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Will Airbnb Survive the Coronavirus Pandemic?

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The pandemic has affected a lot of people and companies are suffering from malls, factories, retails, agricultural industry and even the educational sector. The real estate industry is also suffering from this pandemic as well as real estate brokers and one of the major hit is on Airbnb.

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What is Airbnb?

Airbnb is an online lodging marketplace where people who need a home to stay for a short visit can meet with people who want to give their homes out for a short period of time to make money. With this, Airbnb can allow property owners rent out their property to guests. The company started in 2008 by three friends and the company since then has booked over 100 million people into different properties ranging from space, room, and or the entire space. The company do not bill guest until the property owner accept the reservations. The company has property listings from over 190 countries and 30 thousand city. In 2017, the company was valued at $31 billion dollars and in January 2019, the company had 50.2 million visits on their website.

The company is like a broker and it makes money by charging both guests and hosts a fee. The company charges the host 3% and the guest 14% from their pay. Airbnb covers the property owners against damages from guest so it is like they give you an insurance when your property is being used.

What will happen to Airbnb post covid-19 pandemic?

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As the pandemic has proven that a lot of things can be done locally through the internet instead of travelling from one location to another, it is visible that the tourist rental market will drop. The value of the company has dropped to $18 billion and the company lay off 1900 workers summing to 25% of its workforce. Although the company doesn’t have an untarnished record, it has been able to strive and be the leader in its industry and was profitable, and the company planed on going public in 2020 until the virus came. What do you think will happen to a company that deals with two party and doesn’t hold the funds but just get commission when the government places lockdown on everyone and people had already made payments for homes they wanted to lease but couldn’t get satisfaction for their money? A refund!!! Although the company already announced an extenuating circumstances policy which was activated around the world dealing with the guest’s refunds but that alone isn’t enough.

The policy created by Airbnb currently favors guests over hosts which has caused a lot of upheaval but it is something that can’t be dodged. The company has decided to assist hosts who struggle with cancellations with $250 Million as each host will get within 12% to 25% of their rental fee. While this is going on, some guest haven’t received their refunds.

Post Covid-19 pandemic, Airbnb seems to be banking on a travel boom but with the way things are going, will there be an immediate travel boom, will people have enough money to throw around on luxury and vacation, will businesses prefer spending money on travelling cost or just fix a time for a tele-meeting?