LONGER stays, rural places, virtual Olympic tours – all part of strategy in APAC to keep engaged
Focusing on what it can control and responding quickly to customer and host needs has clearly paid off for Airbnb which reported a 300% year-on-year jump in revenues in its second quarter to US $1.34 billion.
In its earnings call last week, the company reported 83.1 million nights and experiences booked, up 29% from the first quarter and up 197% year over year. While the delta variant may dampen travel sentiment, the company still expects the third quarter to deliver its strongest quarterly revenue on record although it expects Q3 nights and experiences booked to be below that of Q2 and Q3 2019.
“As we exit Q2 and come into Q3, we have a combination of fewer bookings for the fall, just given the nature of some of the seasonality, and any kind of impact potentially on Covid concerns,” Airbnb CFO Dave Stephenson was quoted in this report.
In Asia Pacific, where most countries remain locked down and cross-border travel is almost non-existent, managing director Parin Mehta said that “one of the big learnings for all of us in the industry is really focusing on what we can control”.
And one of the things it could control is its product and user experience. In response to changing host and customer needs at this time, it’s made more 100 changes and updates to the platform.
One key update (no surprises here) is the flexible cancellation policy filter, which allows free cancellation until 24 hours before check-in. It also allows guests to “view the house cancellation policy really clearly prior to booking, so that allows maximum flexibility,” said Mehta.
In addition to wanting flexible bookings, Mehta sees people becoming “less tethered” in general, manifesting in “a blurring of the lines between travel, living and working”. In practical terms, this translates to longer stays as consumers view Airbnb less as a temporary accommodation solution, and more as a place to live and work while they travel to different destinations as and when they can.
During its first quarter earnings call, CEO Brian Chesky shared that 24% of bookings then were for longer than 28 days; in 2019, just 14% of the group’s nights booked were for stays lasting 28 nights or longer.
The kinds of destinations have changed too – the growth of rural destinations away from urban places, said Mehta. Citing South Korea, he said, nearby travel accounted for 75% of nights booked in the first half with Jeju becoming one of the top summer destinations.
In Australia, it is partnering with farms to package farm stays “to help them generate extra income and really give urban dwellers something to enjoy in rural areas”.
With most of the planet having been through varying degrees of lockdown and isolation, there is a hunger for “unique hosted experiences”, both in accommodation and experiences.
In anticipation of a travel rebound “unlike anything we’ve seen before”, updates to the platform include making it “as easy as possible for anyone who wants to become a host to become a host”.
Two thirds of active global listings now offer moderate or flexible cancellation policies and hosts must adhere to Airbnb’s “expert-backed, five-step enhanced cleaning protocol,” said Mehta.
Airbnb has also ramped up its virtual experiences. He shared that a best-seller has been the Olympics 2020-related experiences hosted by athletes (all but one of which were sold-out at the time of writing).
He sees virtual complementing the physical when it returns. “Perhaps before someone takes their trip, they could use an online experience to maybe research the place that they’re going to; speak to some locals, plan their trip. And then in destination, they can actually take the in-real-life experience. And then even after the trip to reminisce with their friends and family, they can maybe take an online experience again. So, we could see this being part of a consumer lifecycle to really pre, during, and post, enjoy that trip and reminisce about it.”
Like many in the industry, Mehta said that Airbnb also wants travel to build back better. For example, it is working with the Community Development Department in Thailand and has signed an MOU with the Singapore Tourism Board to roll out programmes that help “local cultures to showcase to the world more authentically than maybe in the past”.
Another focus is economic empowerment. Mehta shared that in a recent survey with Filipino hosts, 57% of them said that the income earned through hosting helped them to stay in their homes in the recent past, suggesting that “as economies start to recover, tourism based in the community could be a really powerful lever” for good.
The company also recently launched an independent non-profit Airbnb.org, which provides housing in emergencies, and is already seeing hosts coming on to the platform to offer accommodation, often free, for people in response to natural disasters like the flooding and bushfires in Australia.
Initiatives like these make it seem like Airbnb is taking its commitment to better travel quite seriously indeed. And a good thing too – with a valuation of almost US$100 billion, and the anticipation of a record shattering Q3 still to come, we need all the heavyweights we can get to tip the scales towards sustainable travel.
• Featured image credit: OstapandRoksolanaMykytiv/Getty images
