COVID-19 is shedding a dim light on Airbnb's business model - Business Insider

  • 📰 BusinessInsider
  • ⏱ Reading Time:
  • 65 sec. here
  • 3 min. at publisher
  • 📊 Quality Score:
  • News: 29%
  • Publisher: 51%

United States News News

United States United States Latest News,United States United States Headlines

The coronavirus crisis has exposed a crucial weakness in Airbnb's business model and it's likely to haunt the $31 billion company's IPO plans

in the areas of the world hit hardest by the outbreak, according to AirDNA, a research firm that focuses on the short-term rental market.

That decision seemed to reflect the nature of its service. Because Airbnb sees itself as a kind of intermediary, a matchmaker of sorts, it largely allows travelers and property managers to reach their own agreements on the terms of bookings. Property manager set both their own rates and their cancellation terms. Many have set strict terms, declining to give a full refund to guests who cancel even weeks or months in advance.

Airbnb's policy change "is absolutely a step in the right direction," said Henry Harteveldt, a travel industry analyst with Atmosphere Research. "The problem is there's a staircase of steps that need to be taken, so there's still more work to be done."The problem Airbnb faces is that even this limited policy exception could cost it dearly.

But that move, collectively, will be even costlier for the property managers who list on Airbnb's service. If travelers end up cancelling a month's worth of US bookings, the owners of the rental proprieties on Airbnb would be out some $2.2 billion. It's "so much money that [Airbnb] would not be able to exist," Shatford said. "I don't think [reimbursing property owners] is a possible outcome unless they had some crazy insurance policy."

We have summarized this news so that you can read it quickly. If you are interested in the news, you can read the full text here. Read more:

 /  🏆 729. in US
 

Thank you for your comment. Your comment will be published after being reviewed.
Please try again later.

ebiitari In Trump's voice.. you are fake news! 😉

!!!!!

Good. Residential real estate should be for long term tenants at affordable prices. Not alternative hotels that drive up rental market prices.

United States United States Latest News, United States United States Headlines

Similar News:You can also read news stories similar to this one that we have collected from other news sources.

Remote-work strategies to stay productive amid the COVID-19 outbreak - Business InsiderWorking from home is not an impossible feat — and amid the coronavirus pandemic, it might be necessary. Here's how to keep 'work' and 'home' separate. (by jasonfried and dhh) jasonfried dhh Too much talk of this that doesnt relate to average worker at a Walmart or Distribution Center or Manufacturing Company.
Source: BusinessInsider - 🏆 729. / 51 Read more »

Google Bangalore employee tests positive for COVID-19: report - Business InsiderGoogle reportedly sent its Bangalore office employees home to work remotely after a worker there tested positive for COVID-19 and was put in quarantine
Source: BusinessInsider - 🏆 729. / 51 Read more »