Brian Chesky led Airbnb through the COVID-19 pandemic using transformational leadership. When the pandemic hit, Airbnb lost 80% of its business. Chesky prioritized stakeholders and made quick decisions to refund guests $1 billion and loan hosts $250 million. He also found homes for frontline workers and laid off 2,000 employees with generous severance packages. Through clear communication and empathy, Chesky guided Airbnb from an 80% revenue drop to a successful IPO within 9 months.

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In June 2021, Reid Hoffman of Greylock Partners interviewed Airbnb's CEO and Co-
Founder, Brian Chesky, about his company's successful approach to crisis management in the era
of COVID-19. Just eight weeks into the pandemic, Airbnb lost over 80% of its business. And
within that time, guests requested over $1 billion in cancellations. But policies in place allowed
hosts to deny those cancellations, which created further issues for Airbnb (Greylock, 2021). In
addition, the compounding loss of revenue complicated matters for the travel marketplace
organization, as the company needed to find a way to save money. Fortunately, through strong
leadership and a stakeholder focus, Airbnb went from potential destruction to a successful IPO
nine months later (Yohn, 2020).
Chesky credits his focus on stakeholder capitalism as the reason he was able to make
quick decisions to protect all stakeholders and the company as much as possible during the crisis.
He notes that one of the keys to Airbnb's crisis management success was making quick
decisions, always acting with all stakeholders in mind. In addition, Chesky's transformational
leadership style allowed Airbnb to survive an 80% drop in revenue and a significant
restructuring, which most companies would not be able to endure. "Transformational leaders
help followers grow and develop into leaders by responding to individual followers' needs by
empowering them and by aligning the objectives and goals of the individual followers, the
leader, the group, and the larger organization" (Cherry, 2020).
Overcoming Challenges
Brian Chesky exhibited many of the recommendations for effective public affairs
communications presented by Hyland-Wood et al. He led Airbnb through its crisis by engaging
in clear communication, striving for maximum credibility, and recognizing that uncertainty is

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inevitable. He also communicated with openness, frankness, honesty, and empathy and
empowered people to act (Hyland-Wood et al., 2021).
As noted above, the company quickly lost 80% of its business and faced $1 billion in
cancellations from guests. Policies at the time allowed hosts to keep the money, but Chesky
decided to override the policy by siding with health and safety for all stakeholders. And, as such,
the company refunded the guests $1 billion. With this decision, the hosts lost money as well.
And since hosts are essential stakeholders for Airbnb, the company chose to take out a loan
(debt) to give the hosts $250 million as a sign of goodwill and faith in the partnership. Airbnb
also started a $10 million fund to help hosts pay their mortgages during the crisis (Yohn, 2020).
Noting the need across the world, Chesky called upon hosts who wanted to partner with
Airbnb to offer homes for frontline workers who could not safely return home to families while
working with infected patients. As a result, over 200,000 hosts provided homes for free or a
discount to frontline workers (Greylock, 2021).
Most notably is Chesky's approach to laying off over 2,000 employees. In an open letter
published on its site, Chesky explained step-by-step how the layoff decisions were made and,
most importantly, what the company was offering to those losing their jobs (Airbnb, 2020). In
this candid letter, he expressed empathy as he explained the company's restructuring and the
need to cut jobs to stay in business. However, he also addressed these important stakeholders'
interests by treating "everyone in a compassionate and thoughtful way" (Airbnb, 2020). This
expression of "compassion enhances credibility and can lead to more effective communication"
for a leader (Hyland-Wood et al., 2021).
Through its vow to do as much as it can for those impacted, Airbnb offered 14 weeks of
base pay plus an additional week for each year worked at Airbnb as severance pay. Airbnb also

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provided an equity stake to each laid-off employee (and remaining) and one year of health
insurance through COBRA. Chesky also personally reached out to other CEOs to help the laid-
off employees find other employment. In addition, he established a public-facing alumni talent
directory with dedicated recruiters for former employees to opt-in for assistance. Finally, each
employee was allowed to keep their laptop to help them find a new job (Airbnb, 2020).
Transformational Leadership
Through the pandemic, Chesky showcased many aspects of transformational leadership.
In interviews, he regularly refers to Airbnb's stakeholder groups and the principles set for each
group. Chesky aims to empower those around him to build the company in creative and
innovative ways. For example, in the Greylock interview, he reminds CEOs to get emotionally
attached and see if they can still decide on an approach based on core principles, all while
knowing the impact on the people (Greylock, 2021).
Chesky engaged in clear communication grounded in empathy, openness, frankness, and
honesty to build maximum credibility (Hyland-Wood et al., 2021). To do this, he started weekly
town halls answering all questions asked of him. He said, "I just looked into the camera every
week, and I would just try to give incredibly heartfelt messages" (Greylock, 2021). In addition,
Chesky (and other founders) made numerous personal calls to employees to answer questions
and address concerns during the layoff period. Good leaders pay attention to how people are
struggling and take corresponding measures to support them. Finally, Chesky started weekly
board meetings (versus Airbnb's regular quarterly meetings) because he said, "I’m going to be
making so many decisions, it’s going to feel like a whole quarter goes by every week”
(Greylock, 2021).

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Chesky wanted all Airbnb stakeholders to understand each decision and feel a part of the
company's future throughout the crisis. These examples align with a McKinsey & Company
article about leadership in a crisis. The article states that "Thoughtful, frequent communication
shows that leaders are following the situation and adjusting their responses as they learn more.
This helps them reassure stakeholders that they are confronting the crisis" (D’Auria & de Smet,
2020). In true transformational leadership form, Brian Chesky included the company
stakeholders in his message about facing a crisis head-on. He does not regularly use the word "I"
but instead chooses to include everyone ("we"). The following quote from his interview shows
his caring nature about the people around him that help every day to bring Airbnb's goals to
reality.
"If we’re lucky, we’ll be remembered for how we handled the crisis. If we screw this up, we
won’t exist, and we won’t be remembered, but we don’t want to be remembered as villains."
– Brian Chesky (Greylock, 2021)

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References
Airbnb. (2020, May 5). A Message from Co-Founder and CEO Brian Chesky. Airbnb
Newsroom. Retrieved November 5, 2021, from https://news.airbnb.com/a-message-from-
co-founder-and-ceo-brian-chesky/
Cherry, K. (2020, March 4). How Do Transformational Leaders Inspire and Motivate
Followers? Verywell Mind. Retrieved November 9, 2021, from
https://www.verywellmind.com/what-is-transformational-leadership-2795313
D’Auria, G., & de Smet, A. (2020, March 16). Leadership in a crisis: Responding to the
coronavirus outbreak and future challenges. McKinsey & Company. Retrieved
November 5, 2021, from https://www.mckinsey.com/business-functions/people-and-
organizational-performance/our-insights/leadership-in-a-crisis-responding-to-the-
coronavirus-outbreak-and-future-challenges
Greylock. (2021, June 8). Brian Chesky on Airbnb's Ethos of People-First Capitalism [Video].
YouTube. https://www.youtube.com/watch?v=TKz9Aohljvw
Hyland-Wood, B., Gardner, J., Leask, J., & Ecker, U. K. H. (2021). Toward effective
government communication strategies in the era of COVID-19. Humanities and Social
Sciences Communications, 8(1). https://doi.org/10.1057/s41599-020-00701-w
Yohn, D. L. (2020, November 10). How Airbnb Survived The Pandemic—And How You Can
Too. Forbes. Retrieved November 5, 2021, from
https://www.forbes.com/sites/deniselyohn/2020/11/10/how-airbnb-survived-the-
pandemic--and-how-you-can-too/?sh=4d756b593845