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BW Businessworld

Hospitality: Guest Services 2.0

In an increasingly digitised world, the Airbnb chief is looking for the human element to boost his hospitality venture

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Since coming into power, the Trump administration has taken a series of seismic immigration and travel directives to keep away what US President Donald Trump tweets, to be the “bad” out of America. It seems like President Trump doesn’t like globalisation. The assumption is that globalisation has increased security threats and the threat of job loss to the average American.

On a humid evening at a cozy, yet posh, gathering attended by Delhi socialites, fashion designers and Airbnb loving celebrities such as Sonam Kapoor, Airbnb co-founder and CEO Brian Chesky, said, “We have a President [Donald Trump] that thinks globalisation is the reason America is losing jobs. There is a much more powerful force that will destroy jobs. Automation will take over so many jobs and I don’t see that happening only in America.”

On his maiden visit to India, the $3.8 billion-worth entrepreneur, referring to how automation may lead to redundancy, said, “We may have products with the label ‘Made in America (by robots)’. So, we will need to find jobs that only humans can do.”

Chesky is on a frenzied journey around the world promoting Airbnb’s travel experience feature called Trips. On 23 March, Chesky tweeted, “We have crossed 24 time zones in 19 days. Now to Beijing. #AirbnbTour2017”. Officially launched in November last year, Airbnb Trips offers services promoting the cultural essence of select cities such as Havana in Cuba and Cape Town in South Africa. On that increasingly humid evening of 19 March facing the ancient Qutub Minar, Chesky announced that Delhi will be the newest addition to the list of official ‘Trip’ cities. There are currently 15 curated experiences that Airbnb is offering as part of the package. A user can select anything from a tour to a sari school, a studio session for some classical singing, or even a visit to the design workshop of designers Shantanu & Nikhil.

During the short time Chesky is spending in each city as part of the tour, he stamps down his message — travel is about experience; that experience should be magical and easy. Till now, Airbnb only monetised a traveller’s accommodation experience. This, no doubt, has served Airbnb quite well.

Reuters says the company which was launched in August 2008, became profitable on EBITDA (earnings (before interest, taxes, and depreciation) basis during second half of 2016. Quartz reports that the company is projecting EBITDA of a “whopping $3.5 billion” by 2020.

Now, Airbnb will be further monopolising the travel experience by adding the Trips feature. Using the ‘automation will lead to job destruction angle’, Chesky is encouraging people all over the world to not only list their homes, tree houses and castles on, he is also asking people to come on board if one has a special talent or a yen for acting as a tour guide to a traveller curious about one’s city. “Only that human experience can make a trip magical.”

India plays a large role in Airbnb’s future growth. Chesky said that in the next decade or so, the country will be one of its biggest markets. “Ten years from now, India will become one of the largest communities worldwide, and I couldn’t have imagined a better visit than this one,” Chesky wrote in a Facebook post after meeting Prime Minister Narendra Modi.

Right now, of the 3 million or so Airbnb listings worldwide, India has less than 1 per cent (less than 30,000 listings) while China has about 80,000 listings. While India will become an important market in the next decade, China is a more immediate market for Airbnb to clamp down on. After Delhi, Chesky and Co. landed in China to announce the launch of Trips in Shanghai. Airbnb is doing all that it can to succeed in a country where even Uber failed.

In a tweet, Chesky wrote, “Airbnb is committed to succeeding in China, and we now have a Chinese name, (Aibiying), which means “to welcome each other with love.”

What was once called Airbnb China has now been rebranded to better resonate with the Chinese; a strategy to take the fight to its rivals in that very lucrative market.

With its unique ‘Trips’ positioning appealing to everyone to get on to Airbnb as a home entrepreneur of sorts offering a cultural experience, the accommodation startup is likely to win the race automation has had a head-start in.

The company, now worth $31 billion, is a more valuable accommodation chain than Hyatt or Hilton. Only one brand — Marriott International at $33 billion — has a slightly higher valuation than Airbnb.

If Airbnb’s Trips gains a positive reaction from consumers like it does from investors who continue to put billions of dollars into the company (Chesky won’t ever have to go through the pains of going public — Airbnb meant to raise $850 million but got a billion dollars in its latest funding bout announced in early March 2017), then we will probably see Airbnb sitting pretty at the top sipping some celebratory champagne served to order by the best (robot) in town.