New Delhi: Online homestay company Airbnb Inc. sees a huge growth potential in India on the back of a rising middle class and millennial travel buffs, shifting its focus to domestic travel in a “compelling" country.
“Millennials are our real target audience," Nathan Blecharczyk, co-founder and chief strategy officer, Airbnb, said in an interview. “That’s what we see across the world as well. India is compelling," Blecharczyk said.
So far, Airbnb has received 1.8 million guests across its platform in India.
Globally, Airbnb expects that by the end of the first quarter of 2019, there will have been over 500 million guest arrivals in its listings since 2008, when the company was founded. The company launched its platform in India in May 2016 and has 45,000 listings.
“(India has) a substantial base. It’s still small relative to the overall opportunity. But our awareness in India is much higher than it was few years ago. The understanding of the Airbnb concept is at a tipping point," he said.
Airbnb’s focus when it entered the Indian market was on Indians travelling abroad, but that has changed. “We see robust growth, especially in the domestic market. Domestic travel grew 78% just in the last year. That’s the future opportunity. Out of the total addressable market of India, three-fourths is domestic travel. Our trend is heading in that direction," Blecharczyk said.
Airbnb, which offers a range of accommodation options—from apartments and villas to castles, treehouses and bed-and-breakfasts—is the brainchild of three friends, Joe Gebbia, Brian Chesky, and Nathan Blecharczyk. It started out as an idea to turn their loft into an area that could fit air mattresses, and offer breakfast, to host travellers coming for a design conference in San Francisco. Chesky is now the chief executive officer and Gebbia the chief product officer.
Eleven years on, the company says it is ready for an initial public offer (IPO) but has not specified a timeline. It has also announced it wants to enter the flights segment, and earlier this month hired aviation industry professional Fred Reid as global head of transportation.
Over time, Airbnb aims to have a unique offering in each aspect of travel.
“There’s a reason why we haven’t gotten into flights yet. It’s because we weren’t ready to solve that problem and figure how to innovate...we believe in harnessing the power of people and the community. That is our philosophy...people-powered. Exactly how that manifests itself in flights, I’m not going to reveal, and it will take some time before you see that available," Blecharczyk said.
Airbnb expects 2019 to also see traction in emerging markets and will shift more investment to these regions. “We continue focus on emerging markets. I spend a lot of time in China. India is also a big part of that story. South-East Asia is really growing in popularity on Airbnb," he said.
The company’s rival in India is Oyo Rooms (Oravel Stays Pvt. Ltd), which is also the country’s third most valuable startup. Oyo has a presence in seven countries and plans to expand to at least 15, with a focus on Asian nations.
Airbnb, however, is not too worried about competition in India. “Travel is a huge space so there’s room for different players, especially different players taking different approaches. There are folks who are very focused on discounting. Airbnb’s approach has always been about the experience. We can offer really good value too, but we don’t lead with that. Plus, we don’t see anyone approaching the market like we do," said Blecharczyk.
While Airbnb’s presence in India is still small, it plans to invest steadily to grow the market.
“How we prioritize our investments has very little to do with current scale and very much to do with future opportunity.... When we think about success in India, it’s really not about what happens this year or next year. We know what India will look like in 10 years. It’s going to be huge. It will be one of the most important economies in the world. India is incredibly young and is a place where there’s a growing middle class.... We invest with that in mind," he said.