoming more reluctant to travel overseas in the future.
Gyódi (2021) examined various strategies used by Airbnb and hotels to mitigate its impact during COVID-19. They compared the two business models’ responses to the pandemic. The findings are consistent with the notion that Airbnb’s supply chain is more adaptable. While hotel supply quickly recovered to levels comparable to 2019, the number of Airbnb listings reduced by more than 15%. Additionally, the price analysis determined that Airbnb rates declined at a slower rate than hotel rates (Walsh, Saxena, and Muzellec, 2020). These findings indicate that a sizable proportion of hosts have shifted away from providing short-term accommodations toward long-term rentals.
The COVID-19 pandemic wreaked havoc on the global tourism and hospitality industries. Airbnb, offering an accommodation service, faced a sharp decline in bookings as a result of the changes (BorosL, DudásG, and KovalcsikT, 2020). This study examines and compares the effects of the pandemic’s first wave on the Airbnb markets in 15 cities. Insideairbnb.com provided the data for this analysis. Special consideration was given to the pandemic’s impact on various price categories of listings (Harchandani and Shome, 2021). The result shows that the pandemic had the greatest impact on bookings and occupancy rates.
Findings and Analysis
A Decrease in Booking
The first finding is that COVID-19 had an adverse impact on the performance of Airbnb. As shown in the graph, gross booking on Airbnb declined drastically. In 2020, the company experienced a negative rate in its bookings. As a result, Airbnb reported a sharp decline in its booking operations. The graph shows that more effect was felt from March to May 2020 (Richter, 2020). However, there was a positive change in the rate of booking. The negatives reduced significantly, showing a positive gain from June to September 2020. In addition, the graph shows that in the first quarter of 2019, the gross booking value was $29.5 billion. On the other hand, the gross booking value in the first quarter of 2020 was $18.0 billion. Therefore, the effect of COVID-19 was experienced in the area of booking.
Airbnb Drop in Sales
The second finding is that Airbnb and other firms reported a decline in sales. The amount of sales is crucial because it determines an organization’s performance. As shown in the graph below, the sales of the company declined significantly (Lee, 2020). In 2019, the sales within the first quarter were about $4 billion. On the other hand, in 2020, the sales were slightly above $2 billion. This indicates that the sales dropped by about $2 billion (Lee, 2020). This is a significant amount because it can hinder the payment of hosts, employees and many more. In addition, it is indicated that the impact of COVID-19 was felt more by Airbnb competitors in the market. For instance, Marriot reported a decline of about $8 billion in sales due to COVID-19 (Lee, 2020). As a result, a drop in sales is one of the areas COVID-19 pandemic affected Airbnb in the sector.
Conclusion
Airbnb experienced the effects of COVID-19 due to a decline in bookings and sales. In reaction to the COVID-19 pandemic, governments restrict international and local movements. This main aim was to protect people living in different countries. As a result, Airbnb reported a decline in bookings and sales. The company usually rely on tourists from across the country to offer accommodation. However, when people were forced to stay in their country, there was a sharp decline in sales.
Reference List
Gyódi, K. (2021) ‘Airbnb and hotels during COVID-19: different strategies to survive,’ International Journal of Culture, Tourism and Hospitality Research. Web.
BorosL., DudásG., & KovalcsikT (2020) ‘The effects of COVID-19 on Airbnb. Hungarian Geographical Bulletin, 69(4), 363-381. Web.
Garcia, N.M. and Mayorga, O.J. (2018) The threat of unexamined secondary data: A critical race transformative convergent mixed methods. Race Ethnicity and Education, 21(2), pp.231-252.
Gössling, S., Scott, D. and Hall, C.M. (2020) ‘Pandemics, tourism and global change: a rapid assessment of COVID-19,’ Journal of sustainable tourism, 29(1), pp.1-20. Web.
Green, J. and Thorogood, N. (2018) Qualitative methods for health research. Sage.
Harchandani, P. and Shome, S. (2021) Global Tourism and COVID-19: An Impact Assessment. Tourism: An International Interdisciplinary Journal, 69(2), pp.262-280.
Lee, D. (2020, November 17) Five takeaways from Airbnb’s IPO filing. Financial Times. Web.
Lew et al. (2020) Visions of travel and tourism after the global COVID-19 transformation of 2020. Tourism Geographies, 22(3), pp.455-466. Web.
Martins, F.S., da Cunha, J.A.C. and Serra, F.A.R. (2018) ‘Secondary data in research–uses and opportunities,’ PODIUM sport, leisure and tourism review, 7(3).
Midgett et al. (2018) ‘The sharing economy and sustainability: A case for Airbnb,’ Small Business Institute Journal, 13(2), pp.51-71.
Richter, F. (2020). How Hard Has Airbnb Been Hit by the Pandemic? Statista Infographics. Web.
Shen et al. (2020) ‘The impact of the COVID-19 pandemic on firm performance.’ Emerging Markets Finance and Trade, 56(10), pp.2213-2230.
Sobieralski, J.B. (2020) ‘COVID-19 and airline employment: Insights from historical uncertainty shocks to the industry,’ Transportation Research Interdisciplinary Perspectives, 5, p.100123. Web.
Strange, R., (2020) The 2020 Covid-19 pandemic and global value chains. Journal of Industrial and Business Economics, 47(3), pp.455-465. Web.
Walsh, C., Saxena, D. and Muzellec, L. (2020) Airbnb: Managing trust and safety on a platform business. The Irish Journal of Management, 39(2), pp.126-134. Web.