How Airbnb Survived COVID: The Human Reset
Brian Chesky and the Crisis That Changed Everything In March 2020, Brian Chesky’s company was hit by what he
Brian Chesky and the Crisis That Changed Everything
In March 2020, Brian Chesky’s company was hit by what he called “a torpedo”. Within eight weeks, Airbnb lost 80% of its business. The company he and his co-founders had spent 12 years building nearly disappeared in a matter of weeks. How Airbnb survived COVID became a story not just of financial resilience, but of returning to core human values.
“It took me 12 years (me and my partners) to build this business, and we lost most of it in four or five weeks,” Chesky told Fortune magazine in June 2020. At the end of March, he was reading stories questioning whether Airbnb would even exist.
The Impossible Choice
When the World Health Organisation declared a pandemic on 11 March, Chesky faced a difficult choice. If he allowed guests to cancel bookings and receive full refunds, it would devastate hosts’ livelihoods. But he couldn’t have guests and hosts feeling pressured to put themselves in unsafe situations during a public health crisis.
He decided to allow full refunds, including all Airbnb fees. But there was a problem. He made the decision without consulting hosts first.
The backlash was immediate and fierce.
The Apology
On 30 March 2020, Chesky did something unusual for a tech CEO. He wrote a personal letter to hosts that opened with honesty rather than corporate speak.
“Dear Host, What a devastating couple of months this has been for all of us,” he began. He admitted the mistake directly: “I’m sorry that we communicated this decision to guests without consulting you, like partners should. We have heard from you and we know we could have been better partners.”
It wasn’t just words. The letter announced a $250 million package to pay hosts 25% of what they would have received through their cancellation policies for COVID-related cancellations between March and May. Airbnb covered the entire cost.
Chesky and his co-founders Joe Gebbia and Nate Blecharczyk also announced a $10 million Superhost Relief Fund. Airbnb employees started it with $1 million from their own pockets. The three founders contributed the remaining $9 million personally. The grants, up to $5,000 each, didn’t need to be repaid.
The Brutal Numbers
By May 2020, the reality became clearer. Airbnb’s revenue for the year would be less than half of what it earned in 2019. The company had raised $2 billion in capital and cut costs across the board. But it wasn’t enough.
On 5 May, Chesky sent another letter to staff. This time, he had to announce that 1,900 employees (25% of the workforce) would be laid off.
Dignity in Dismissal
What happened next became a defining moment in how Airbnb survived COVID. Rather than the cold, impersonal layoffs that have become standard in tech, he tried something different.
In the US and Canada, each departing employee received a one-to-one meeting with a senior leader. The letter explained the decision-making process in detail. It included the principles that guided the process: mapping reductions to future strategy, doing as much as possible for those affected, maintaining commitment to diversity, and focusing on personal communication.
The severance package was generous. Employees received 14 weeks of base pay plus one additional week for every year at Airbnb. The company dropped the one-year cliff on equity so everyone leaving became a shareholder, regardless of how long they had worked there. In the US, Airbnb covered 12 months of health insurance. In other countries, coverage ran through the end of 2020.
Perhaps most unusually, the company created an Alumni Talent Directory. This was a public website to help departing employees find new jobs. A large portion of Airbnb’s recruiting team became an Alumni Placement Team for the rest of 2020. Departing employees got four months of career services and kept their Apple laptops.
“We have great people leaving Airbnb, and other companies will be lucky to have them,” Chesky wrote.
Back to Belonging
The crisis forced Chesky to confront what Airbnb was really about. “When we started Airbnb, it was about belonging and connection,” he wrote in the layoff letter. “This crisis has sharpened our focus to get back to our roots, back to the basics, back to what is truly special about Airbnb: everyday people who host their homes and offer experiences.”
The company paused efforts in transportation and Airbnb Studios. It scaled back investments in hotels and luxury offerings. It returned to its core: the host community. This refocusing proved essential to how Airbnb survived COVID.
During the pandemic, over 40,000 hosts volunteered to provide free or subsidised housing for more than 100,000 healthcare providers, relief workers, and first responders. Trust, Chesky argued, is “the foundation of a partnership, and it is built over time.”
The Letter’s Legacy
Fortune magazine later compared Chesky’s approach with the layoffs at Meta and Twitter. “Allow people to leave the company with dignity,” became the headline in November 2022, when other tech giants were conducting mass redundancies with far less humanity.
By December 2020, Airbnb went public in one of the year’s most successful IPOs. The company was valued at around $100 billion. At the crisis peak, the company had been burning through $250 million monthly. It survived not by abandoning its values, but by returning to them.
Understanding how Airbnb survived COVID means recognising that Chesky’s letters weren’t marketing exercises. They were admissions of mistakes, apologies for failures, and commitments to do better. In an industry that often values growth above everything else, he chose empathy.
“Our mission is not merely about travel,” he wrote to staff. “When we started Airbnb, our original tagline was, ‘Travel like a human.’ The human part was always more important than the travel part. What we are about is belonging, and at the centre of belonging is love.”
For a company that had lost 80% of its business in weeks, it was that focus on the human part (not just the travel part) that brought it back.
Sources
- Stanford Graduate School of Business – “Brian Chesky on Managing Through Crisis and Uncertainty”
- McKinsey & Company (23 July 2021) – “The 21st-century corporation: A conversation with Brian Chesky of Airbnb”
- Airbnb Newsroom (5 May 2020) – “A Message from Co-Founder and CEO Brian Chesky”
- Airbnb Newsroom (30 March 2020) – “A Letter to Hosts”
- Fortune (30 June 2020) – “Airbnb CEO Brian Chesky says bookings are bouncing back amid the pandemic”
- TechCrunch (30 March 2020) – “Airbnb will pay hosts $250 million to help cover cancellations due to COVID-19”
- Yahoo Finance (18 November 2022) – “‘Allow people to leave the company with dignity’: How Airbnb CEO’s pandemic layoffs stand in stark contrast to Meta and Twitter”
