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Brian Chesky was on CNBC this week speaking about the temperature of the business, and what he has to say is quite interesting. He speaks to building the Airbnb business over 12 years only to watch it collapse in a matter of 4 to 6 weeks, but things aren’t all bad. In fact, the desire to travel, get out and away, is still very much alive and resonating within Airbnb. He has observed fundamental shifts in the business, even going to so far as to say that “travel as we knew it is never coming back.” Big words. Never is a long time, but I recently wrote an article about how travel could be impacted if deurbanization sticks, and what he’s saying runs parallel.
Personally, I think the verdict on deurbanization is still out, since much of the current flight from city centers has been from affluent households that can easily pick up and leave, or buy second homes that provide them space. But, what Chesky says speaks to a desire that may be indicative of a sentimental shift towards suburban and rural abodes in the middle, upper middle, and lower upper classes of the US. He speaks to a shift in travel demand, that people ” want to get out of the house, but they want to be safe, they don’t want to get on airplanes, they don’t want to travel for business, they don’t want to go to cities, they don’t want to cross borders, but what they are willing to do is get in a car, travel a couple hundred miles to a small community where they are willing to stay in a house.” Chesky even goes on to say that demand in May 2020 was similar to May of 2019 without any marketing ( they usually spend upwards of $1B on marketing). Many of their bookings are more than 30 days ( 20% in fact ), and they now have more hosts than prior to Covid. He thinks that travel will be redistributed across thousands of destinations, and is also hints at downsizing their corporate footprint, more remote work, etc.
This is a massive shift from the flock to urban centers and desire to travel to densely populated cities like NYC, Paris, and Hong Kong. If his observations prove to be true we could be in the nascent stages of a fundamental redistribution of the population similar to what occurred in the 1970s and 80s.
Personally, I think the desire to travel and also to live outside city centers will gain substantial traction. I also think that this isn’t a fad, and believe that it’s the start of a trend: that families will continue to choose to hop in the car, hit the road, and rent a house. Not to say there isn’t opposition to this viewpoint – I read an article earlier today published by the Journal of American Planning Association that says that people are far safer being in densely packed city centers due to better quality health centers and wider adoption of social distancing. Perhaps this is true, but I’m not sure that’s where people’s heads are at, or pointed. I think if remote working continues to gain traction, second spikes/waves occur, homeschooling persists, the desire to have more space will only increase. If an exodus creates enough inertia, the trend could result in lower tax revenue for areas that have seen a resurgence which leads to decreased funding, and that concerns me that not only would people not choose to live in a place like NYC, but perhaps also question the safety around visiting. As I said, we’re still in the very nascent stages, but Covid has been a black swan event ( as much as experts warned about pandemics it’s clear no one was really prepared ), and black swans have a way of creating new normals, trends, and travel won’t be immune.
Have a listen, it’s an interesting take.
Opinions, reviews, analyses & recommendations are the author’s alone, and have not been reviewed, endorsed or approved by any of these entities.
Chase Sapphire Preferred® Card
Welcome Offer
Earn 60,000 bonus points after you spend $4,000 on purchases in the first 3 months from account opening.
Annual Fee
$95
Points Earned
Transferrable Chase Ultimate Rewards
- 5x on all travel purchased through Chase Travel℠
- 3x on dining, including eligible delivery services for takeout & dining out
- 3x on select streaming services
- 3x on online grocery purchases
- (excluding Target, Walmart and wholesale clubs)
- $50 Annual Chase Travel Hotel Credit via Chase Travel℠
- The begins immediately for new cardmembers and after your account anniversary for existing cardmembers
- 2x on all other travel
- 10% Anniversary Bonus
- Every year you keep the card, your total spend will yield a 10% points bonus. If you spend $10k in a year, you’ll get 1k bonus points
- Chase Sapphire Preferred continues to redeem at 1.25c in the Chase Travel℠ and the slew of other benefits remain in tact including Auto Rental Collision Damage Waiver ( primary ), purchase protections, etc.
- Points are transferrable to 14 Ultimate Rewards partners
- Redeem in Chase Travel℠ for 1.25 cents per point
- No foreign transaction fees
- Suite of Travel and Purchase Coverage
- Auto Rental Collision Damage Waiver is my favorite
- Get complimentary access to DashPass which unlocks $0 delivery fees and lower service fees for a minimum of one year when you activate by December 31, 2027.
- $95 Annual Fee
We keep an up to date spreadsheet that lists the best ever offers: You can find that spreadsheet here.
Historically 80k is a very, very good offer and hit in both 2022 and 2023. In 2021, we saw the offer hit an all time high of 100k. Who knows if that will ever come back.
Main Cast:
Cards that earn flexible points and should be used on the bulk of your purchases.
Supporting Cast:
Cards that earn fixed points in the currency of the airline/hotel and can not be transferred at attractive rates. These cards yield benefits that make it worth keeping, but not necessarily worth putting a lot of your everyday spend on.
The Chase Sapphire Preferred® is exceptional starter card and offers transferrable Ultimate Rewards, and pairs well with other Chase cards.
If you carry this card alongside Chase’s cashback cards like the Chase Freedom Flex® and Chase Freedom Unlimited® or the business versions: Ink Business Cash® , Ink Business Unlimited® you can combine the points into Preferred account and transfer into hotel and airline partners
Annual fee is quite low at $95 a year + you get a 10% anniversary bonus on points + $50 hotel credit in Chase travel.
The responses below are not provided or commissioned by the bank advertiser. Responses have not been reviewed, approved, or otherwise endorsed by the bank advertiser. It is not the bank advertiser's responsibility to ensure all posts and/or questions are answered.