In early 2020, the travel industry came to a screeching halt. Flights were grounded, cities went into lockdown, and tourism disappeared almost overnight. This was nothing short of catastrophic for Airbnb, a company built entirely around people staying in other people’s homes,

The company’s revenue plummeted by over 80% in just eight weeks, and Airbnb found itself hemorrhaging around $250 million per month. Yet, remarkably, less than a year later, Airbnb launched one of the most successful tech IPOs of the decade, closing its first trading day with a market cap of over $100 billion.

So, how did Brian Chesky, Airbnb’s co-founder and CEO, lead the company through one of the greatest business disruptions of our time? And what can founders learn from his playbook for navigating a crisis?

Let’s unpack the key decisions, leadership traits, and crisis strategies that helped Airbnb turn one of its darkest chapters into a defining moment of resilience.

The Pre-COVID Rise of Airbnb

To fully appreciate the magnitude of Airbnb’s turnaround, it’s worth revisiting just how fast the company had been growing pre-COVID. Founded in 2008, Airbnb turned a simple idea, renting air mattresses to strangers, into a global phenomenon.

By 2019, Airbnb was in over 100,000 cities across the globe, had more than 7 million listings, and was preparing for a long-anticipated IPO. Revenues were in the billions, and the brand was among the most recognized in tech.

But the company’s rapid growth also meant it was burning significant cash, spending heavily on expansion, hiring, and ambitious side projects, including luxury rentals, transportation, and even original media content.

So, when COVID-19 hit, Airbnb wasn’t just vulnerable—it was exposed.

The Pandemic Fallout

In March 2020, the World Health Organization declared COVID-19 a global pandemic. Within days, Airbnb’s bookings dropped off a cliff. Travel bans and lockdowns around the world meant the core of the company’s business had vanished.

Airbnb was spending more money than it was making. For a business with high fixed costs and thousands of employees, the financial model quickly became unsustainable.

“It felt like I was the captain of a ship that was hit by a torpedo,” Chesky told McKinsey. “All revenue disappeared in a matter of weeks.”

With a burn rate of $250 million per month, Chesky and his leadership team had to act fast.

Step One: Radical Focus

The first thing Chesky did was refocus the company on its core mission.

Over the years, Airbnb has expanded into multiple business lines—Airbnb Luxe, business travel, and even airline partnerships. But in crisis, clarity matters more than creativity.

“We realized that we had gotten away from the roots of the company,” Chesky said in an interview with Stanford Graduate School of Business. “So we made the decision to get back to basics.”

Projects that were not directly related to Airbnb’s core home-sharing model were either paused or cut entirely. This freed up resources and helped the company concentrate on what mattered most: supporting hosts and guests.

Step Two: Compassionate Layoffs

One of the most defining moments of Airbnb’s crisis response came in May 2020, when the company laid off 1,900 employees—about 25% of its workforce.

Layoffs are always difficult, but Chesky’s approach was widely praised for its transparency and empathy. He wrote an open letter explaining the rationale, the criteria used to make decisions, and the steps being taken to help those affected.

Laid-off employees were offered 14 weeks of severance, extended healthcare, and job placement assistance. The company even built a public-facing directory of employees who had been let go to help them find new work.

“A company is ultimately a collection of people,” Chesky said. “How we treat people during this time will define us.”

For founders, the lesson is clear: Even in crisis, humanity matters. The way you lead during the hard times shapes your brand, your culture, and your legacy.

Step Three: Supporting Hosts

Another crucial part of Airbnb’s turnaround was how it treated its hosts. After canceling millions of bookings, hosts were understandably upset—many had lost significant income.

Rather than ignoring the issue, Airbnb took responsibility. The company created a $250 million fund to help cover canceled bookings and a separate $10 million Superhost Relief Fund to support top-performing hosts in financial distress.

This move wasn’t just about goodwill—it was about survival. Airbnb’s hosts are the backbone of its business model. By supporting them during a crisis, Airbnb ensured loyalty and maintained its network for the eventual rebound.

Step Four: Reimagining the Product

While international travel was still off the table, Chesky noticed something interesting: people were booking local stays, within driving distance of their homes. Airbnb leaned into this trend.

The company quickly adapted its product offerings to reflect the new reality:

• Enhanced safety protocols for COVID cleaning.
  
• Flexible booking policies for guests uncertain about future plans.
  
• New marketing campaigns focused on local travel and long-term stays.
  

Chesky even talked about how remote work would reshape travel in the long run. With people no longer tied to offices, Airbnb began positioning itself as a platform not just for vacations, but for working from anywhere.

This adaptability, listening to user behavior, and evolving quickly is something every founder should bake into their crisis playbook.

Step Five: Mental Fortitude and Founder Psychology

Perhaps one of the most underappreciated leadership qualities Chesky displayed during the crisis was psychological resilience.

“The hardest part of being a CEO is managing your own psychology,” Chesky said. “If you lose your cool, everyone around you feels it.”

In times of crisis, employees look to leaders for emotional signals. Chesky’s ability to remain calm, vulnerable, and hopeful gave his team the stability and clarity they needed to keep going.

He also leaned on mentors like Warren Buffett and Barack Obama, seeking advice on decision-making, communication, and purpose.

This willingness to learn and seek outside perspectives, especially during chaos, is a vital trait for any founder.

The Comeback and IPO

By the second half of 2020, Airbnb had stabilized. Bookings started to rebound, driven by domestic travel and long-term stays. The company’s focus, agility, and empathy had paid off.

In December 2020, Airbnb went public. On its first day of trading, its stock price more than doubled, giving the company a market cap of over $100 billion, more than Marriott, Hilton, and Hyatt combined.

It was one of the most surprising and inspiring IPOs of the pandemic era.

“2020 was the most defining year in Airbnb’s history,” Chesky said. “We were tested in every way—and we came out stronger.”

Key Takeaways for Founders

Airbnb’s COVID-19 journey offers a blueprint for navigating crisis. Here are six key lessons every entrepreneur should remember:

1. Get back to your core. In chaos, clarity is power. Focus on what your company does best.
   
   
2. Act quickly and decisively. Speed is essential in crisis. Don’t wait for perfect information—make the best decisions with what you know.
   
   
3. Lead with empathy. How you treat people during a downturn defines your culture and your brand.
   
   
4. Listen to your users. Trends and behaviors change fast. Stay close to your customers and adapt your product accordingly.
   
   
5. Take care of your team’s mental health and your own. A founder’s mindset is contagious. Stay calm, be human, and seek support when needed.
   
   
6. Use the crisis as a catalyst. Often, constraints force clarity. Use hard times to reshape your business into something stronger.

Conclusion

Crisis doesn’t create character—it reveals it. Brian Chesky’s leadership through the COVID-19 pandemic showed that even when the odds seem insurmountable, thoughtful decisions, empathy, and mental resilience can carry a company through the storm.

For founders and entrepreneurs navigating uncertain times, Airbnb’s story is not just an inspiring turnaround—it’s a masterclass in modern crisis leadership.

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