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If Airbnb is willing to pay 14 weeks (3.25 months) of severance, they must believe this is going to go on significantly longer than that. Or they're using this

• ashtonkem 7y ago
  I personally suspect that travel related industries will be one of the last to recover, both due to consumer reticence and due to lower levels of disposable income during the recovery.
  • toshk 7y ago
    Maybe but Im guessing there will be 1 to 3 months flights are open in summer and there will be lots of crazy partying and spending. (in Europe)
    • baxtr 7y ago
      Oh yeah. I feel like there are going to be totally crazy parties popping up everywhere like there is no tomorrow. And then we will have a spike in births around Feb/Mar 2021
      • ashtonkem 7y ago
        Oh yeah, there’ll be a baby boom, but it’ll all be first born children.
    • karthikb 7y ago
      I'm not so sure. Airlines have sent huge numbers of their aircraft to the desert for storage, so quickly spinning up flight supply and then spinning that back down will be expensive.
      • xur17 7y ago
        I find it unlikely this will be the limiting factor in flight demand. Flights are typically booked a few weeks in advance, which is adequate time to go retrieve the planes from the desert and inspect them to insure they are airworthy. It's not like people are going to be showing up at airports overnight buying flights for the same day.
        • toshk 7y ago
          I often buy week or two weeks before
  • jdminhbg 7y ago
    > lower levels of disposable income during the recovery. There's also going to be a lot of pent-up demand from people who didn't lose jobs and had no outlet for leisure spending during the quarantine. I'm not sure which will win out.
    • ialyos 7y ago
      But most people are capped to how much they'll spend on leisure by their vacation time. So there probably isn't much headroom to be gained for people who are regular travellers post this pandemic.
      • jdminhbg 7y ago
        Sure, but like vacation money, vacation time has also been curtailed. I'm currently not on a vacation I had previously planned and working instead, saving both time and money I would have otherwise spent.
        • bagacrap 7y ago
          I'm in the same boat. Dearly wish I could take a vacation but the state has banned short term rentals for some reason (hotels still open though). So when they let us out of house arrest I plan to get out of town asap.
    • remus 7y ago
      On the other hand we're almost certainly heading for a recession so (you would hope) there would be some reticence to over spend on luxuries like holidays.
    • JMTQp8lwXL 7y ago
      The pandemic doesn't end simply because quarantine is lifted. People will seriously question flying or passing through airports, especially as case counts are getting worse while the restrictions are being lifted.
      • 7y ago
  • itake 7y ago
    Also, companies are realizing that maybe they don't need to spend thousands of dollars for last minute business trips if they can just do a zoom meeting instead.
    • nilkn 7y ago
      Personally I don’t think this is true. The entire sales team where I work is itching to be able to travel to potential customers again. They’re not at all satisfied with Zoom as a replacement.
      • mlthoughts2018 7y ago
        Administrators above them though are beginning to see their desire to travel isn’t actual justified in greater business value, so their mere preference or their assertion is less likely to be believed.
        • nilkn 7y ago
          Travel for current or prospective customers has some of the best ROI of nearly any expense at the company, and this is well understood. To the contrary, everyone up the chain including the CEO is even more eager to resume sales travel.
          • mlthoughts2018 7y ago
            This is precisely the falsehood the present time is dispelling.
            • TheCoelacanth 7y ago
              I think most salespeople have significantly decreased sales right now. There are obviously other factors contributing to that other than the lack of travel, but this is not proving that sales will be fine without travel.
            • 317070 7y ago
  • yumraj 7y ago
    Especially Airbnb. People will be more willing to stay at a hotel where at least some level of cleaning is guaranteed/expected. In Airbnb, and I have no such guarantees and no idea who stayed at the property before me.
  • prawn 7y ago
    We cancelled a trip to the US from Australia that would've been in full swing right about now and would normally be very keen to reschedule. However, even once restrictions lift, travel insurance is not likely to cover health issues in the US (especially a declared pandemic) and the risk of incurring huge costs is too great. That sort of thing may be a factor for many people.
• amiga_500 7y ago
  It's going to go on far, far longer than 14 weeks. Airbnb are going to have issues, as the longer this drags on, the more landlords are going to be forced to sell or commit to long-term rentals, limiting the number of eligible places, even if there is some later snap-back (due to say a very effective vaccine).
