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  • Writer's pictureMarc Pulisci

What's Up With Airbnb This New Normal?

This is an article “What's Up With Airbnb This New Normal?” by Marc Pulisci.

Most 2020 travel plans were cancelled no thanks to COVID-19—but not all. While home-sharing platforms like Airbnb had to make changes to keep the pandemic from further hurting an already battered industry, not all remained grim as tourism everywhere slowly opened up and people started seeking social distancing refuges far away from their homes to also curb the hunger for travel.

What's Up With Airbnb This New Normal

By mid-2020, home rentals became the new normal for travelers with global markets indicating a steady performance of short-term rentals as compared to hotel bookings. This, even though daily rates for homes with wider spaces have increased from an average of $300 to $323 per day. Nonetheless, current government guidelines everywhere still hurt the vacation rental industry bad with occupancies falling to as low as 36%.

Addressing the new normal

For popular home-sharing platform Airbnb, listings in over 220 countries enabled them to remain afloat with 7 million active listings on the market. This, despite having had to lay off 25% of their workforce while providing quite an attractive severance package (three months pay and a year’s worth of healthcare), and suffering a 20% drop in occupancy rates in larger markets.

Thanks to how the platform explored new ventures such as transportation and entertainment, its move to go public and somehow rebound from a huge drop in its valuation (from $31 billion to $18 billion), seems to be within reach even if various challenges in the industry are still around the corner.

Airbnb CEO Brian Chesky acknowledges how the new normal has changed the behavior and manner people want to travel. There are less plane flights today due to the pandemic and avoiding crowds seems to be the best way to go when you’re out of the house. But Chesky’s insight is spot on when he said that people still do want to go out.

Right now, the question is how can Airbnb transform new normal environments into the travel lifestyle we were all accustomed to. The short answer is by prioritizing safety first.

Recently, Airbnb has established guest control in having safer environments during the pandemic. Home-rentals were required to provide kitchens for guests so they won’t have to go out to restaurants, enhanced cleaning guidelines, and a 72-hour vacancy window option for owners prior to the next check-in. By recognizing these new conditions of travel, travelers felt more secured and continued to book their travels via the platform.

Mitigating overtourism

Chesky is confident that people will be itching to travel and would create a massive influx of tourists for their listings once everything goes back to normal. In the meantime, Airbnb chooses to conform with the inconveniences of the times and recognize a culture of nomadism that’s emerging over the course of the health crisis. Today, the average stay has increased by over 50% or exceeding four days with each booking particularly during the fall.

Across the country, the hospitality platform enjoyed twice the number of its bookings in less populated areas than in urban areas during the Labor Day Weekend. On the other hand, this further amplified the issue of overtourism---one which is not at all very welcome these days and which many claim Airbnb has made worse by continually supplying to its rising demands.

In the platform’s defense, Chesky believes that the disruption that COVID-19 had made will steer them in their original track of redistributing tourism to other destinations other than the usual favorites like Palm Springs or Hilton Head Island, and somehow disperse nomads to avoid overtourism.

With the disruption, a few local governments have also placed rental restrictions or have imposed long-term rental policies particularly in Hawaii, Lisbon, and Dublin to prevent overtourism once the industry fires up again.

To complement such policies, Airbnb has introduced its City Portal to enhance the local government’s regulations on its listed properties and increase compliance for a better travel scenario once travel gates start to open everywhere for the next normal.

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