Airbnb Introduces High-end Offer in Pivot Toward China

Editor’s note : Airbnb may sound closer to couch surfing than a luxury hotel, but it has the potential to offer more exclusive, spacious, and isolated locations than a five-star franchise ever could. This story was originally published on Jing Travel. Airbnb has struggled to make headway in China in the past, but 2017 was a breakthrough year for the home-sharing platform. For the first time since the company was founded in 2008, they recorded full-year profitability, 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 Chinese millennials. In fact, 18 to 35 year olds make up almost 80 percent of its 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 other demographics with changes announced on February 22 at a press conference in San Francisco. During the event, company leaders launched a new luxury segment, entitled Beyond Airbnb, plus an initiative called Airbnb Plus for accommodations that meet 100 different criteria. The company also shared that four new niche categories of accommodations will be added to the site. Beyond Airbnb 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 venturing away from big brand hotels. Those interviewed cited personalized service, views, cleanliness, and location as the most important factors influencing their accommodation choices. In the past, Airbnb has not clearly demarcated luxury properties on the site making them difficult to find. Moreover, there was no clear guidelines as to what a property must provide to constitute luxury accommodations, 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. The announcement following Airbnb's 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, and offers personalized services and 24-hour access to a concierge. Many of the rentals on the platform include 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. Airbnb Plus Part of the appeal of booking accommodations through Airbnb is that each home is unique, but sometimes this inconsistency is a drawback. Whereas one house may be clean and come fully-stocked with shampoo, toilet paper, pot and pans, and even snacks, another may be a bit run down and lack basics, such as dish soap. This inconsistency has scared off many Chinese travelers, who prefer to spend more when they travel to guarantee a safe and convenient stay. Access to strong Wi-Fi, a nice neighborhood, and overall cleanliness are also very important factors when they choose their accommodations. “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 are screened before becoming 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 comfort means 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 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. 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.

Airbnb Introduces High-end Offer in Pivot Toward China

On this page

Published February 26, 2018

Sectors

Insights

Company

Airbnb Introduces High-end Offer in Pivot Toward China