FB Pixel no scriptAirbnb expects India to become its top three market to fuel long-term growth | KrASIA

Airbnb expects India to become its top three market to fuel long-term growth

Written by Moulishree Srivastava Published on   4 mins read

The company is banking on India’s 440 million millennials that are increasingly looking for new travel experiences.

Eight years and 50,000-plus listings later, Airbnb may finally get India market to contribute significantly to its global growth.

Chris Lehane, senior vice-president of global policy and communications at Airbnb, in his recent visit to India, told local media Business Standard that over the next few years, India is likely to make it to its top three global markets.

Currently, India accounts for a mere 0.7% of the total global listings.

In March this year, the company said it has checked-in its 500 millionth customer. Asia-Pacific hosted over 100 million guests for Airbnb. The company crossed one million listings in the region by mid-2019, up from 100,000 listings five years ago, Siew Kum Hong, regional director of Airbnb Asia-Pacific, told travel media Skift.

“Asia-Pacific will continue to be the key engine of growth for Airbnb,” he added, pointing to markets such as India, China, Indonesia, and Vietnam, which have huge concentrations of millennials.

Over the last one and a half years, the San Francisco-based home-sharing giant has been shifting its focus to domestic travel from outbound and inbound travel. Apart from tying up with state governments to promote local tourism, it brought its new offering—Experiences—focusing on local events.

The company is primarily targeting India’s 440 million millennials, a group that has been traveling within and outside the country more than ever before.

Airbnb, in an internal report said, riding on the back of its “popularity among millennials and spikes in domestic travel,” it is “gaining meaningful traction” in the world’s two fastest-growing economies—India and China.

In 2018, 40% of all guest arrivals from India were from bookings by people under 30 years old, the company said in the report.

The share of Airbnb’s domestic travel, compared to the international trips taken by Indian users has increased significantly in the past three years. In 2015, a little more than half of all guest arrivals were domestic travelers, which rose to around 80% in 2018. As compared to its 65% growth in each, inbound as well as outbound guest arrivals, its domestic travelers grew by 76% in 2018.


Source: Airbnb report


Source: Airbnb report


Globally, the 11-year-old company boasts of over 7 million listings in a variety of property types that includes homes, villas, boutique hotels, tree houses, boats, yurts, among others in 100,000 cities in 191 countries.

Started in 2008 by two graduates from Rhode Island School of Design, Brian Chesky and Joe Gebbia, Airbnb quietly entered India in 2011-12. At the end of 2012, Airbnb had 4,500 property listings in the country—about fourfold increase from 2011—Airbnb’s co-founder and chief product officer, Joe Gebbia said in an interview in early 2013. He said the company saw an increase of 733% in the number of guest-nights booked in India over the last one year.

Gebbia was quite excited about Airbnb’s growth prospects in India as it was targeting the untapped budget travel segment.

“If we look at numbers, it is evident that the Airbnb model is successful in India,” Gebbia had said. “In terms of goals, over the next 12 months, we expect to triple (the) number of listings in India. Our data shows us (that) when supply grows, demand follows.”

Little did he know that a small and struggling hotel listing startup, Oravel (later re-branded as OYO), would grow up to be a global hospitality behemoth that would gobble up the market in India, and even challenge global players.

Between 2014 and 2016, the budget hotel market was going through a phase when OYO, as well as other leading online travel agencies (OTAs) such as MakeMyTrip, GoIbibo, and Yatra were offering never-heard discounts and cash-back. The discounting war to gain customers resulted in MakeMyTrip acquiring its biggest rival GoIbibo in late 2016.

In the same year, sharpening its focus on the country, Airbnb launched an India specific web platform. However, the takers of its core proposition—alternative accommodation—that includes homestays, villas, and vacation homes, were mainly from a niche community of leisure travelers looking for unique experiences.

As OYO continued its aggressive expansion in the country with deep-discounts, by mid-2019 it had almost 10,000 properties with 500,000 rooms in the country. However, since OYO pivoted from being a budget hotel aggregator to a hotel chain, earlier this year, Airbnb acquired a stake in the company. According to a Techcrunch report, the deal size is speculated to be between USD 150 million and 200 million.

With this, Airbnb has effectively converted a rival into a partner and is a step closer to its goal of building an end-to-end travel platform with home sharing, hotel booking, business travel arrangements, experiences, and more.

Since 2018, the alternative accommodation has picked up in the country, thanks to millennials traveling in and out of India. And Airbnb, along with Booking.com, and MakeMyTrip, has been one of the prime parties to benefit. The company says it’s present in more than 110 cities in India and has almost 54,000 listings, and is going deeper into smaller cities in India.

To be sure, India remains to be one of its most under-penetrated markets, and it has taken Airbnb a long time to reach a point where India is starting to contribute significantly to its global growth. According to a recent report in local media Business Standard,  some three million Airbnb users traveled to and from India in the last two years.

Now that Airbnb is preparing for an IPO next year, the company needs to spur growth as much as possible.


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