Case study - Marriott versus Airbnb

During the initial stages of the COVID-19 global pandemic, Marriott Hotels, with its 1.4 million rooms in 7,399 properties globally, furloughed tens of thousands of jobs and slashed executive salaries by 50%. Needless to say, the stress on the remaining employees and on the quality of guest services was extreme. Marriott’s well-tended image took a major hit. Marriott Hotels’ EBITDA between 2019 and 2020 was slashed by 75%, dropping from $2.2 billion to $562 million.

Meanwhile, competitor Airbnb, which had 4 million hosts in 220 countries, faced similar challenges. They lost 80% of their business in just eight weeks. 

The difference? Airbnb is a fully Exponential Organization, using all 11 attributes of the ExO model.

Airbnb refunded $1 billion in deposits to people who couldn’t travel. They paid $250 million from their balance sheet to the hosts. They cut 25% of their core staff—just 2,000 people—but also added customized services (enhanced cleaning) for the pandemic. They noticed a significant rise in domestic travel (people needing a holiday who couldn’t travel abroad, people who needed a home office, and people visiting their families but not wanting to stay with them). Even on significantly lower revenue, their 2020 adjusted EBITDA was $251 million—almost identical to their EBITDA of $253 million in 2019. (1)

As CEO Brian Chesky summarized, “This crisis revealed just how adaptable our model is. Whatever is in store for me won’t be as bad as losing 80% of our business in eight weeks. After what we’ve been through in the last eight months, we’re absolutely prepared for what is to come.”

 Airbnb Fourth Quarter and Full Year 2020 Financial Results