Airbnb received a $1 billion investment from private equity firms Silver Lake and Sixth Street Partners amid a pandemic. And this happens at a time when reservations dropped 50% or more in some U.S. urban markets. So how in the world did this happen?
Customer centricity, that’s how.
You might have read our post about VRBO’s massive blunder, where they are refusing to enforce full refunds on trips people cancel because they’re literally not supposed to leave their house. Big yikes.
So Airbnb pretty much did the opposite. Not only did they loosen cancellation policies to accommodate guests who are already bummed that they had to cancel their trips, but they also set aside $250 million to provide hosts 25% of their lost revenue to keep them afloat. Though they initially prioritized helping guests, they circled back and made this decision to help hosts who are put in a tough situation as well.
To afford these measures, they made the bold move of canceling their 2020 marketing, saving them $800 million.
When compared to the massive mistake made by VRBO, Airbnb has clearly learned what not to do. Though they are still struggling through this time and may continue to struggle for a while after, it’s clear that being customer-centric pays off. And not just in terms of customer sentiment, but also investors. Investors want to be sure that they’re hopping in with a company that prioritizes long-term customer relationships over short term financial gains.
Not bad, Airbnb, not bad.
Lots of companies are doing tons of good things in the pandemic, and a lot are completely blowing their chance of surviving once this passes. Check out our blog post where we assess how companies are responding in this crucial time.
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Hannah Michelle Lambert is the Digital Marketer at Worthix, as well as the host of the monthly CX News Recap segment. She is a graduate of the University of Michigan.