To survive the pandemic, Airbnb took several actions:
Balancing stakeholder interests: Airbnb faced a tension between favoring either guests or hosts. To mitigate this, they made the decision to override host cancellation policies and refund a billion dollars of reservations, even though it upset the hosts .
Raising capital: To guarantee both the guests and hosts, Airbnb raised $2 billion of straight debt, despite the high interest rates at the time .
Cutting costs and restructuring: Airbnb reduced executive pay, cut key projects, and laid off 25% of its employees. They also reduced their product line and went back to a functional organization .
Adapting to the changing demand: Airbnb modified its business strategy to focus on non-urban areas, longer stays, and larger homes. They quickly pivoted to provide housing in vacation rental communities and rural areas, which led to a rebound in bookings .
Reacting effectively to the crisis: The Airbnb team made quick decisions, acted decisively, and demonstrated empathy towards the customers. They recognized the importance of rebuilding trust and took actions to make things right with users .
These actions allowed Airbnb to navigate the pandemic, restore confidence, and ultimately become a stronger and more resilient company .