With all the leadership changes taking place at Airbnb in the past few weeks, should we be expecting even more? Does this mean a CEO change is next?
Airbnb co-founder and chief strategy officer Nathan Blecharczyk has been named chairman of Airbnb China, also known as Aibiying — a clear signal that the company is serious about growing its business in one of the largest travel markets in the world.
In his new additional role, Blecharczyk will travel to China on a monthly basis and work with Airbnb China staff of over 100 team members based in Beijing and Shanghai to offer support and leadership. Airbnb expects to more than double the number of team members it has in China within the next year.
‘Upside to Localizing in China’
Airbnb has made China a major focus for the company, especially within the last year. In 2016, it spun off a separate company, Airbnb China, and also agreed to share data on its China operations with local officials to comply with Chinese laws. In March, the company rebranded Airbnb China to Aibiying and said it was committed to investing heavily in its talent and infrastructure in the region. In June, it appointed Hong Ge as vice president of Airbnb China after a long search for a lead executive.
And just last month, when Blecharczyk spoke at the Skift Global Forum in New York City, he emphasized Airbnb’s growth in China and said the country is a region he is more excited about than any other market at the moment.
“China is just so exciting,” Blecharczyk said. “From the size of the opportunity. The fact that so few Western tech companies are successful there. There’s certainly a lot of competition. It’s just really interesting.”
He also noted that what works elsewhere in the world just doesn’t work in China, referencing other tech giants such as Google, Amazon, and Uber, which have struggled to establish themselves in the country. He also said Airbnb learned that firsthand when “our site just didn’t work frankly” when the company first began doing business in China about three or four years ago. Now that Airbnb has established Airbnb China and put local staff on the ground, however, he noted “There’s a lot of upside to localizing in China.”
And while Airbnb initially focused on outbound Chinese travelers, Blecharczyk noted that he’s seen rapid growth in Airbnb’s domestic Chinese business which now comprises more than 120,000 properties, what he said comprises “a huge percentage of our business.”
A release announcing Blecharczyk’s appointment noted that in one 12-month period, Airbnb China has seen more than 2.25 million guest arrivals in Airbnb listings in China, a 287 percent year-over-year increase. During Golden Week, an annual period where Chinese consumers travel en masse domestically, Airbnb bookings in China nearly tripled in comparison to the same period last year. Airbnb says that “China is Airbnb’s fastest growing domestic market ever as well as our second fastest growing outbound travel market ever.”
Airbnb China Versus the “Airbnb of China”
That Airbnb is placing such a focus on growing Airbnb China by appointing Blecharczyk as chairman speaks heavily about the importance of the region to the company — and the lengths to which the company is willing to go to establish dominance not only in China but in the greater Asia-Pacific region over all.
This appointment will also be pivotal as Airbnb China continues to compete with China’s own homegrown rival to Airbnb, the Expedia- and Ctrip-backed Tujia, which earlier this month announced that it had raised an additional $300 million in funding and is now worth an estimated $1.5 billion.
Tujia, sometimes referred to as the “Airbnb of China,” has more than 650,000 listings globally, much of it concentrated in China and Asia-Pacific. Airbnb has a total of 4 million listings and a valuation of $31 billion but, as history has shown, the Chinese government tends to favor its own homegrown companies over foreign ones.
To compete with Tujia and other China-based homesharing platforms, it looks like Airbnb is also focusing much more closely on quality standards — something for which Tujia is known. Tujia employs local hosts who act like local vacation rental property manager to ensure the quality of their listings in China, and it sounds like Airbnb will do something similar as it scales its business in the region, taking on a much more hands-on approach to educating its own hosts.
In a statement, the company noted, “In the next year, the number of Airbnb team members in China who serve hosts will more than double and we will implement new functionality that enforces strict quality standards. We will be accelerating on the ground preparation and training for hosts. We have already hosted offline community events in Beijing and Shanghai. In the weeks ahead, Nathan will personally meet with dozens of prospective hosts and in 2018, we will conduct more than 100 of these kinds of host education sessions in 10 cities across China.”
And while Aibiying and Tujia compete in China, they are also competing for market share in other parts of Asia, especially in Japan, which is currently Airbnb’s most popular country in the region.
Blecharczyk’s appointment as chairman also comes after the departure of Airbnb’s longtime chief marketing officer Jonathan Mildenhall, who announced his departure earlier this month.
It’s clear that as Airbnb pursues its eventual IPO, the company is focusing on scaling up and, in some ways, reinventing and evolving the brand it has built in just nine years.
Airbnb co-founder and chief strategy officer, speaking about China and other issues at Skift Global Forum in New York on September 26, 2017.
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Photo credit: Nathan Blecharczyk, Airbnb co-founder and chief strategy officer, speaking about China at Skift Global Forum in New York, September 26, 2016. Skift