Nathan Blecharczyk, cofounder and chief strategy officer of Airbnb, said India operations are “set up for success” with 78% local growth overall and a fourfold growth in its business travel segment in the past year. The company has about 45,000 listings in India, with Goa being its most popular market at 6,000.
Blecharczyk, who’s a guest speaker at the Global Business Summit in New Delhi, told Anumeha Chaturvedi and Vinod Mahanta in an interview that he doesn’t see any competition from homegrown companies like SoftBank-backed Oyo in the digital hospitality space and feels there is room for everyone to grow. Edited excerpts:
Airbnb clocked more than $1 billion revenue in the third quarter of 2018. What has driven these numbers?
If you look at our business model and what we offer, we do something that is incredibly differentiated and relevant to anything else on the market, or compared to those who have come before us.
We’re just really focused on providing unique, local, authentic experiences, and whether that’s done through homes or our new product, Experiences, we’re really reshaping how people think about travel. And within that new category of experiential travel, we dominate.
If you look at our scale, after 10 and a half years, we have 5 million homes in 191 countries. Several hundreds of millions of guests have stayed on Airbnb. On any given night, there’s a couple of million guests staying in other people’s homes. It’s really a global phenomenon in every country of the world. I think we’re starting to see that play out here in India as well. It was about two and a half years ago that we started operations.
How is the India business doing?
It is doing well. It has doubled in terms of guests over the last two and a half years. It’s really set up for success. We really do view this as a long-term commitment (because) it takes time to localise your value proposition and explain your value proposition.
When we launched this company, everyone said, how can you trust a stranger, why would I want to do this, and now it has become mainstream, especially in the US and Europe, but now in emerging markets as well. You look at the top 25 fastest-growing countries for Airbnb, 20 of them are in emerging markets.
Where would you place India?
It is one of the fastest in that list.
Among the top five?
Top five would be accurate. We have seen this trend play out elsewhere in other very competitive markets too. If you look at China, for example, the country is notorious for being very competitive. And yet, Airbnb is doing very well there. We’ve focused first on establishing a strong foundation and have done a lot of outreach work in partnership with the government to showcase how the business model can be applied locally to achieve local objectives.
In India, to showcase the potential of the platform, our early partnerships centred around empowerment, entrepreneurship and women, with a focus on quality. Today, we’re announcing that we’ve launched Airbnb Plus here, which are homes that will be inspected in person for comfort, quality that addresses people’s core question — what can I expect? We can offer an even higher level of certainty around some of our homes going forward.
What we expect from all this, though, is to build that kind of general understanding of the market of what is Airbnb. And over these last two and a half years, we have had 1.8 million Indians use Airbnb. I’d say that’s a critical mass relative to the potential. It’s still a small number, but with 1.8 million who have actually used it and experienced it, and are talking about it, we can expect very robust growth off those numbers.
The way we know it’s working is, we’ve seen the growth in the domestic market. In the beginning, it was all about Indians going abroad. But now, our fastest-growing segment is the domestic segment, and that’s grown 78% over the last year alone in India.
We have about 45,000 listings in India. Goa is hugely popular — that’s probably our most popular market at about 6,000 listings. I think the flywheel has begun spinning… we can expect many more years of similar growth rates.
What do you make of the Indian competition?
We don’t focus on the competition very much. They’re very different business models. I think travel is a big space and there’s room for multiple players but I think if you look at what we do, it is very different from what Oyo does or anyone else for that matter. I think we each have our own approach to the market, and we each have a loyal following, and a sizable following.
Do you plan to go public this year?
This is obviously something I’m not going to comment on, except what we’ve already said, which is that we’re technically able to do it whenever we choose. There is a window of time where this is more likely.
How do you view the cities-versus-Airbnb conflict?
It’s part of the natural progress, where you do something new that doesn’t fit within the norms that previously existed. And then, as that thing scales, this question has to be addressed.
I think our general approach has been to partner with local governments as proactively as possible. And I think we’ve done that effectively. For the most part, there’s about 200 different municipalities or countries that have passed home-sharing laws that acknowledge that home sharing is here to stay and it’s a powerful force and it’s something that, with some guidelines in place, should be encouraged.
We have partnered with over 400 jurisdictions around the world to collect over $1 billion in hotel and tourism tax. So, I think we’re actually building a lot of constructive relationships that will unleash another wave of growth.
Of course, from time to time, you’ll see a disagreement and that will flare up and that will make a headline, but… If you put in the perspective of 200-300 positive regulations, I think it’s going quite well.
You’re the chief strategy officer. What growth drivers are you putting in place?
I think we’ve been very methodical and we’ve stuck to our roots of what makes us different as we have grown. We’ve been careful to not compromise on our vision of what travel should be. And we think travel has the potential to transform how you think about the world and other people and places.
We really think it’s about connection between people and giving them local authentic experiences. To grow and explore new opportunities, we need to bring those ingredients into this space-…you often have to reinvent, innovate and do something different. With the Experiences product, that’s what we did. That requires a great deal of patience, because you have to experiment a little bit. And then, once you come up with this very different type of product, you have to explain it to the world.
On day one, people say what is this, why should I book this? But if you look at Experiences, it’s something we launched a couple of years ago — and we now have over 20,000 Experiences. We have offered Experiences in New Delhi and Goa and the product is doing quite well. It grew over sixfold last year, and will continue to grow at a very fast rate.
Now we’re thinking about — homes, Experiences, what next? We talked about flights. Recently, we made an announcement there and made a very key hire (aviation veteran Fred Reid). He is someone with a very interesting background, who has pioneered a lot of things in travel. He is a gentleman who’s proven that you can constantly reinvent and pioneer — he has been doing it his whole life. He has actually been an Airbnb host.
We had him as a guest speaker at one of our host events four years ago. We’ve gotten to know him for a long period of time now. We’re looking at every aspect of travel, and thinking about how do we apply our philosophy of travel to the space, which inevitably means reinventing that segment.
It’s something that we have been doing very methodically but I’d say also taking our time. In other words, we haven’t let growth be our primary motivation. We take our time to do something that’s different and do it right. And then we take on another thing.
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