Airbnb CEO Brian Chesky on leading through the COVID-19 crisis

Executive overview

When COVID-19 hit, Airbnb was weeks from filing its IPO S1. Within days, a billion dollars in guest cancellations needed resolving, hosts lost their income overnight, and every stakeholder needed a response simultaneously.

Chesky's framework: write down all stakeholders, identify their needs, prioritise by principles — not by financial models. The company acted fast across guests, hosts, employees, communities, and shareholders in sequence.

Crisis strips away complexity and forces you back to what actually matters.

The moment everything broke

• Airbnb was mid-IPO preparation when COVID escalated from a China signal to a global shutdown in one week
• Previous crises (2008 recession, post-9/11) were isolated; this time every part of the business failed simultaneously
• Weekly escalation: first resembled 9/11 (travel down 25%), then the Great Recession, then something unprecedented
• Chesky's first move: breathe, then ask "how do I want to be remembered in this crisis?"

Responding to each stakeholder

• Guests: Issued extenuating circumstance policy — full refunds for all COVID-related cancellations, overriding host cancellation terms
• Hosts: $250 million from Airbnb's own balance sheet paid to hosts as partial compensation for lost cancellations
• Employees: Donated $1 million in travel credits to hosts; Chesky and co-founders matched with $9 million, creating a $10 million Superhost Relief Fund (later raised to $17 million)
• Communities: Launched Frontline Stays — committed 100,000 free or discounted places for healthcare workers; grew to 140,000 in 2.5 weeks
• Shareholders: Cut $800 million marketing budget, executives moved to half pay, founders took no salary, froze hiring, raised $1 billion from Silver Lake and Sixth Street

Decision-making under pressure

• No clean plan existed — the old plan became irrelevant overnight
• Process: list all stakeholders → identify needs → set principles → act one step at a time
• Principles used: be decisive, care for stakeholders, do more than expected, be nimble, pivot toward where the world is going
• The extenuating circumstance policy angered hosts who had flexible terms; Chesky acknowledged the mistake publicly on a host webcast
• Raised $1 billion assuming worst case: a multi-year downturn with double-digit unemployment

Constraints as a forcing function

• Airbnb had been free cash flow positive since 2016 despite not being EBITDA profitable
• Large budgets erode scrappiness — tasks that once cost nothing ballooned to $100,000 or $1 million
• Crisis reimposed constraints and restored the founding mindset
• Chesky framed the moment to employees as "a new founding chapter"

Where travel goes next

• First wave of recovery: short-haul trips under 300 miles
• Second: affordable, budget-friendly options during recession
• Third: longer-term and monthly stays as remote work decouples people from fixed cities
• Fourth: local experiences (online experiences launched in 14 days; five Olympians among early hosts)
• Business travel will shrink; leisure travel will rebound stronger — the inverse of pre-pandemic patterns

Why Airbnb's model is structurally resilient

• 70% of hosts already offered flexible cancellation terms
• Unlike hotels, which must close below ~30% occupancy, Airbnb listings carry near-zero fixed cost to maintain
• Economic downturns create new hosts — people need income, and Airbnb is a low-barrier entry point
• Hosts have collectively earned $100 billion on the platform across 750 million guest stays

Trust and cleanliness in a post-COVID world

• Traditional hospitality removed people to create consistency; Airbnb's approach: verify and trust the people instead
• Three-step plan: educate hosts on cleanliness standards → ask guests in reviews whether standards were met → verify listings against a cleanliness benchmark
• As of 31 March 2020, 94% of guests gave four or five stars for cleanliness

Leading through prolonged uncertainty

• Chesky ran weekly Thursday all-hands from his desk, answering every employee question with full honesty
• Balanced two signals deliberately: accurate pessimism about severity, and genuine optimism about outcome
• Leaders' emotions are contagious — projecting panic amplifies it; projecting grounded optimism stabilises the team
• Personal reset: daily walks, cycling empty San Francisco streets, prioritising calls with energy-giving people over passive screen time
• Crisis provided personal clarity: Airbnb's core purpose is human connection, not real estate or transactional travel