Airbnb has struggled with making headway in China in the past, but 2017 was a breakthrough year for the company. For the first time, the home-sharing platform recorded full-year profitability since the company was founded in 2008, with the China market being a key source of growth. They’re expecting that this growth will continue, predicting that by 2020, China will be their most significant source market.
The company is doing especially well among millennial Chinese travelers, in fact, 18 to 35-year-olds make up almost 80 percent of their Chinese customers. This is due, in large part, to the company’s savvy social media team and their expert use of Chinese influencers to create thoughtful and heartwarming campaigns that capture the ethos of this younger generation.
While this market is significant, Airbnb is hoping to expand to reach a larger portion of the China market, which they now might be able to do thanks to several new changes announced on February 22nd at a press conference in San Francisco.
During the event, company leaders launched a new initiative – Airbnb Plus, which is a new category of accommodations that are guaranteed to meet 100 different criteria and come with certain amenities. They also shared that four new niche categories of accommodations will be added to the site, as well as revealed the upcoming launch of their luxury segment, Beyond Airbnb.
Let’s take a deeper look at how each of these announcements will appeal to Chinese travelers:
Granted part of the appeal of booking accommodations through Airbnb is that each home is unique, but sometimes this inconsistency is a drawback as customers are never quite sure what they’re going to find when they show up. Whereas one house may be clean and come fully-stocked with shampoo, toilet paper, pots and pans, and even snacks, another may be a bit run down and not even have dish soap.
This unpredictable nature of rental homes has proved to be an issue in the China market as many Chinese travelers do not want to give up the conveniences and services that come with a hotel stay. Other things such as access to strong Wi-Fi, a safe neighborhood, and overall cleanliness are also very important factors when choosing accommodations.
Airbnb’s new initiative, Airbnb Plus, is likely to solve this issue. Announced a couple days ago, Airbnb Plus is a new category of accommodations that are guaranteed to meet 100 different criteria and come with certain amenities. Now, for the first time, Airbnb’s customers can have peace of mind when they’re considering where to stay.
“There is an untapped segment of travelers who haven’t used Airbnb because they don’t like surprises, but now, they may be open to booking a stay through the site,” Airbnb’s chief executive Brian Chesky shared with The New York Times.
Homes must pass rigorous screening to become part of the Plus program. Hosts must submit an application and, if they pass the initial review, Airbnb will send a local representative to inspect the home and take photos.
Of course, more comforts mean higher prices: the average nightly rate of an Airbnb Plus home is $200, compared with the $100 average rate per night for a standard listing. However, this is unlikely to be a huge issue for independent Chinese travelers who are typically choosing a home rental for the experience and not for the cheap price tag.
New categories so users can find a particular style home more easily
Another change that is likely to be a hit with Chinese travelers is the addition of four new property classification types — boutique hotels, bed-and-breakfasts, vacation homes and distinctive properties such as tree houses and yurts.
Currently rental properties are listed under three categories— shared spaces, private rooms and entire homes. Expanding the classification options will make it easier for travelers to find the type of property they are looking for.
At the same time, Airbnb has also launched Airbnb Collections, where they have assembled lists of properties suited for a certain demographic of travelers like families and honeymooners. This is sure to be popular in China where both family travel and destination weddings are on the rise.
At the press conference, Airbnb also announced the launch of their luxury collection, Beyond Airbnb, later this spring.
So far Airbnb has been very slow to catch on among wealthy Chinese travelers. In a report put out last year by Hurun only 25 percent of Chinese HNWIs interviewed had even considered Airbnb-style accommodation options, instead preferring private boutique hotels and yachts when considering options other than brand hotels. Those interviewed cited personalized service, views, cleanliness, and location as the most important factors influencing accommodation choice.
In the past, Airbnb has not clearly demarcated luxury properties on the site making them difficult to find. Moreover, as mentioned above with Airbnb Plus, there was no clear guidelines as to what a luxury property must provide causing the majority of wealthy travelers to stick with safer options where they know they will be comfortable and their money will be well spent.
While Airbnb has yet to provide details regarding Beyond Airbnb, this announcement is following their purchase last year of the home rental company Luxury Retreats. Currently, Luxury Retreats has over 4,000 properties and offers true luxury services including a team of specialists who work one-on-one with travelers to help them find their ideal accommodation, personalized services and 24-hours concierge. Many of the rentals on the platform come with airport transportation, housekeeping and a private chef.
If this is any indication of what Beyond Airbnb will offer it’s safe to say that Airbnb will see an uptick in interest from Chinese luxury travelers.
These new changes address many of the things Chinese travelers have traditionally disliked about the platform and might be just what Airbnb needs to capture a larger segment of the market and set themselves up for even greater success in 2018.