Once upon a time—the ancient era of, oh, the mid-aughts—“B&B” meant “bed and breakfast.” Chintz curtains and overstuffed wing chairs, a creaky Victorian manse reworked into a tiny hotel. Then in summer 2008, two entrepreneurs launched a website called Airbedandbreakfast for the Democratic National Convention in Denver. The site sold extra bedrooms to attendees locked out of fully booked hotels, an auspicious start for what became Airbnb.
Airbnb came to define the twenty-first century vacation—right up until Covid-19. But six months after Airbnb hosts faced possible ruin, they may suddenly be the lucky ones.
Vacation properties are nothing new; Vacation Rentals by Owner, or VRBO, dates back to 1995, and Hollywood has long dramatized the high jinks (or horror) of the cabin rental. But Airbnb quickly became shorthand for a certain kind of DIY vacation. It was blamed for jacking up housing costs in popular vacation spots—including Seattle—when owners realized they could make more as ersatz hoteliers than long-lease landlords.
The bed and breakfast model, in which proprietors shared their living space with a guest, became less common. By 2019, Airbnb had properties in 191 countries and more than 600 million bookings, including a bed in a Goodyear blimp and a maharaja’s palace (just $8,000 a night!).
Airbnb hosts juggling multiple properties became common. Expedia account executive Jessica Haupert manages two: a detached guest studio behind her South Seattle home and a three-bedroom vacation house in touristy Leavenworth. For the last few years, they were both booked almost solid. “A huge success,” she says.
When travel restrictions were enacted in March, Airbnb instructed platform users to issue full refunds to renters, regardless of established cancellation policies. “All Airbnb owners had no choice in the matter,” recalls Haupert. On the host support group she frequents online, “people were freaking out. Some people...had seven properties they had to pay mortgages on.” Hotel conglomerates like Marriott or Hilton may have suffered setbacks too, but the individuals who hosted on Airbnb had no corporate cushion. One was quoted in a viral Wall Street Journal article calling the setup “a bargain with the Devil.”
Airbnb eventually said they’d reimburse owners 25 percent, but only for select spring bookings with a certain date range. Haupert found a new use for the Seattle studio, renting to a neighbor’s cousin who needed quarantine space. The long-term situation brings in much less income than the old night-by-night bookings, but she offered the tenant a lease through next spring.
When travelers began venturing out again in early summer, Haupert restarted her Leavenworth Airbnb listing and was bowled over by the response. The first dates sold within a week; she was quickly booked up through fall.
After the sudden spring halt—in which the site laid off 25 percent of its staff—Airbnb bragged about its summer boom. Vacation-hungry Americans turned their eyes to self-contained getaways within driving distance from big cities. Rural American hosts, Airbnb reports, earned 25 percent more in June 2020 than the previous year, a total of $200 million. Just try to book a Western Washington cabin, any cabin, for the weekend; by midweek, pickings are slim.
Of course, Airbnb didn’t share numbers on urban properties, where signature attractions stayed shuttered through the summer. Overall earnings from the company’s second quarter reported a 67 percent drop in revenue from the same period in 2019. Still, the company remains valued at $18 billion and proposed an initial public offering in fall.
Haupert saw that the similar VRBO, owned by Expedia since 2015, was their first platform to rebound. Still, she says, “At some point it might switch back to resorts and hotels and the more mainstream way of travel.” For now, Airbnb’s bed-and-no-breakfast model appears to be the vacationer’s lifeboat through the pandemic storm. “People want to get out there,” she says. “It’s getting a little crazy.”