Two years ago, Airbnb’s business dropped 80%, its initial public offering (IPO) stalled, and some people doubted that the company would even make it through the COVID-19 pandemic, CEO Brian Chesky said on Tuesday.
Today, the home-share company has a market cap of about $97 billion and its revenue surged 70% over the past year as bookings surged. Over the first three months of 2022, more than 102 million nights were already booked.
Chesky wrote on Twitter how the company rebounded and even ended up having its “most productive two-year period” in its history.
The chief executive said the company “simplified” its business and started “prioritizing the everyday people who host their homes and offer experiences.”
During this process, Airbnb had to cut the “vast majority” of projects, shuttered its business units and even “made the painful decision to do a layoff,” according to Chesky.
However, the company “significantly improved our cost structure, decreasing our cost of revenue (merchant fees and servers), and tightly managed our fixed costs,” he said.
The company also switched its marketing approach. When travel came to a standstill at the start of the pandemic, Airbnb paused its marketing efforts and shifted its focus to public relations.
When the company started to reinvest in brand marketing in 2021, Chesky said the company reduced spending to 20% of its revenue, down from 34% in 2019.
Then, “revenue dramatically rebounded when people disproportionately started traveling closer to home, staying in Airbnbs in thousands of towns and cities,” he added.
“People weren’t just traveling on Airbnb, they were living on Airbnb,” Chesky added.
Last year, about 20% of nights booked were for stays of at least a month. Nearly 50% of nights booked were for at least a week. It’s a trend that Chesky believes will continue.
On top of that, “urban and cross-border travel, which were the majority of our business before the pandemic, are back to 2019 levels,” he said.
Overall, the company made more than 150 upgrades and improvements to the platform, such as launching its “I’m Flexible” feature, according to Chesky. The feature allows guests to choose unique listing categories including boats, tiny homes, domes, A-frames and even private islands.