Airbnb’s India Strategy

Airbnb has a non-traditional business model. Its stakeholders are guests, hosts,
employees, shareholders, and communities. For the company, its partners are
Airbnb hosts. From the point of view of economics, the hosts are also the
suppliers, and the guests/travellers are the customers.
Some of its main competitors are Tripadvisor, Booking.com, Agoda, VRBO, etc.
What most competitors don’t offer to partners is that Airbnb offers $1 million of
damage protection, according to its CEO.
Hospitality major Airbnb’s cofounder and CEO Brian Chesky is betting big on the
Indian market and expects the country to be the startup’s biggest growth market
in the current decade.
“From a business perspective, India is an exciting new market for us. We now
have 1,000 employees there, and I believe it will be one of the biggest growth
markets, if not the biggest, in this decade,” Chesky told The Economic Times on
May 2023.
In June 2023, the company signed a memorandum of understanding with India’s
Ministry of Tourism to promote the country as a sought-after tourism destination
and shine a spotlight on its cultural heritage. It also launched a dedicated ‘Soul
of India’ microsite that showcases a range of heritage stays across the country.
As part of the partnership, Airbnb is also offering support to hosts in untapped
tourist areas, assisting them in promoting their homestays, building host
capacity, and fostering a culture of responsible hosting. Airbnb is sharing travel
insights and homestay insights with the Ministry of Tourism, so it leads to a more
informed ecosystem in terms of responsible tourism policies and training
requirements. Over the years, Airbnb inked deals with the tourism departments
of Goa, Maharashtra, and a few Northeastern states to boost hinterland and
homestay tourism and enable capacity building of hospitality entrepreneurs in
the states.
It has also signed a Memorandum of Understanding (MoU) with National Skill
Development system, in an agreement with Prime Minister it has decided to
create a database of 50,000 hosting entrepreneurs for penetrating in the
underserved parts of the country.
Micro-entrepreneurial hosts on Airbnb, who self-identify as women, collectively
earned over $12 million last year. In fact, the company recently partnered with
Sheroes — a New Delhi-based women’s networking and enabling platform — to
grow its community of women hosts in India. It also has a partnership with the
Self-Employed Women’s Association of India, which represents about 2.1 million
self-employed women.
The company has harped the correct tune for the price-sensitive domestic user
base but keeping the quality in mind. The Bollywood actors like Saif Ali Khan and
Kareena Kapoor have promoted Airbnb and that has also proved to be an
effective marketing strategy of this American start-up.
For conscious Indian travellers, Airbnb showcased 'Superhosts', which are
consistently good-rated properties, helps travellers gain confidence while
booking. This also makes hosts work hard to gain good ratings on Airbnb's review
section.
The company has identified India as one of the most strategic markets this
decade, and with reasonable pricing, trusted hosted, beautiful properties across
untapped terrains and giving a feel of living like a local has been important in
launching this brand to success in India.
Future initiatives

As per the interview given to the Financial Times in October 2023, Airbnb will
venture beyond its core travel business. Starting next year, the online rental
platform will expand into longer-term housing rentals and enhance its
experiences and services offerings like “dining pop-ups” where the host shares
the local meals with the guests.
The Airbnb CEO believes that there’s an untapped market for rentals lasting up
to a year, citing the shift towards remote work and extended stays. While only
18% of gross nights booked in the second quarter of this year were for stays
longer than 30 days, Chesky sees great potential in extended stays. This
strategic shift comes as Airbnb faces scrutiny from regulators globally over its
impact on housing availability in major cities restricting short-term rentals.
The new improvements are incremental and largely designed to benefit guests.
They revolve around five common pain points, from affordability to customer
service. On the cost side, the promise is to show consumers total prices per
listing including transparent and lower additional service charges, a subject of ire
—while giving hosts insights that ensure competitive nightly rates. Moreover, a
new listing verification system is reducing calls to customer service by
identifying and removing fake listings, and search was improved with new filters
for king-size beds and pet-friendly homes. Consistency and reliability have
become an enormous Achilles heel for Airbnb, the system which started off as a
disruptive tech platform where adventurous travellers could buy and sell
products, process secure payments, and leave reviews is facing issues scaling.
So, for now, the CEO aims to focus on providing the foundational pillars for
Airbnb – affordable prices, reliability and proper customer support. To provide
affordable rates lower than hotels and ensuring bottom line for the hosts, they
intend to provide the hosts with dynamic pricing insights.
Airbnb is applying the AI technology for quality control purposes; hosts are being
asked to submit both interior and exterior photos-these are put into a system
that uses computer vision technology to read the photos and match them up
with other databases to create a confidence score. The AI technology can be
used to vet guests, too- Throwing house parties in Airbnb rentals violates the
platform’s policies yet remains a common issue for hosts. If an attempted
booking raises flags, he adds, “we either stop them or we ask them for more
information”.
While compensating for short term rentals, the platform has started facilitating
“experiences” where people post not rooms but services such as guided tours,
bar crawls or photo shoots.
Some unconfirmed reports also suggest that Airbnb venturing into peer-to-peer
car rental services as an extended offering beyond their core.