How We Turned Airbnb Around

Airbnb Co-founder and CEO Brian Chesky shared some interesting points on how the company was turned around. The information gives you a direct insight into the strategies and thinking of the team at Airbnb.

Brian Chesky:

Our Q1 results are in [May 3, 2022]: 102M nights booked, $1.5B revenue (70% Y/Y), $(19)M net loss, $229M Adjusted EBITDA, $1.2B free cash flow. 2 years ago, our business dropped 80%, our IPO was put on hold, and some didn’t think we’d make it at all. Here’s how we turned Airbnb around:

First, we simplified our business. We got back to our roots, prioritizing the everyday people who host their homes and offer experiences.

We cut the vast majority of our projects, shuttered our business units, and made the painful decision to do a layoff.

We significantly improved our cost structure, decreasing our cost of revenue (merchant fees and servers), and tightly managed our fixed costs.

Next, we changed our approach to marketing. When travel stopped, we paused all performance marketing and shifted our focus to PR (there have been 1M+ stories written about Airbnb since then).

By 2021, we started investing in brand marketing again but reduced our overall marketing spend from 34% of our revenue in 2019 to 20% in 2021.

Revenue dramatically rebounded when people disproportionately started traveling closer to home, staying in Airbnbs in thousands of towns and cities.

Soon, people weren’t just traveling on Airbnb, they were living on Airbnb.

These trends continue to this day. And now, urban and cross-border travel, which were the majority of our business before the pandemic, are back to 2019 levels

In 2021, around 20% of our nights booked were for stays of a month or longer, and nearly 50% for a week or longer.

On May 11, we’ll introduce the biggest change to Airbnb in a decade.

Here’s our shareholder letter (with reconciliation of all non-GAAP numbers) for more details.

The information above is from Brian Chesky on Twitter, posted May 3, 2022.