There's also going to be a lot of pent-up demand from people who didn't lose jobs and had no outlet for leisure spending during the quarantine. I'm not sure which will win out.
It doesn't even have to be global, just a regional second wave in a tourist hot spot could crush tourism globally.
[0] https://www.morganstanley.com/ideas/coronavirus-peak-recover...
I beg to differ:
"Through the success of the global eradication campaign, smallpox was finally pushed back to the horn of Africa and then to a single last natural case, which occurred in Somalia in 1977. A fatal laboratory-acquired case occurred in the United Kingdom in 1978. The global eradication of smallpox was certified, based on intense verification activities in countries, by a commission of eminent scientists in December 1979 and subsequently endorsed by the World Health Assembly in 1980." (from https://web.archive.org/web/20070921235036/http://www.who.in... )
The Wikipedia page starts with "Smallpox was an infectious disease". I believe this is one of the most powerful sentences I've ever read on the Internet, and it gives me so much hope for what we can achieve.
https://en.wikipedia.org/wiki/Smallpox_virus_retention_contr...
> The debate centers on whether or not the last two remnants of the virus known to cause smallpox, which are kept in tightly controlled government laboratories in the United States and Russia, should finally and irreversibly be destroyed.
Just because you still have a job in May doesn't mean you'll still have one in August.
But I think that if the leisure travel collapses it would be because of the economic declines, not medical risks. My 2c.
There are obviously other factors contributing to that other than the lack of travel, but this is not proving that sales will be fine without travel.
For us the experience is the opposite!
People will be more willing to stay at a hotel where at least some level of cleaning is guaranteed/expected.
In Airbnb, and I have no such guarantees and no idea who stayed at the property before me.
It's not like people are going to be showing up at airports overnight buying flights for the same day.
Some economists are hoping for a better outcome than this of course, but you can connect the dots and see what people are planning for, as you've done here. Airbnb is not alone in planning for depression, and the travel industry will be worse than most.
Also, it would be remiss of me not to point out that the markets != the real economy. They are correlated, but that correlation is not perfect. 20M newly unemployed Americans would disagree with you that things are largely unchanged from 3 months ago.
You need to operate the company under the assumption that this will happen for a very long time, and that even afterwards people will think about travel differently
If you accept that scenario your decisions in the present about finances, investments, and employment all radically shift. My decisions have radically shifted to accommodate even though I have two essential industry employers with virtually no risk of being laid off.
What I personally use as a thermostat on how to proceed during adjusted life is the military. How they conduct business is bound by finances not beholden to a profit stream and they do not conduct business out of political ideals/favors. When they lift travel restrictions I will feel more confident about traveling. Once they reopen schools I will more confident about going back to work in an office building. When they drop the need for face masks or mandatory forced quarantine I will feel more confident stepping away from social distancing. Until those things happen I will continue to play it highly conservative in accordance with the suggested medical guidance to avoid exposure.
You also have the case that like stock prices employee hiring is often based on projections for anticipated need in a high-growth business - it's such a friction point, you are trying to stay ahead of the curve to build the capacity to grow now and handle that growth 12 months from now
Either way, it's a good package, since most people are getting zilch at other places.
Note that '100%' includes the growth prospects that Airbnb still had in January 2020. 'startups' like airbnb hire for growth. 25% workforce cut is roughly the growth prospects (20-30% per year) that airbnb had last year.
So no, that recovery won't come in just a few short months. For one because there's still a global pandemic related global lockdown. Second, because an effectively rolled-out vaccine is not expected until at least next year. Third because tourism is hardest hit in a normal economic crisis, in a recession and 20% unemployment figures like now, the first thing you stop doing is taking international trips for fun. Fourth because in a virus pandemic, tourism (concentrated populations gathering in hotspots like a museum, bus, airplane etc, and transporting the virus across borders) is a high-risk activity that gets restricted way more than other economic sectors like farming, manufacturing, or work from home office jobs. Fifth because most of airbnb's stock is caught up in one of two categories: people renting out their home when they're away on vacation, these people are staying home and aren't making their real estate available. Or professional airbnb companies which purchased real estate that's only economic with large revenues, financed with leveraged mortgages, many of these companies are set to collapse in a 3-month shutdown, let alone a 6-month low-activity industry. A lot of these will be folding and selling their properties. Both the demand side and supply side is going to take a hit, airbnb will run much less business for the next year at least and will need to bounce back. It won't be easy. Especially in an industry where you'll see dirt-cheap hotel prices competing for a few years.
I wonder how this is or will impact the real-estate market? Are enough people going to foreclose without interested buyers that the market takes a plunge?
These highly-leveraged "new" companies and individuals make up only a portion of AirBnB-rented homes, which themselves are only a small portion of the entire housing market. There was a very recent interview or article with AirBnB's CEO where he (I'm sure he was fudging the numbers a bit) said only 1/3 of AirBNB homes are actually owned by these kinds of speculative home-buyers. The remaining 2/3 are split evenly between traditional real estate leasing companies and homeowners with only 1 house.
Also, worth considering that short-term rentals can easily be transformed back into long-term rentals. In any case, I think a national housing market plunge is highly unlikely.
That's what AirBnb very much likes you to believe. In my opinion they lie a lot.
> which themselves are only a small portion of the entire housing market.
That really depends on the city. Barcelona, Amsterdam, Prague and other cities were literally killed by AirBnb and by extension by AirBnb slumlords.
> Also, worth considering that short-term rentals can easily be transformed back into long-term rentals.
That maybe true. Then again, if you max out your credit card to speculate on highly leveraged financial products the time window for clean-up may be very short and you may be forced to sell at a very bad price.
I, for one, are really not sorry for this bunch of city killing assholes. For short term financial gains they make life miserable for everybody else.
In reality, a typical person (like me) would rent out their space about 10 days a year, while an airbnb company aims for 365. Could very well be that 2/3rd of listings are average-joes and 1/3rd are professional.
But in terms of nightly stays, it could still be about 20 professional to 1 average-joe. And those nightly stays ultimately reflect the revenue that drives the economics of these properties, airbnb's business and the impact on the local market.
If you bring cleaning supplies and just wipe down high-contact areas like counters, doorknobs, refrigerator handle, etc. when you arrive, it doesn't really seem any more risky than something like bringing in groceries from the grocery store, which may have been touched by other people, the cashier, etc. Or to be extremely cautious, you could pay for an extra 3 days prior to arriving to make sure nobody has touched anything in that time. If you're gonna be there a full month anyway, what's another 3 days added on to the cost.
The whole industry is fucked and it will probably kill some countries too, a lot have a massive, unhealthy dependency on tourism.
Airbnb are going to have issues, as the longer this drags on, the more landlords are going to be forced to sell or commit to long-term rentals, limiting the number of eligible places, even if there is some later snap-back (due to say a very effective vaccine).
Because if they believed things would start to recover by fall, wouldn't you just pay the people as normal and make a judgement call around then? You're spending the payroll money either way -- 14 weeks of severance and people stop working immediately, or 14 weeks of payroll and people are still working.