INNOVATE 1X03 Reflection 2 (1)

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York University *

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1X03

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Management

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Apr 3, 2024

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INNOVATE 1X03: Airbnb and its Challenges during the Pandemic Airbnb is an online marketplace that connects travel with people who wish to rent out their homes as accommodation. In this podcast, Brian Chesky, the CEO of Airbnb shares with Guy Raz about how his company has adapted to the pandemic’s difficult economic times. Brian and his partners dedicated 12 years to building Airbnb but lost 80% of their income within 8 weeks of the pandemic. They experienced losing money for the first time in the 12 years that Airbnb has been open. This shows that there is no unique formula to maintaining a successful business, but as a leader, one must be decisive without sacrificing humanity. Most of the world thought a pandemic would never happen in their lifetime, but life has drastically changed within two years. There was much unknown at the time, with uncertainty on when travel would return and how fundamentally different it would look. As a travel company, Airbnb had to quickly change their business model to accommodate the changes that was brought upon by COVID-19. As a leader, Brian decided to keep morale up amongst his employees. He remained optimistic and hosted weekly Q&A sessions, so employees knew that their opinions were being heard. This displays the humanity and connection that was essential to surviving these challenging times. Due to Airbnb losing 80% of their income in a short period of time, they had to lay off 25% of their employees in May 2020. Other partners in the company advised Brian to take as little fault as possible, but he believed leaders should show empathy. He put the time into crafting a proper severance package – a transparent letter, resources for mental wellness, 14 weeks of severance pay + a week for every year at the company, with at least one year insurance

coverage. By being decisive yet compassionate, he stays connected with his employees, an essential part of being a business leader. Not only was Airbnb losing money, but their hosts that have maintained loyalty to the company were also losing money. The hosts had collectively lost $1 billion in earnings due to customers canceling bookings. Being the middleman, Airbnb had to ameliorate the situation by providing hosts about $250 million. As a sign of gratitude towards Airbnb’s company culture, Employees offered approximately $1 million of their income towards this payment. Airbnb then went on to transform their business model to adapt to the pandemic’s new environment. Since people were not flying to destination vacation locations, they promoted a new program, frontline stays, which allowed hosts to offer accommodation for a discounted price or free to COVID-19 responders. This program returned traffic towards their website and Airbnb’s brand. They also marketed bookings in remote locations, where travel was redistributed towards reconnecting with nature. This includes renting cabins, RVs, tree houses, and camping grounds. To connect this podcast with content I have learned from INNOVATE 1X03, Airbnb fulfills the levels of Maslow’s Hierarchy of Needs. Maslow studied how humans intrinsically partake in behavioral motivation. Airbnb fulfills basic needs, such as safety by providing shelter, but they also provide psychological needs. They promote friendship, intimacy, and a sense of connection. In these trying times, connection and maintaining relationships are more important than ever. Airbnb provided the opportunity for individuals to reconnect with nature, instead of air travel, people are driving 1-2 hours outside of the city to go camping. I appreciated that Brian emphasized the importance of social interaction for humans. He also demonstrated compassion by keeping morale amongst his employees within inevitable layoffs, understanding that there is no formula to lay off people. I also appreciated Guy Raz’s ability to hold a conversation. He

keeps the listener captivated by asking intriguing questions, such as whether Airbnb has considered listings for individuals quarantining because of COVID-19. Overall, I believe Airbnb’s ability to adapt due to strong leadership allowed them to survive the pandemic’s economic times. References Raz, G. (Host). (2020, August 13). How I Built Resilience: Brian Chesky of Airbnb. [Audio podcast]. In How I Built This with Guy Raz. NPR. https://www.npr.org/2020/08/12/901768355/how-i-built-resilience-brian-chesky-of-airbnb

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