Airbnb’s fastest growing is in emerging markets – Quartz
Airbnb origin story is the material from which the dreams of San Francisco startups are made. When the company was founded in 2008, the first users began to share their homes mainly concentrated in American cities. Over the next 11 years, it grew into a global force with 5 million listings in 191 countries and 81,000 cities, according to the company.
And indeed, the company’s growth, both in terms of guest arrivals and its Experiences product, is increasingly being fueled by cities that are far from Airbnb’s origins. In a new report, the company noted that these so-called “emerging markets” are currently its 25 fastest growing countries for customer arrivals.
So what exactly is an emerging market? In its report, Airbnb uses a particularly broad definition attributed to the IMF, noting that “emerging markets [represent] these countries outside of the United States, Canada, Europe, Australia, New Zealand, Israel, Japan, Singapore and Korea. (It should be noted that the IMF’s tendency to divide global economies into two categories—Emerging and advanced — was judged problem (paywall) by some investors and economists.)
“In recent years, the Airbnb community has exploded in emerging destinations around the world, particularly those in Asia-Pacific, Africa and Latin America,” noted Airbnb. Currently, over 30% of the ads on the site are in these regions (including the Middle East). By 2030, they expect more than 400 million users will have checked into an Airbnb in an emerging market since 2008.
Airbnb’s growth in these regions is part of a larger context of global movement. According to the UN World Tourism Organization (UNWTO), cited in the Airbnb report, emerging economy countries experienced growth in international tourist arrivals about 3% higher than advanced economies in 2018 The UNWTO predicts that Ecuador, Vietnam, Colombia, Peru and Nepal recorded the fastest growth in arrivals in 2018.
Within a decade, UNWTO predicts that more than a billion tourist arrivals will occur in emerging markets each year. This, of course, assumes that the general upward trend in growth in arrivals, fueled by the democratization of online travel and cheaper than ever before, will continue unabated into 2030. In reality, the effects of climate change and climate policy could have major impacts on the ability of humans to travel inexpensively and easily over the next decade.
Airbnb’s success in emerging markets is indicative of another global trend: it’s not only that travelers in Airbnb’s more mature markets are traveling more to countries in Africa or Asia, but also that more people travel to big countries like India and China. Airbnb noted that in 2018, 91% of traveler arrivals to China were from domestic travel (up from 66% in 2015), with Indian domestic travelers accounting for 78% of total arrivals in 2018.
It is true that, as Airbnb has matured around the world, they have also encountered more regulations and backlash from cities who are concerned about the effect the service can have on locals, and even the housing market. Ahead of its IPO, which is slated to take place in 2019, the company may be trying to show that despite these downturns, its customer base continues to grow, and even on a truly global scale.