Can Airbnb Recover From Its Own Housing Crisis?


In just over a month, the Internet has delivered a double whammy to a hot Web startup that has not only threatened its business model, but has severely tested its reputation.

Things were going great for high-flying Airbnb, described as a "social bed and breakfast marketplace" that connects potential renters with housing owners. Then an owner blogged that a person she rented to through the site vandalized her home. With that news all over the Internet, the company's initial response was pretty tepid—kind of ironic because Airbnb is essentially a social platform, run by Web-savvy people that should know to have an airtight crisis plan.

In fact, the response was right up there with the FAQ that appears on its Web site:

Q; Will someone steal my grand piano?
A: Highly unlikely. Grand pianos weigh thousands of pounds and do not fit through doors.


However, Airbnb began to get its act together this week, issuing an unconditional apology and offering a $50,000 guarantee against damages to hosts' properties. The crisis, however, exposes Airbnb as a site with a model like Craigslist, which has had some doozy situations arise thanks to the criminal activities of some of its users.

It will be interesting to follow what Airbnb does post-crisis to repair both its business model and its reputation. Any suggestions?


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