• khalilravanna 7y ago
  Depends. I'm a finance noob but I think there's a big difference from an accounting perspective to say "we have a big expense to pay for the next ~14 weeks" versus "we have a big yearly expense that will continue in perpetuity". I think this bookkeeping is especially important when looking for funding. Perhaps someone with more savvy and better articulation of the nuances can chime in here. (I'm interested myself on if I'm way off the mark here.)
• SpicyLemonZest 7y ago
  Underperformance is always relative to some degree. They most likely decided that much of the stuff that 25% is working on - the article mentions "experimental and costly endeavours" - won't be feasible even after the crisis is over and people book short-term rentals again.
• empath75 7y ago
  It's going to be years before the travel industry recovers
• IkmoIkmo 7y ago
  I think it's quite obvious that tourism isn't going to recover back to 100% where they were in 3 months, no... Note that '100%' includes the growth prospects that Airbnb still had in January 2020. 'startups' like airbnb hire for growth. 25% workforce cut is roughly the growth prospects (20-30% per year) that airbnb had last year. So no, that recovery won't come in just a few short months. For one because there's still a global pandemic related global lockdown. Second, because an effectively rolled-out vaccine is not expected until at least next year. Third because tourism is hardest hit in a normal economic crisis, in a recession and 20% unemployment figures like now, the first thing you stop doing is taking international trips for fun. Fourth because in a virus pandemic, tourism (concentrated populations gathering in hotspots like a museum, bus, airplane etc, and transporting the virus across borders) is a high-risk activity that gets restricted way more than other economic sectors like farming, manufacturing, or work from home office jobs. Fifth because most of airbnb's stock is caught up in one of two categories: people renting out their home when they're away on vacation, these people are staying home and aren't making their real estate available. Or professional airbnb companies which purchased real estate that's only economic with large revenues, financed with leveraged mortgages, many of these companies are set to collapse in a 3-month shutdown, let alone a 6-month low-activity industry. A lot of these will be folding and selling their properties. Both the demand side and supply side is going to take a hit, airbnb will run much less business for the next year at least and will need to bounce back. It won't be easy. Especially in an industry where you'll see dirt-cheap hotel prices competing for a few years.
  • r00fus 7y ago
    > Or professional airbnb companies which purchased real estate that's only economic with large revenues, financed with leveraged mortgages, many of these companies are set to collapse in a 3-month shutdown, let alone a 6-month low-activity industry. A lot of these will be folding and selling their properties. I wonder how this is or will impact the real-estate market? Are enough people going to foreclose without interested buyers that the market takes a plunge?
    • jdhn 7y ago
      This conversation has come up a lot in real estate circles. I think it depends on the debt load that people have, which means that more expensive places that have lots of Airbnb's will be hit the hardest. Anecdotally, my friend outright bought a house outside of Detroit to use as an Airbnb. With no mortgage to pay and property taxes low, he's deciding whether to wait it out until people start travelling again, or put it up for rent.
• notjustanymike 7y ago
  Take any sane model of the virus and you'll see that we're headed for a rebound due to early re-opening of states. I'm starting to bet against this entire year at this point.
• r00fus 7y ago
  I have heard of people taking a luxury Airbnb near where they live for a month since kids can be remote from school along with parents, and I just don't trust hosts or previous guest enough to ensure that the place is clean.
  • cactus2093 7y ago
    All indications at this point are that the virus spreads a lot more through the air than via surfaces. And it only stays active up to 3 days on plastic and metal surfaces, and that's in ideal conditions. If you bring cleaning supplies and just wipe down high-contact areas like counters, doorknobs, refrigerator handle, etc. when you arrive, it doesn't really seem any more risky than something like bringing in groceries from the grocery store, which may have been touched by other people, the cashier, etc. Or to be extremely cautious, you could pay for an extra 3 days prior to arriving to make sure nobody has touched anything in that time. If you're gonna be there a full month anyway, what's another 3 days added on to the cost.
• iphone_elegance 7y ago
  their specific market is going to be damaged for a long time
• llamataboot 7y ago
  I mean, personally I think a year is a better time estimate for connectivity returning (and maybe 3+ for economic recovery) but you are also looking at some specifics to airbnb here - much of their growth was people converting long-term rentals to short-term rentals - many of those will either get locked back up in the long-term rental pool or go into foreclosure You also have the case that like stock prices employee hiring is often based on projections for anticipated need in a high-growth business - it's such a friction point, you are trying to stay ahead of the curve to build the capacity to grow now and handle that growth 12 months from now
• chrischen 7y ago
  Even if we "open up" the virus won't be gone and society will have to function in a cautious state to mitigate the spread of the virus still. Lockdown was simply the most extreme portion, but the rest of the mitigation efforts will still have to continue at least until a vaccine is available. This means the economy is not going to return to normal for a long time.
