Airbnb co-founder defends value of home-sharing, compares company to hotels

Airbnb

NEW YORK - Airbnb was front-of-mind for many speakers at this week's Skift Global Forum, with Hilton CEO Chris Nassetta notably declaring that he worries about competitors that can play by different rules. “They don’t have a regulatory environment that matches ours,” he said of the home-sharing service. “It’s unfair to compete against someone with few or no rules.”

A Level Playing Field

Airbnb co-founder and chief strategy officer Nathan Blecharczyk disagreed with that statement, and argued that his business currently has 360 agreements around the world that determine how it operates in everything from towns to entire countries. “Some are policy changes focused on keeping it part-time,” he said. “Others are tax agreements.”

These regulations, he said, are leveling the playing field, contrary to laments from other insiders at the show. “We’re prepared to pay all taxes,” he said, arguing that revenue from Airbnb guests can help support all kinds of cities.

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New York City, Blecharczyk said, was the biggest holdup in terms of implementing tax agreements for Airbnb guests and hosts, and that the city was passing up more than $100 million in lost tax revenue from Airbnb. “AH&LA says that a tax will legitimize our business,” he claimed. “They’re trying to [block us], but we’ll figure it out.”

To appease concerns in New York City, he said, Airbnb already has a one-host-one-home policy in place, and took down all listings from hosts with more than one listing. “It addresses their concerns, but there’s still been no movement,” he said.

Another element that will level the playing field, Blecharczyk argued, is the growth of the platform’s “Instant Booking” policy, in which hosts do not have the option to reject potential guests. “It’s a better experience for guests,” he said. Much like a hotel, if a room is available it can be booked automatically. “With Instant Booking, if you see it, you get it,” Blecharczyk said, noting that half of the company’s listings were now available for the program, and that many more would be added soon as a matter of policy.

This new policy, he added, would help prevent discriminatory rejections from hosts. “Technology can help fight social biases,” Blecharczyk said.

China Woes

As has been noted (several times), Airbnb is still fighting to grow its footprint in China, with limited success. While Airbnb had around 80,000 listings in China as of June, that number is still far behind local competitors like Xiaozhu, which has about 140,000 listings, and Tujia, with more than 430,000 listings. To attract local notice, the company’s China branch is known as Aibiying—“welcome each other with love.”

To gain ground within China and build brand awareness with lucrative outbound Chinese travelers, Airbnb has set up an office in Beijing with 100 employees and has been securing necessary licenses for growth.

But China’s notorious technology restrictions, which block access to sites like Google and Facebook and anything else the government would rather locals not see, make it difficult for online businesses like Airbnb to grow.

Still, Blecharczyk said that Airbnb has seen “rapid growth” in China, and that the company would continue to push for a stronger presence.

Brand Loyalty?

While Airbnb does not currently have any kind of loyalty program for frequent guests, Blecharczyk said that the team  “certainly thought about” establishing one. Some guests, he said, have spent hundreds of thousands on the platform, but unlike members of Marriott Rewards or Hilton HHonors, they get nothing for their loyalty.

“They deserve special recognition,” he said. “I’d love it.” He did not, however, share any suggestions on what such a program might look like or how it would operate.  

The Value of Airbnb

In defending Airbnb to a room of hospitality professionals, Blecharczyk argued that home-sharing could bring tourism to small communities with little effort, ending the traditional Catch-22 that can delay development. (A community sees visitor demand but has no infrastructure. By the time the infrastructure is in place, the demand has faded if not outright disappeared.)

Home-sharing, he said, can cater to current demand, and revenue gained from that demand can be funelled into future development projects. “When there is demand, supply grows,” he said, noting that short-term events (like the recent solar eclipse) can help bring visitors to neighborhoods they might not otherwise visit.

“Tourism is only growing,” he said. “Airbnb can be part of the solution. We can increase the surface area into new neighborhoods or destinations where there isn’t infrastructure or investment. They may not have any hotels, but they have 35 Airbnb rooms.”

Governments, he added, are “eager” to work with the company to promote new destinations. “They want the tourism.”

 

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