First Free Story (1 of 3)Join Skift Pro
Just a little more than a week after Airbnb decided to cancel 80 percent of its bookings in Japan to comply with new stricter laws for short-term rentals, the company debuted a new partnership-driven business strategy, For now, it is limited to Japan, but also serves as a model for future growth plans in other regions.
The Japan model may also hint at future programs from Airbnb that relate to loyalty and its new Airbnb Plus ctegory of homes.
Called Airbnb Partners, the program involves partnerships between Airbnb and 36 different Japanese businesses, ranging from already established loyalty programs and service providers that can help Airbnb hosts, to supply partners such as real estate developers.
Airbnb co-founder and Chief Strategy Officer, Nathan Blecharczyk, who also serves as chairman of Airbnb China, announced the new program at an Airbnb Day event held in Tokyo on June 13.
The Importance of Japan to Airbnb
Japan is a crucial growth market for accommodations providers, Airbnb included. The country has welcomed a record number of international visitors for at least the past five years. In 2017, Japan welcomed a total of 28.7 million tourists, up 10.4 million from 2013, and it is also set to host the upcoming 2020 Summer Olympics.
But Japan is also a destination that could benefit greatly from more lodging options, both in the form of hotels and homesharing, to accommodate the millions of tourists arriving each year.
For Airbnb, in particular, Japan is its most in-demand country in the entire Asia-Pacific region. In 2016, Airbnb accommodated 3.7 million tourists, or approximately 15 percent of all international tourist arrivals in Japan.
And with the Japanese government’s new laws regulating short-term rentals requiring registrations taking effect on June 15, it’s more crucial than ever for the company to not only comply with local regulations but make sure it has a continued future in the country.
In other words, Airbnb can’t afford to flout local laws in Japan and, in order to compete with other homesharing platforms — Expedia’s HomeAway and China’s Tujia included — it needs to make sure that the private accommodation experience on Airbnb is exceptional, both for guests and for Airbnb hosts.
Here’s a rundown of the Airbnb Partners strategy in Japan, and how it might apply to the company’s future plans for growth in other regions.
In Japan, specifically, Airbnb is partnering with Culture Convenience Club’s T Point loyalty program in late 2018, which acts like a coalition loyalty program among lifestyle retail brands. When this program launches, Japanese residents can earn T Points when they book a listing on Airbnb.
One of Airbnb’s other partners includes All Nippon Airways (ANA), with which the company worked with on a “Live There” promotion, similar to its loyalty tie-in with other airlines such as Delta.
Earlier this year, Airbnb announced it would begin piloting its own loyalty program, called Superguest. Details on the program were scant, but we assume it will benefit greatly from the experiences of the company’s new head of Homes business, former Amazon Prime leader Greg Greeley. It’s possible that, when Superguest does finally launch, it may incorporate partnerships with coalition loyalty programs such as Japan’s Culture Convenience Club, or perhaps, Canada’s Aeroplan, in addition to incorporating elements of Amazon Prime.
Making It Easier for Airbnb Hosts to Be Good Hosts
Working with AirTripStay, a short-term rental management company, Airbnb will also make it easier for Airbnb hosts throughout the country to benefit from the AirTripStay’s services, which include help with registering listings, providing professional photography of homes, offering cleaning services, and more.
Right now, AirTripStay’s services are primarily limited to the Tokyo region but they’ll soon be franchised out on a nationwide basis to other destinations that include Hokkaido, Chugoku, Shikoku, and Okinawa.
Working with third-party short-term rental managers is something Airbnb will have to consider doing more, especially if it wants its new Airbnb Plus category of more premium, verified homes to succeed. The company also announced that it is currently accepting applications from Tokyo-based hosts to be a part of the Airbnb Plus program, and that homes from Osaka and Kyoto will also be added later this year.
Airbnb is also expanding the host training program it developed with Pasona Corporation last year to more major cities, and it will also roll out a Japan-specific insurance policy program for its hosts as part of a partnership with Sompo Japan Nipponkoa Insurance and Aioi Nissay Dowa Insurance.
As it has done so in other regions, Airbnb will also bring a version of its Airbnb Friendly Buildings program to Japan. The program invites multifamily housing developers and landlords to encourage their tenants to rent out their units on Airbnb when they aren’t using them.
In Japan, however, the program will focus on developing homes in both urban and rural areas that are Airbnb friendly. The company is working with Japanese author and screenwriter Kundo Koyama and his company, Orange and Partners, to launch a project in conjunction with a real estate developer, Open House, to build homesharing-ready, Airbnb-branded properties that will be ready for sale by the end of 2018.
The development of these homesharing-friendly homes ensures a healthy future supply of listings for Airbnb in Japan. And by being branded with the Airbnb name, these Airbnb-friendly homes will also operate on a model that parallels the branding relationship that hotel companies traditionally have with owners and real estate developers.
One other example of an Airbnb-branded residence is the upcoming Niido Powered by Airbnb properties that are expected to open in Florida this year. The first of these branded complexes is in the process of transforming into a Niido Powered by Airbnb, but is facing some challenges from residents who were unaware that their apartment complex would begin encouraging Airbnb rentals.