While most foreign travel companies have struggled in China, it looks as if the home-sharing site Airbnb has discovered a heady recipe for success there. After some initial missteps (including six local leadership changes) the second-highest valued startup in the U.S. has taken great strides toward localizing its services for Chinese consumers, even opening a dedicated office in China — their first office outside the states.

New Airbnb China President Peng Tao said that the company has seen an explosion of growth in second- and third-tier cities, although business in Shenzhen (a first-tier city) quadrupled in the first half of 2018. Peng explained that the increase in domestic travel comes from lower-tier city residents traveling to China’s major hubs, but that first-tier city residents more often book Airbnb accommodations abroad.

airbnb china

Airbnb China President Peng Tao discussing the company’s white paper on Dec. 13. Photo: VCG

Airbnb entered the Chinese market in 2015, but only recently started testing out more local initiatives that appear to be paying off. As of March, the platform claimed over 150,000 listings in China, which is a small amount compared to the 4 million listings the company boasts worldwide. One step toward successful growth that Airbnb took this past March was to launch an offline training program — Airbnb Host Academy — that educates landlords about how to use the platform. The program attracted over 20,000 hosts, and those landlords saw their 2018 bookings on Airbnb double over the previous year. There are reportedly 50 million empty housing units scattered across China today, and Airbnb is looking to capitalize on that available housing by inviting landlords to list them on their site.

To improve the experience for guests and landlords, the company offered its Airbnb Host Academy training in China

On December 13, Airbnb published a “2018 China Travel Whitepaper” that explains exactly why the company’s efforts to localize in China should triple its business there in the second half of 2018. The paper reported that 50 percent of bookings on Airbnb in China were for destinations within the country, but it also said that China’s outbound travel reservations managed to cover an impressive 3,800 destinations in 200 countries, many of which were in Southeast Asia.

Another big revelation was just how much travelers born after 1990 have helped Airbnb grow in China, and in fact, 60 percent of the site’s users come from that demographic. As these young travelers become more interested in local experiences and foregoing group tours, Airbnb will be able to provide an attractive service for these independent tourists. And ideally, after these tourists have positive experiences with the platform domestically, they are more likely to eventually use Airbnb’s services for outbound travel.

Currently, only 30 percent of Chinese travelers using Airbnb are solo travelers, while 60 percent of users travel in groups of two or more. Within that group traveler demographic, roughly half of those users are families that want lodging with a kitchen and washing machine — a category where Airbnb owns a distinct edge over hotel competitors.

So it seems likely that Airbnb will only find more success in China beyond 2018, as the younger and travel-hungry generations in the country gain in expendable income and Chinese consumers further explore the site for their international travels.

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Hotels & Accommodation, Travel Tech & Social Media, Travel Trends