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  • May 2021 (Revised August 2021)
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Airbnb During the Pandemic: Stakeholder Capitalism Faces a Critical Test

By: Benjamin C. Esty and Allison Ciechanover
  • Format:Print
  • | Language:English
  • | Pages:28
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Abstract

As the COVID pandemic spread in early 2020, global travel ground to a halt. For Airbnb, the San Francisco-based platform for renting accommodations, the impact was both swift and severe as revenues plummeted more than 70% over the prior year. Responding to the sudden downturn was a challenge for CEO Brian Chesky and his leadership team because the firm had adopted a stakeholder model with five key constituents: guests (renters), hosts (landlords), employees, communities and shareholders. While all five groups could benefit in the long-term if the firm succeeded, it was less clear how they should balance the potentially conflicting demands in the short-term particularly given the mounting losses. For example, in the face of travel restrictions, Airbnb could support guests by requiring hosts to refund deposits or could support hosts by allowing them to keep deposits. Similarly, should Airbnb use existing cash to maintain employment levels or downsize to protect capital providers? In the highly uncertain environment that existed in April 2020, Chesky and his team had to make many critical decisions with little precedent and limited information to guide them. As one of the first Silicon Valley "unicorns" to adopt a stakeholder business model, the world would be watching to see what they did, how they did it, and why.

Keywords

COVID-19 Pandemic; Business and Stakeholder Relations; Corporate Governance; Crisis Management; Leadership; Digital Platforms; Corporate Social Responsibility and Impact; Mission and Purpose; Value Creation; Decision Making; Goals and Objectives; Cross-Cultural and Cross-Border Issues; Travel Industry; Tourism Industry; Service Industry; United States

Citation

Esty, Benjamin C., and Allison Ciechanover. "Airbnb During the Pandemic: Stakeholder Capitalism Faces a Critical Test." Harvard Business School Case 221-050, May 2021. (Revised August 2021.)
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About The Author

Benjamin C. Esty

Finance
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Related Work

    • July 2021 (Revised August 2021)
    • Faculty Research

    Airbnb Emerges from the Pandemic: Lessons for Stakeholder Governance (B)

    By: Benjamin C. Esty and Allison M. Ciechanover
    • May 2021 (Revised August 2021)
    • Faculty Research

    Airbnb During the Pandemic: Stakeholder Capitalism Faces a Critical Test

    By: Benjamin C. Esty and Allison Ciechanover
Related Work
  • Airbnb Emerges from the Pandemic: Lessons for Stakeholder Governance (B) By: Benjamin C. Esty and Allison M. Ciechanover
  • Airbnb During the Pandemic: Stakeholder Capitalism Faces a Critical Test By: Benjamin C. Esty and Allison Ciechanover
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