What Airbnb’s CFO learned when the pandemic made trust a balance sheet decision

In March 2020, Airbnb was nearing an IPO that would cap one of Silicon Valley’s most closely watched growth stories. Then global travel stopped.

Within weeks, the company’s business effectively collapsed as borders closed, flights were grounded, and consumers retreated indoors. For Ellie Mertz, now Airbnb’s CFO, it was the kind of corporate crisis that rendered the usual finance playbook almost meaningless. Scenario planning, she recalled in a wide-ranging interview on Fortune Next to Lead, broke down under uncertainty that was “orders of magnitude beyond” what any company would normally prepare for.

That moment became a defining test for Airbnb’s business model and its leadership. Like many companies in the early days of the pandemic, Airbnb faced an immediate tension: Preserve cash to survive, or support the guests and hosts who make the business possible. It chose to support its community.

At the height of the crisis, Airbnb allowed guests to cancel bookings for free, including nonrefundable stays. At the same time, it paid hosts a total of $250 million to help offset their losses from pandemic-related cancellations. It was an expensive decision for a company whose revenue had fallen off a cliff.........

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