Born in Boston in 1984, Nathan Blecharczyk is co-founder and chief strategy officer for Airbnb. The technology company, which is considered to be governed by the laws of e-commerce, experienced its lowest days during the pandemic. Revenues fell by 80% and about 20% of the staff was laid off. The co-founder, who regularly hosts guests in his home, tells how the business has been boosted as people have changed their travel habits.
Airbnb was founded in 2008 because of problems paying rent with his partners. Now, many people find themselves in that situation because of the crisis.
Yes, 14 years ago, when we started the company, Brian Chesky, Joe Gebbia and I were struggling to pay the rent. Now, a third of hosts in Spain tell us that hosting helps them pay for the rising cost of living. Half of them, say that it helps them pay for their housing. It’s a great business for our hosts, and I think it’s also bringing a whole new wave of people to the platform. The typical host in Spain currently earns around 3,700 euros a year, equivalent to two months’ additional salary.
How did the company experience the pandemic?
We had to go through a very difficult transition because our revenues dropped by 80% in the space of a few weeks. We took a difficult decision and laid off about 20% of our staff. That’s about 1,800 people. After the downsizing, Airbnb has experienced tremendous growth and strength. And again, we had record results in the third quarter. We are in a very good position.
The big tech companies are seeing declines in the stock market and cutting their workforces because of the macroeconomic environment. In the last year, Airbnb has lost more than 40% of its share value. Could there be cuts in the company again?
We don’t expect layoffs and we continue to hire now that we are growing in a very disciplined way. We learned a lesson at the beginning of the pandemic, as many other companies are learning now. After a decade of growth and prosperous times, with access to easy money, it had been very easy to hire a lot of people. Frankly, too many people. And so we had to make that correction several years ago. But we learned and we continued to grow in a very sustainable way. Approximately 8% annual growth in the number of employees. Also, we have not seen that the effects of the war in Ukraine have affected our financial results.
The company has a philanthropic arm that has reached out to Ukraine.
We have hosted more than 1,000 refugees there during the first six months of war thanks to our hosts, who have opened their homes for free or at a reduced price.
The European Commission wants to make ‘online’ tourist rental platforms more transparent. Will Airbnb take action?
The European Commission’s proposal is aligned with initiatives already in place at Airbnb. If you look at the top 200 markets in the world where Airbnb operates, 90% of them have short-term rental regulations. And we are very committed to working closely with their governments. For example, two years ago, we launched the City Portal so that governments have access to data and can address issues such as noise, nuisance, and so on. We have also worked very closely with the EU, sharing data so that regulators have complete clarity on where tourists are staying by region.
What is your view on these regulations to control the use of short-term tourist apartments in cities like Barcelona?
We respect and support cities having their own views on how they want to regulate this activity. Our position is that these regulations should be fair, proportionate and balanced. Issues like housing, affordability and mass tourism are big issues in Spain, but we also know that many people depend on this to make ends meet. We have seen many cities strike a balance and we believe it can be done. There are, of course, limits and we see ourselves as part of the solution to some of those challenges. We are working hard to develop capabilities to disperse tourism, for example.
Rental prices are particularly high because of the low supply of housing. Can the company be part of the solution?
I think what we’ve seen over the course of the pandemic and even longer ago, is that there are a lot of forces impacting housing prices. And I don’t think Airbnb is a significant driver of those changes. During the pandemic, there was a time when tourism left the cities and housing prices went up a lot for other reasons.
Airbnb is constantly renewing itself, will it be possible to book flights without leaving the platform in the short to medium term?
Not in the near future. At the beginning of the pandemic we had been working on something like that, but we didn’t have the resources at the time to pursue it or a thesis of how to differentiate ourselves in relation to flights. We realized we had to be more focused on the core business. There is still a lot of opportunity and work to do.
What about the long term?
Anything is possible. We have done a lot in a short period of time, and I am sure we will achieve much more.
“Tourism has changed forever”
What are the new trends in travel?
The pandemic increased telecommuting, which in turn drove changes in the way people travel and live. One category that has skyrocketed is long-term stays of 28 days or more. They have grown by 160% since the start of the pandemic and now account for 20% of nights booked in Europe.
Will tourism ever go back to what it was before?
No, it has changed forever. I think the most important part of the changes is this possibility of remote work that many people have now and that will continue. Which means being able to travel more spontaneously, to more places and for longer periods.
At Airbnb, offices are now optional.
It’s about having access to the best talent to be able to innovate. And they really value the opportunity to work remotely. During the course of the pandemic we have also found that you can be very productive working remotely. In fact, our most productive period was during the pandemic.
How is the company adapting to the changing trends in the tourism market?
On the one hand, we have a lot of different types of homes around the world. They are in cities and in rural areas, and there really is something different for everyone. So, as consumer behavior changed rapidly, we easily found the type of accommodation and experience that people were looking for. We have also tried to make sure that we create innovations that meet variable demand.
What have been the latest innovations?
Over the course of the pandemic we launched 150 new features for the app. And one of the most recent is a whole new way to search Airbnb. Instead of typing in a destination, you can now start searching by category of experience, such as ‘vineyards in Spain’. Also, as part of the winter launch, six new categories have been created, including my favorite, Play, so that children have recreational opportunities at each destination.
Hosts are key to Airbnb. Who are they?
The vast majority of hosts are individuals. There is a lot of interest out there and so we are now also focusing on making it easier than ever to start hosting. We have increased AirCovery insurance coverage from $1 million to $3 million and provide the support of ‘super hosts’ to guide your first steps. In addition, we allow you to choose to host guests with experience and good reviews.
Where does Spain fit into Airbnb’s business strategy?
Spain is a very popular destination within Europe, and it’s not just about the cities. It has many coasts, and we have worked very closely with the Canary Islands to attract digital nomads, for example. We are also working with local governments in Malaga, a trending and very strong destination for Airbnb, to promote telecommuting.
For the full article, please visit Diario de Ibiza website here.