The idea came to Brian Chesky and Joe Gebbia in 2008 when they found it difficult to make the rent for their loft in San Francisco—they rented out one room to upto three guests with breakfast thrown in.
Their success with the bed-and-breakfast (B&B) led the two Rhode Island School of Design graduates to found Airbnb Inc. in San Francisco as an online platform meant to connect owners of property and vacationers in need of accommodation. That idea has been extended—it also connects owners of assets such as automobiles and consumers who need such things and would rather rent than buy. Despite reservations, the company has been racking up growth in India.
The concept is known as the share economy—it helps owners monetize their assets and consumers save on money.
The company now has 300,000 property listings in 192 cities across the world. Last year, Airbnb logged 12 million guest-night bookings globally and earned an estimated $150 million in revenue. It has been cited as among the most promising startups in the US.
In the past one-and-a-half years, 70% of the company’s transactions have been from outside the US, prompting it to look beyond its home market to drive future growth. India is among its most promising markets, Gebbia said in a telephonic interview during a recent visit to New Delhi.
Airbnb, which charges a fee of 3% from the renter and 6-12% from the traveller depending on the price of the accommodation, has had a significance presence in India since 2011 and is seeking to expand in the country, Gebbia said. In India, its property listings rose to 4,500 in 2012, up about fourfold from 2011.
“If we look at numbers, it is evident that the Airbnb model is successful in India,” said Gebbia, chief product officer. “We have seen an increase of 733% in the number of guest- nights booked in India over the last year.”
Outbound travel from India saw an increase of 313% in guest-night bookings in the period from January 2012 to January 2013. The company refused to disclose absolute numbers.
“People are sharing all kinds of things, from private rooms to private apartments to cars, in India. We are seeing how people are getting very creative in India on this platform.”
While the base is low, Gebbia said the company was experiencing “hyper-growth”.
“In terms of goals, over the next 12 months, we expect to triple (the) number of listings in India. Our data shows us (that) when supply grows, demand follows,” he said.
To be sure, the share economy’s potential may be limited in India.