Airbnb is going through tough time, and here's what it's doing to overcome

Aman Jain Aman Jain Nov 07, 2019 News

Airbnb is an online marketplace where people who want to put their homes on rent meet with those looking for accommodation in that area. This online marketplace, which focuses on homestays and tourism experiences, covers over 81,000 cities in 191 countries globally.

Thanks to the unique (but robust) business model, the company has been experiencing an eye-catching growth. Last year, the company reportedly recorded a revenue growth rate of 40%. Moreover, the company is also planning for a listing in the first half of 2020, notes WSJ.

Air-bnb-image-from-pexels

However, the last few weeks have been pretty rough for the company. A Vice story last month revealed a nation-wide scam involving Airbnb. The publication claimed that Airbnb hosts put guests at inferior properties by telling them that the properties they originally booked aren’t available.

If this wasn’t enough, then the last Thursday, in a shooting incident at one of Airbnb’s rental in Orinda, California, five people lost their lives.

Additionally, in a referendum on Tuesday, the Jersey City overwhelmingly supported restrictions on short-term rentals. This could result in a massive drop in the number of properties listed on Airbnb in New Jersey’s second-largest city.

Owing to all these things, the company has been under a lot of pressure – politically, socially and financially – to take preventive measures. And, it seems, the company looks determined to do so as well.

To start with, last week, Airbnb CEO and co-founder Brian Chesky announced that they would be banning “party houses.” This is seen as a crucial step as the last week’s shooting incident took place during a 100-plus person Halloween party in Orinda.

Then on Wednesday, Airbnb announced a massive preventive measure, saying it intends to verify each and every listing on the platform by the end of the next year. It is a big task as the company is present in over 81,000 cities in 191 countries.

Chesky, in a company-wide email, said that all the properties would be verified for accuracy of address, images, listing details, amenities, cleanliness and safety. Along with verifying 100% of listings, the company announced a few more measures as well.

By next year, Airbnb plans to roll-out a “24/7 neighbor hotline” staffed by real people. The service will allow guests to contact an Airbnb employee any time from any location. Also, the company will expand the manual screening of high-risk listings worldwide next year.

Additionally, to address the scam revealed by Vice, the company plans to offer a guarantee for guests. Under this, if a property is not as described, Airbnb will first try to find the guests a new place with equal or greater value, or else make a full refund.

Chesky believes that all these measures will help build trust and ensure a “peace of mind” for the customers.

Only the time will tell whether or not such measures would help Airbnb achieve its objectives. A fact, however, is that such measures have long been overdue, considering it’s been over a decade since the company first came into existence.

Moreover, the timing of these measures – just months before when Airbnb’s is expected to file IPO – also raises a question on Airbnb’s intent.

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Aman Jain

Aman is MBA (Finance) and is currently leading VeRa FinServ, a Financial Research firm. He loves to watch science fiction movies, follow latest tech news, play video games and (ofcourse) cricket.