• sjg007 7y ago
  12-18 months minimum, probably longer.
• julianozen 7y ago
  Airbnb employee, opinions are my own. You need to operate the company under the assumption that this will happen for a very long time, and that even afterwards people will think about travel differently
  • cm2187 7y ago
    And worst case (from the company point of view) you can hire back on the cheap given where the economy and unemployment will be.
• sulam 7y ago
  All indications are that we are going to experience a not-so-great depression. Not a recession, an honest-to-goodness depression. 2020 will be down YoY in terms economic output probably across the world, and it wouldn't surprise me if that's not only true for Q2-Q4, but if it also lingers into Q1. My guess is that we will feel like things are growing again this time next year. Some economists are hoping for a better outcome than this of course, but you can connect the dots and see what people are planning for, as you've done here. Airbnb is not alone in planning for depression, and the travel industry will be worse than most.
  • ImaCake 7y ago
    Australia's gov't owned ABC news company has started spreading articles filled with either optimism or "why a depression wont be so bad". The people who know these kind of things can see the way the wind is blowing.
  • deleted 7y ago
    [deleted]
  • misun78 7y ago
    The markets seem to vehemently disagree with that entire narrative.
    • deleted 7y ago
      [deleted]
    • asdff 7y ago
      Are we looking at the same markets? We are still below where we were, and a pullback after an initial legdown is expected. Look at the chart from 2008. Leg down, pull back, some time at the top of the roller coaster to look around, then the real big second leg down that just pummels the market.
      • kortilla 7y ago
        Nasdaq is nearly flat for the year. 2008 was systemic failure of financial system. Unless you’re suggesting something much worse will be unearthed by this shock, this is looking like 1987.
• mschuster91 7y ago
  Tourism won't even come close to recover until at least half a year after a corona vaccine gets available, countries will do everything they can to avoid the need for a second lockdown, and that includes drastic border controls. And it is not sure yet how many airlines will survive the crisis, combined with planes being perfect spreading ground for corona... and without airlines there will be no tourists. The whole industry is fucked and it will probably kill some countries too, a lot have a massive, unhealthy dependency on tourism.
• battery_cowboy 7y ago
  The optimist in me wants to think that the executive team realized they had about 4 or 5 months before they had to lay off these folks, so they decided to give them a few months of time to look for work and be with their families since there wasn't that much work to do anyways. Maybe if they do this, then in a few years when the economy recovered those ex employees would want to return to Airbnb. Either way, it's a good package, since most people are getting zilch at other places.
• alfalfasprout 7y ago
  Airbnb employee here (opinions are my own)-- Brian Chesky referenced making decisions so that Airbnb would be able to weather a 1.5-2 year storm. It likely will take that long before travel begins to recover.
• adrianmonk 7y ago
  When Warren Buffett completely divests Berkshire Hathaway of all airline stocks, as he recently did, I think it's a reasonable bet that travel is going to be down for a while.
  • mywittyname 7y ago
    Airlines are very capital-intensive, and those are exactly the type of industries that do not weather recessions very well. One does not simply lay off a 50 million dollar jet. It needs to be maintained -- regardless of whether or not it is in the air, making you money, or it's grounded in a hanger.
• Kiro 7y ago
  I will not travel again in my lifetime.
• austincheney 7y ago
  The economic consensus is that COVID growth and an underwater economy will mutually reinforce each other for the next two years. If you accept that scenario your decisions in the present about finances, investments, and employment all radically shift. My decisions have radically shifted to accommodate even though I have two essential industry employers with virtually no risk of being laid off. What I personally use as a thermostat on how to proceed during adjusted life is the military. How they conduct business is bound by finances not beholden to a profit stream and they do not conduct business out of political ideals/favors. When they lift travel restrictions I will feel more confident about traveling. Once they reopen schools I will more confident about going back to work in an office building. When they drop the need for face masks or mandatory forced quarantine I will feel more confident stepping away from social distancing. Until those things happen I will continue to play it highly conservative in accordance with the suggested medical guidance to avoid exposure.