Business

Airbnb was ensnared in the Capitol Riot fallout. It somehow still came out on top

Posted January 26, 2021 1:42 p.m. EST

— Brian Chesky had some air mattresses, but not much more, in 2008 when the presidential election triggered an idea for his then-fledgling startup, Airbnb.

To draw attention to their site, Chesky and his co-founders started selling politically themed cereals. There were Obama-os, "the breakfast of change," and Captain McCains, "a maverick in every bite," as Chesky has recalled in interviews. Money had been so tight that year, Chesky said, that he lost 20 pounds as he ate less.

Luckily, the cereal gimmick was a hit, selling out in days, Chesky said in a 2013 interview with the tech publication Pando. Airbnb sold about $30,000 of cereal, and got mostly out of debt, he said. Politics could be part of the marketing strategy, especially for a company just scraping by.

Just over 13 years later, Chesky doesn't have to worry about his next meal. He's worth billions of dollars after Airbnb's December 2020 initial public offering. The company's stock doubled on its first day.

But the most recent presidential election and inauguration have proven radically different than the first for which Airbnb was around.

In a world in which American corporations can no longer maintain a sense of detached indifference, Chesky and Airbnb must increasingly wrangle with politics and power beyond what a company like Airbnb would usually have to deal with, as Washington, DC's violent insurrection illustrated. Few in the hospitality industry could have imagined having to consider issues like an insurrection when Chesky first launched Airbnb.

But somehow, Chesky and Airbnb might come out on top all over again.

Airbnb makes a call

Earlier this month, Airbnb hosts were alarmed to find their homes used as staging grounds for violence. Calls came for Airbnb and competitors to restrict rentals.

"Residents throughout the District endured severe trauma with evacuations of residences and businesses," wrote 70 DC Advisory Neighborhood Commissions, neighborhood governing bodies of elected officials, in a letter calling for hotels, Airbnb and VRBO to not rent during inauguration week. "There are strong indications these individuals plan to return to the District during Inauguration week to wreak havoc on our city."

Organizers calling for a DC shutdown said that their volunteers messaged 3,400 DC Airbnb hosts and encouraged them not to rent their properties.

Chesky and Airbnb faced questions of their responsibility to the American democracy. Any move in either direction could have had a significant financial impact on Airbnb, as presidential inaugurations historically attract thousands of visitors who are willing to pay top dollar to stay in the nation's capital.

Chesky had to navigate the question of whether his response to the insurrection would be well-received by Wall Street investors. Airbnb's reputation was on the line.

Get it right, and Chesky would look like a responsible corporate steward. (Both Chesky and Airbnb declined to comment for this story.)

Days after the Capitol insurrection, Airbnb released a "Capitol Safety Plan," saying it would review DC reservations and ban individuals involved in criminal activity at the Capitol. But that didn't quiet critics. DC residents continued to call on Airbnb to halt reservations. Government officials like DC Mayor Muriel Bowser, Virginia Gov. Ralph Northam and Maryland Gov. Larry Hogan called for people to not attend the inauguration in person.

Chesky announced a revised plan Jan. 13, canceling all short-term reservations in the greater Washington, DC area, not only refunding guests' payments, but reimbursing lost reservation income to hosts, too. Long-term reservations that extended outside Jan. 15-21 were unaffected.

The move was a much different response than competing hotels and online travel sites like VRBO, which have generally remained open.

Peter Kern, CEO of VRBO's parent company Expedia told CNN Business Jan. 18 that there were "a lot of completely legitimate and appropriate uses of the properties." A day later, though, Expedia announced that new reservations would be blocked in Washington, DC, following updated guidance from government officials.

In a blog post in which it announced its decision Airbnb warned of "armed militias and known hate groups that are attempting to travel and disrupt the Inauguration" in its blog post.

Airbnb seems to have navigated the situation without any major issues. But doing so wasn't a given.

It was unclear before the inauguration how effective Airbnb's reservation review process was, and if it led to meaningful cancellations, or any at all. Airbnb declined to say how many cancellations were made before the inauguration. Its competitor, VRBO, also declined to say if its own reviews had led to cancellations.

Airbnb's policy did not appear to be comprehensive in addressing potential for violence in state capitals. While Airbnb had publicly said it reviewed reservations in select state capitals, such as Lansing, Sacramento, Olympia and Carson City, it declined to say before the inauguration if it had done so in every state capital.

Airbnb looks ahead

Airbnb has set a precedent on how it will deal with risk of violence at major events like presidential inaugurations, whether it's from the far-right as was the case this month, or other groups. While similar events will hopefully be rare, some in the travel industry are taking notice and seeking more collaboration to improve safety.

Tori Emerson Barnes, executive vice president, public affairs and policy at U.S. Travel Association, which represents travel industry companies like Airbnb and Expedia Group, believes that there could be more coordination and information sharing in the future to benefit the industry. Hotels and rental car companies could receive the same access to security threats as airlines do.

"We're witnessing these kinds of events in a way that in most of our lifetime, we haven't seen," Barnes said. "The more engagement, the better."

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