The pandemic has brought disruption in several industries, one of them being travel.
The disruption is noteworthy in the travel industry as equations of travel have being transformed. And the boundaries between travel, work, and life are beginning to blur. Now with the dust settling—it’s a bit clearer in which direction we are headed.
The ubiquitous ‘Work From Home’ has stimulated flexibility in terms of where people live or how long they stay in one place. When you typically stay 28 days or more at one location, then that certainly cannot be designated as travel.
At this point of time, 26% of Airbnb homestays business is not really traveling but living. And hence they cannot categorize themselves a travel company anymore.
Airbnb Homestays – Travel or Rental
The trend towards long-term stay at one location is reshaping Airbnb’s business. This is a far cry from what the company had planned. Folks can now plan for winter months in Miami and Aspen, while they can spend summer in New York, San Francisco, or in Long Island. There are folks who live that sort of a life.
It is those who possess deep pockets and that’s certainly not meant for the masses. You are considered to be part of an elite club when you enjoy the winter at one location and spend summer in the Alps. Now people can reduce costs by renting their homes on Airbnb when they’re away.
The possibility that Airbnb offers is to replace local marketplaces for seasonal real estate. This could turn out to be a source of passive income.
Private home rentals can offer more than what a hotel can offer to a long term traveler. You get an environment that includes privacy with inbuilt social distancing.
Airbnb Stock Rises
Airbnb is rebounded for a strong summer after the initial shock of the pandemic that wiped away 82% of its business. They have now come back strongly in the past one year and are in much better shape than most travel businesses.
After its long-awaited initial public offering in December they came back strongly and their valuation passed the $100 billion threshold pulverizing expectations. The current stock price is $134, although it soared to $219 per share in month of February. The present stock price reflects $10 dip from the initial spike.
The initial advantage they had in the past year is slowly fading as rest of the world start to find their footing post the pandemic. And it is now Airbnb has to get their act straight and lay down the turf for the people who love to travel and stay.
A Deloitte survey shows that the desire for hospitality is back. 80% of American travelers are opting for hotels. With schools returning to full strength what remains to be seen is whether the flexibility extended by large corporations will continue this year too.
Working With Cities
Airbnb has reported a 35% rise in average nightly rates year over year in the first quarter of this year. This is basically because of the popularity of large suburban homes for family reunions. This could soon flatten out as more affordable markets across the globe opens to tourism and vaccinated travelers gain confidence to explore other markets.
But it could also cause a fresh wave of tensions between Airbnb and local residents in places where the company drives second-home ownership and removes residential housing stock from the market.
Legality hurdles in global capitals had been the wet blanket for Airbnb last year, while the pandemic crushed the travel industry into oblivion.
As of now Airbnb homestays have signed agreements in more than 100 countries, cities, and municipalities. This includes the Scottish Tourism Alliance and Travel Portland – all with the intention to augment visitation.
Governments Regulate Airbnb Homestays
Tourism is a money-spinner in many regions. Governments are hence reaching out to Airbnb as they welcome their support in the tourism sector. And looking at the massive shortfall in tourism, this invitation is wind in the sail for them.
There are two sides to a coin, governments are rethinking their tourism management plans. But they are also concerned that the travel industry needs to correct unsustainable practices that existed before the pandemic struck.
Prime minister of Ireland, the New York City Council, the city of Paris and others have proposed tightening restrictions which could affect Airbnb’s bottom-line. They propose to adopt a quota system for the number of online apartment rentals in their city.
But this could prove to be a blessing in disguise as you could win over your enemies. Some of the drivers of Airbnb homestays latest enhancements include new features that complement the compliance tool that highlights regulatory policies. And this could be of use as it relays data back to the cities.
Another positive to come out is people are looking beyond metropolitan hubs – this trend kicked off due to COVID-19 and heightened social distancing requirements. Hence lesser-visited places got highlighted. And now the goal is to visit flexible destinations that offer offbeat and discrete accommodations such as treehouses and yurts. People aren’t visiting same hangouts even if they love it, but prefer investing in newer locales.
A Long-Haul Vision for Remote Work
A lot of Airbnb homestays success in the future rides on remote work continuing after the pandemic subsides. Airbnb looks beyond the traditional idea of leisure and business travel as its byword for the future.
New features such as Flexible Dates helps users find availability in trendy homes on alternate dates. These are predicated on the prolongation of working from home. Airbnb homestays new focus is on relocation assistance.
This year the firm has been helping customers experience a new home in town before committing to it. For this they have partnered with corporate-relocation companies in several cities in the U.S and offer discounts on home rentals.
So you might ask what if work from home life doesn’t play out? It wouldn’t be long – give or take two to three years, firms that insist on working physically at a location – may not be around in the future. Soon young, energetic, digitally driven managers not limited by restrictions of legacy workplaces, will cause firms to rethink their policies.
Airbnb Homestays Conclusion
Conversely, fully remote companies will want to meet up for key decision making situations. This will define business travel where employees working remotely will visit office for a week at a time during key financial planning season or whatever.
Airbnb isn’t the only firm gung-ho predicting this, even Executive VP of product and strategy for American Express Global Business Travel, feels the same.
The days of getting on the next flight for a meeting are gone. In their place is an opportunity for long-term stays. Ultimately it will get bullish: Companies aren’t going to determine this—employees will.