Airbnb, the U.S. sharing economy platform, is seeking to revive its struggling business in Thailand by turning to domestic tourism, while providing some relief to thousands of landlords on its nationwide platform.
Airbnb reported 2.5 million guests at its users’ properties in Thailand last year via 99,000 listings, before facing massive declines in bookings this year due to the Covid-19 pandemic. closures and travel restrictions.
Bloomberg reported that the company saw revenue drop 67% in the second quarter, from US$1 billion in 2019.
The company, which plans an IPO this year, does not provide specific data. But Airbnb has seen a resurgence in domestic tourism in Thailand in the post-lockdown period.
From May 31 to June 6, the number of domestic bookings (by local residents) jumped 13% year-over-year.
As 92% of Airbnb customers in Thailand last year were from overseas, the company’s user base has likely shrunk significantly since the ban on international travelers in March.
“We are seeing a recovery in our business, but we are seeing our business taking a different shape, from international travel to domestic travel,” Mike Orgill, director of public policy for Asia-Pacific at Airbnb, said during an interview. media roundtable in Bangkok. “We are excited that countries are able to resolve the broader Covid crisis and reopen some of these travel corridors and will see Airbnb’s business adapt to the change.”
The company has come under fire from hotel groups who accuse it of circumventing local regulations by allowing the platform to be used by tenants of homes without a hotel license.
Airbnb responded by lobbying the government, asking for clear regulations that would allow this new short-term rental business model without becoming a burden on its owners.
The company works with Thai authorities like the Local Government Department and Community Development Department to promote local tourism.
It also worked with the Ministry of Tourism to provide additional rooms for the 2018 Moto GP of Thailand at Buri Ram, which coincided with a partnership between the ministry and Grab Taxi, a technology company in similar legal limbo in Thailand.
To help those offering rentals on the platform, Airbnb has relaxed its cancellation policy, removing penalties for cancellations that previously could jeopardize host privileges.
The company also offers $5,000 grants to its “superhosts” or hosts with a high booking rate and good review rates.
Airbnb is touting the positive impact it has had for Thailand through an economic impact report by consultancy Oxford Economics.
The report said Airbnb guests and hosts added 43.7 billion baht to Thailand’s GDP, which was calculated based on estimated tourism spending by its guests.
However, the report only considers gross tourism expenditure.
“When we talk about Airbnb guest spend in the study, we’re not just referring to the amount spent on Airbnb, but the broader spend guests make while staying here,” said James Lambert, director of economic consultancy. at Oxford Economics. “The majority of spending came outside of rentals through the retail sector, restaurants and other non-lodging services.”
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