A flat in Milan near Corso Buenos Aires for 30 euros a night on 19 March instead of the normal price of around a hundred euros, another flat for 72 euros near the Grand-Place of Brussels on the same dates... Bargains are jostling for position on the Airbnb. The coronavirus effect is not only reflected in the prices that landlords are offering, but also in the activities of the largest flat rental platform in the world (over seven million to date).
The market for very short-term shared-economy flat rentals has soared over the last five years. According to a survey by DBS Bank, in 2018 this market represented more than $50 billion in North America29 billion in Europe and $7 billion in Asia. The pandemic will bring it to a screeching halt this year, as the coronavirus is closing dozens of destinations to travellers, causing demand to collapse. And adding further worries for Airbnb.
The company has already lost 322 million in the first three quarters of 2019, compared with a profit of $200 million in the same period last year, with costs rising faster than revenues in its third quarter. The coronavirus is therefore expected to weigh even more heavily in 2020, pushing back the timetable for its initial public offering scheduled for the second quarter of this year.
At the beginning of February, for example, Airbnb officially stopped offering flat rentals on its site for Beijing - a measure that has been extended until the end of April. Although some rentals still appear on the Airbnb website, they have in fact been validated by the Chinese government because they are generally part of hotel residences, open to the few visitors still travelling to the country.
Europe is also likely to see a sharp fall as a result of the spread of the coronavirus, particularly in the most popular urban destinations where demand for flats was also high. dependent on conferences and trade fairs. In the coming weeks, it is unlikely that flat owners in Barcelona, Düsseldorf - in the heart of the German Land most affected by the coronavirus - Milan, Paris or Zurich will be able to do good business. There are as yet no figures on the impact, but it is likely that demand will fall by at least 30% in Europe as a whole, and by more than 50% in the regions worst affected, such as Milan, Venice and North Rhine-Westphalia... And so much less money for Airbnb, which takes a commission of 15% on rentals from owners. And if there are takers, the fall in prices automatically translates into lower revenue.
Airbnb had to show flexibility to owners registered on its exchange platform and to travellers. As indicated on its website, the online apartment-sharing application has adapted its cancellation policywhich is generally rather restrictive.
So, in response to the restrictions imposed by governments in view of the epidemic, Airbnb has extended what it calls its "policy of extenuating circumstances which allows guests and flat owners to cancel a reservation free of charge. This policy is regularly updated and takes into account the guidelines and recommendations of the World Health Organisation (WHO) and government and health authorities. The application publishes all the links for keeping up to date with developments in the health situation and related restrictions.
Here, for example, are the rules as of 6 March for bookings to Italy. Travellers heading for Lombardy, Veneto and Emilia Romagna and property owners in these three regions can invoke the "extenuating circumstances" clause for any bookings made before or on 29 February for stays in March. The same rules apply to travellers from the three regions listed by Airbnb. This provision has since been extended to the whole of Italy following the introduction of the quarantine across the country.
