Airbnb has become the latest business to turn off the taps at its marketing division as the impact from the ongoing coronavirus crisis continues to wreak havoc on its operations.
In light of the global situation, a chastened Airbnb will suspend all marketing activities in a move which will save $800m a year. Meanwhile, company founders will forego salary for the next six months and top executives are to voluntarily accept a 50% pay cut as the business reels from an overnight collapse of the travel and tourism sector.
Reports from Reuters suggest that the home rental juggernaut is also closing its doors to new recruits save for a handful of mission-critical roles as it seeks to shore up its balance sheet for what is looking increasingly like a prolonged downturn.
Airbnb is far from alone in taking an axe to discretionary expenditure with retailers such as M&S among the hardest hit, forcing it to minimise all marketing spend of its own as it enters a period of hibernation. This followed a decision by Coca-Cola, one of the biggest spenders of them all, to tighten its own purse strings.
Adopting a more altruistic tack Budweiser has opted to divert planned sport and entertainment spend toward non-profit organisations on the frontline of containing the outbreak.
The cumulative effect of this short, sharp shock to the advertising industry is expected to drive an acceleration in innovation, e-commerce and live-streaming as businesses and consumers reassess established behaviours.
In turn, these moves will have important ramifications for media budgets and buyers, as the sector abruptly shifts gear to accommodate the new reality of a ‘homebound’ economy.
Illustrating just how dramatically Airbnb has been caught on the hop the holiday rental business has just announced its first deal with the International Olympic Committee, which have now been postponed.