Airbnb International Growth Strategy
Founded in 2008 in a San Francisco apartment, Airbnb, the second most-valuable private startup in the U.S. with more than 5 million listings in over 191 countries, continues to expand aggressively into emerging markets. This global growth is increasingly being powered by tourism to destinations in emerging markets. The world’s fastest-growing tourism destinations are almost entirely located in emerging markets, and Airbnb search data shows that guest demand for emerging markets is increasing rapidly.
In 2017, the company posted $100 million in profit on $2.6 billion in revenue. It’s valued at a $31 billion valuation. The amount of total guests using Airbnb has surpassed 400 million guest in 2018. In 2013, there were nine city regions with at least 100,000 Airbnb guest arrivals; in 2018, there were over 350 city regions with at least 100,000 Airbnb guest arrivals.
Russia and Brazil were the first psychically distant locations Airbnb expanded to. Following these expansions, Airbnb expanded to Australia, the second largest Airbnb market behind the United States, in 2012 with a plan to consecutively expand into Thailand and Indonesia. To support this effort, Airbnb opened its 11th office in Sydney. The Australian consumer accounts for one-tenth of the Airbnb user base. Weeks after announcing the focus on Australia, Airbnb announced its strategy to move more aggressively into the Asian market with the launch of their newest headquarters in Singapore.
Airbnb has seen strong growth in South Korea and Singapore and is looking to invest more across the region. The company’s goal is to acquire an additional 2 million properties within the continent. Following the Obama administration’s easing of restrictions on U.S. businesses to operate in Cuba, Airbnb expanded to Cuba in April 2015, making it one of the first U.S. companies to do so. To comply with current U.S. regulations, the Airbnb platform in Cuba is currently only open to licensed U.S travelers, but the company plans to seek authorization to support non-U.S. travelers in the future.
Airbnb also continues to expand quickly in the world’s two fastest-growing large economies: India and China. According to data from the UN and the IMF, India and China led all large economies in GDP growth in 2018.7 Airbnb has seen continued growth in India and China.
Airbnb’s expansion into China is an accomplishment. “The number of Chinese guests staying in Airbnb properties around the world increased 700 per cent last year, growing faster than the number of guests from any other single nationality. When we see this growth and hear the stories from our community, it is clear that Airbnb is uniquely positioned to connect Chinese guests to amazing travel experiences. And as we move into our next phase of expansion in China, we know we will need deep local knowledge and expertise to keep this momentum going.” said, co-founder and chief executive of Airbnb.
After backing out of a deal with Chinese home-sharing leader Tujia in 2017, it has built its own team of roughly 300 local employees. Last year the company appointed a local president in seasoned entrepreneur Tao Peng and Airbnb co-founder Nate Blecharczyk is personally leading the charge as chairman of the China operation.
Today, Airbnb is available in 30 different languages, allowing it reach users around the world. Like many U.S.-grown businesses interested in global revenue, Airbnb has made sure to invest in the translation and localization of its brand and its services. “People from over 150 different countries travel on Airbnb, so it is important that we are both international and local at the same time. Because of this, we’ve taken many steps toward localization, one of which is translation.” said Jason Katz-Brown, an software engineer at Airbnb.
Airbnb engineers built up their own translation tool for translators to collaborate more efficiently. Whenever new content is added to the website in a given language, a notification is sent to translators, with the new translations going live automatically. The translations relied partially on crowdsourcing, but also on a network of professional translation agencies. Impressively, in 2013, the firm launched a functional Japanese version of their website at a week’s notice by prioritizing the most important translations instead of trying to convert the whole 400,000-word block of English content.
“The real challenge of global strategy isn’t how big you can get, but how small you can get,” said Dennis Goedegebuure, the former head of Global SEO at Airbnb. It’s a good point to keep in mind: when many developers launch a global strategy, they keep everything centralized. But the best localized content will always come from local partners. They’ve tapped into roughly 3,500 local photographers and videographers to produce the real-life photos that welcome and captivate visitors on the site. This guerilla-like tactic has made digitally re-creating global neighborhoods a possibility—and the result is a surprisingly realistic, evocative online experience for users.
Neighborhoods section of the site has around 580 pages, spread over 20 cities, and localized to more than 30 local Airbnb sites around the globe. Airbnb builds each neighborhood site, and then contracts with thousands of local photographers and videographers to provide the core content. This far-flung network of freelancers lets each neighborhood’s page develop a distinctive, authentic, and local feel.
Powering Airbnb’s Global Growth Report can be found here.