Airbnb blurs the line between travel and life
The coronavirus pandemic has devastated Airbnb‘s (NASDAQ: ABNB) company. In the midst of a deadly virus spreading, people were reluctant to get on the plane and travel somewhere for a vacation.
The pandemic has also altered Airbnb’s business and changed the way people use the company’s services. For example, since many worked from home, they did not have to stay in one place while working. People could work in one Airbnb in Los Angeles for three months, then another in San Diego for the next two months. Changing consumer behavior blurs the line between travel and living.
Remote working gives people lifestyle flexibility
The company’s first quarter report noted that stays of 28 days or more now represent 24% of total nights booked. This was up from just 14% of nights booked before the pandemic. Commenting on the issue on the conference call following the earnings report, management said, “People don’t just travel on Airbnb, they now live on Airbnb. And these trends are not disappearing. The world will never come back on the same path. it was, and that means travel will never go back to what it was, either. ”
The ability to work remotely is fueling this change in behavior. If you no longer need to go to the same office five days a week, you are no longer stuck in one place. This is especially true for people without children in school. You can live in one place for a few weeks or a few months and then move to another place.
It will get a bit trickier over the next couple of months, as companies have started calling employees back to offices for at least part of the week. Yet, many companies have announced that remote working will be an integral part of their operations. Others prefer the complete work-from-home solution and have made it permanent.
There are several companies to choose from for those interested in the lifestyle options that work from home offers. This could create a scenario where companies that require employees to come back to the office end up losing talent to companies that allow people to work from home. Essentially, the opportunity to work from home can become a valuable advantage offered in attracting talent.
Short term pain, long term gain
Airbnb is well suited to respond to this trend. The company offers consumers a wide range of options available to suit their needs, whether it is a single room in a host’s apartment or an entire house on a beachfront property. .
This opens up a larger total addressable market for Airbnb. It may end up taking market share in the short-term house and apartment rental market. Consider a person who knows that they will be living in a particular city for a short time, say two months. It is certainly more convenient for this person to find accommodation on Airbnb than to rent a house or an apartment outright.
In the long run, the coronavirus pandemic may have improved Airbnb’s business prospects. If the substantial increase in remote working options becomes a permanent consequence of the pandemic, then Airbnb will have suffered for two years to obtain benefits that last for decades.
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