Airbnb Still Hopeful About China Despite Earlier Missteps

Airbnb co-founder and chief strategy officer Nathan Blecharczyk thinks the outbound Chinese travel market, where it might have an advantage over home-grown rival Tujia, is finally starting to pay off.

After three or four years  of operating in China, and with approximately 100 employees in the country, Blecharczyk said Chinese travelers who are taking advantage of Airbnb’s substantial inventory outside of the country are finally returning to China, and choosing to stay at Airbnb properties when they do. Blecharczyk said Airbnb currently has 100,000 apartments and homes inside China.

Blecharczyk claimed that Airbnb is experiencing “rapid growth” in China, a country that he said he’s more excited about than any other market at the moment, especially given the competition. “It’s just really interesting,” he added, referring to China and business dynamics.

Blecharczyk addressed Airbnb’s growth in China and other business issues at the Skift Global Forum in New York City Tuesday.

China has been an extremely difficult market for many Western companies — and has been for Airbnb, as well.

Blecharczyk siad Airbnb has been in China for three or four years, and at first its site just didn’t work — in part because of issues with Chinese government censorship. In the next phase, Airbnb established an office in China and tried to build relationships with the government and partners.

The initial focus in China was “playing to our strength,” he said, namely outbound travel. Now the company is seeing considerable growth as outbound travelers develop an affinity with the Airbnb brand and try it at home.

Things still don’t always go smoothly, though. Airbnb rebranded in China in March to try to better compete with local companies, and there was considerable pushback about the rebranding.

Building Brand Allegiances

Blecharczyk sees Airbnb Trips, which officially launched its Experiences in New York City recently, as a way to reach out to new constituencies such as locals who aren’t traveling. Many startups dabbling in leisure travel have experienced their demise because people didn’t use them often enough.

Airbnb believes its own tours and activities may become a more frequent use case and “become an everyday app” because both travelers and locals might use it, although Blecharczyk said Airbnb’s focus for now will center on travelers.

Japan is Going Well

Blecharczyk said Airbnb is showing rapid growth in Japan, where the government has passed one of the most-favored policies toward alternative accommodations. An abundance of housing and an aging population of empty-nesters is propelling growth, he said.

In a demographic surprise, Blecharczyk said Japanese women older than 60 get the most-favorable reviews as hosts in Japan.

On Loyalty

One thing Blecharczyk said during his interview likely piqued the interest of Airbnb users: the possible development of a loyalty program.

“We’ve thought about a loyalty program and it’s frankly surprising we don’t have one yet,” he said. “I think we should.”

Should Airbnb develop its own formal loyalty program, there are numerous possibilities for the company to capitalize on its recent partnership with restaurant reservation software platform Resy, for example, as well as build up its corporate travel business even more.

The Industry Should Address Overtourism

Blecharczyk argued that the entire travel industry should address overtourism issues.

“If this is an issue now it is on all of us to get a handle it,” he said.

Blecharczyk argued that Airbnb, which can offer lodging in destinations where there is little tourism infrastructure, can help relieve the stress on over-visited destinations by opening up new areas to tourists.

Addressing new business models, Blecharczyk said there are large residential buildings in Jersey City, New Jersey, that have partnered with Airbnb to rent some of their apartments and get a revenue share. This is part of Airbnb’s Friendly Buildings program, which was launched last year.

These large residential policies can establish their own policies regarding usage, he said.

Said Blecharczyk: “I really expect it to start taking off.”

About that IPO

And at the end of the conversation, when asked when Airbnb would go public as a company, Blecharczyk said simply, “I don’t know.”