Rooms portfolio to power Airbnb growth
New Delhi: Airbnb, the American home and apartment rental platform, is now focusing more on its rooms portfolio in India as it enters its next phase of growth.
Recognizing the substantial earnings potential in the rooms-only business, it aims to tap into this segment, especially considering the lower age demographic of its Indian customers, which includes millennials and Gen Z.
Amanpreet Bajaj, general manager for India, Southeast Asia, Hong Kong, and Taiwan, said India is a key growth market for the company in an interview with Mint.
“India is one of the most important geographies from a growth perspective for our company,” he said, adding that the company has achieved domestic growth surpassing 2019 levels with a 110% increase in 2022, accompanied by 70% growth in nights bookings in the country.
Despite the ongoing development of the hosting ecosystem in India, he said it is actively collaborating with hosts and states to facilitate and encourage more people to join as hosts.
The company has also recently established a tech hub in Bengaluru to support its product development efforts for both Indian and global operations.
While the company did reduce its workforce during the pandemic, it remains committed to strengthening its core services and creating tools that make hosting easier for individuals.
“A lot of people have primary and secondary homes, and many companies also now manage these homes like SaffronStays if the host can’t manage it themselves.
Some of those companies also listed with us to use as a distribution perspective,” he said.
In 2022, its private room hosts in India collectively earned over ₹100 crore, showcasing financial benefits available to hosts. Additionally, the number of nights spent in private room listings experienced a notable 80% growth compared to the previous year.
The most popular booking categories included individual rooms, tropical locations, properties with ‘amazing pools’, beach areas, and national park destinations.
About 80% of private room stays in 2022 were priced under $100 per night (approximately ₹8,200), with the average rate for a private room in India being ₹2,572 per night.
Bajaj noted a surge in travel interest among Indians for international destinations. “A lot of Indians want to travel abroad.
Southeast Asia and Europe are the top 10 places where we are seeing a surge in searches as compared to last year. When Indians do travel overseas, they want to experience it like locals.
Typically, we are seeing millennials and Gen Z leading the charge for us in India,” said Bajaj.
The flexibility of remote and hybrid work arrangements, coupled with an increase in the average length of stays and spending, continues to contribute to the popularity of its bookings throughout the year.
The company charges anywhere between 14-18% as commissions from customers and about 3-4% from its hosts.
But Airbnb India Private Limited saw a 32% decrease in revenue in FY22 from the year prior.
However, as per the company’s registrar of company filings accessed via the business intelligence platform Tofler, the company had a reduction of 32% in its total revenue at ₹32.16 crore versus ₹47.33 crore in FY21.
This is where the marketing and business development entity is housed.
However, the global entity witnessed a 20% increase in its revenues in the first quarter earnings (January-March). And for 2022, it reported a net profit of $117 million versus a net loss of $19 million in 2021.
The company’s global filing to the SEC in the US highlighted that while the Asia Pacific region has yet to fully recover to 2019 levels, partly due to China being locked down.
In an earnings call, its CEO Brian Chesky cautioned that the second quarter of 2023 may present unfavourable year-over-year comparisons due to the overlap of pent-up demand from 2022 following the Covid Omicron variant.
Despite the challenges posed by the pandemic, Airbnb remains optimistic about the growth opportunities in the Indian market and is dedicated to enhancing its services and offerings to meet the evolving needs of travellers and hosts.
Bylivemint
