Airbnb is focusing on the millennial generation and on the booming tourism industry of China to increase its profits.
The Silicon Valley-based accommodation-rental service founded in 2008 has listings in more than 30,000 cities all over the world. The $120-billion tourism industry of China gives Airbnb a glimmer of hope to turn its fortune and become profitable for the first time in 2016.
Nathan Blecharczyk, the co-founder and CTO of Airbnb, says that the company is focusing on China as the demand for its services increased eightfold in the past year, something even Airbnb did not expect.
Airbnb has received funds from Beijing-based company Hillhouse Capital as part of its global fund-raising exercise. Airbnb has also entered into partnership with several venture capital groups in China for promoting its services in the country.
Blecharczyk says that many Chinese tourists are going out of the country for vacation for the first or the second time. These Chinese tourists do not have any fixed notion if staying in hotels or using Airbnb services are better, offering a big opportunity to the company.
Blecharczyk also says that to increase its 2016 revenues, the company is also focusing on younger travelers who are looking for more adventures.
The CTO of the company says that most of the millennials own a smartphone and are very independent. They want to meet more people and have a different perspective to travel.
Blecharczyk added that in the last year the company hosted about 35 million guests worldwide and only 450 damage incidents worth over $1,000 were reported. Airbnb also announced the extension of its $1 million host insurance programme for the 110 countries that has Airbnb listings.
While Airbnb will target millennials, the company also accepted the need to gain more trust from current and potential travelers and landlords.
"We have a lot of older users but they almost always have been convinced to use Airbnb through their children," says Blecharczyk.
The satisfaction score given by older travelers are also in line with the score given by young travelers.
"It takes a little bit more effort to get over the threshold to use Airbnb, and they get that from someone they trust, like their children. Once they do, they love the service," added Blecharczyk.
The year has just started and it remains to be seen if focus on China and the millennials is the winning combination for Airbnb.
Photo: Quinn Dombrowski | Flickr