Airbnb Experiences has not quite lived up to the fanfare that accompanied its launch a year ago, and this week Leigh Gallagher, author of The Airbnb Story, interviewed CEO Brian Chesky to ask about its slow growth.
Jasper is joined by Hostfully VP of Strategic Partnerships, Nicole Prentice Williams, to discuss whether it’s fair to compare the growth of the platform itself with the progress of Experiences. They also cover Chesky’s response to the #metoo campaign and the new responsibilities of another Airbnb co-founder, Nathan Blecharczyk as he takes over operations in China.
While business may be rocky for Airbnb in China, it is booming in Africa, and headlines this week applaud the growth on the continent and the platform’s partnership with leadership in Cape Town. Nicole and Jasper also share the heartening story of a guest who painted an epic mural in a host’s apartment in Tokyo in exchange for a free stay!
- Airbnb Experiences launch one year ago
- Only 3K experiences vs. 4M homes
- Unfair comparison, keeping small on purpose
- Earned 500K from social impact experiences
- Homes business had no traction one year in
- Experiences has 3K hosts, tens of thousands on wait list
- Difference between new marketplace and established media machine
- ‘Experiences’ is buzzword in industry
- Certain Experience hosts earning six figures (most earn 7K)
- Chesky expecting Experiences to be big
- Ultimate goal to become one-stop shop for travelers
- Head of China business gone after four months
- Search lasted longer than held post
- Unclear why, seems to have been his decision
- Airbnb not commenting
- Co-founder Nathan overseeing operations
- Shows importance of Chinese market to Airbnb
- China is difficult market for startups
- Host in Tokyo learned guest was artist
- Asked to create mural on white wall
- Epic resultsAirbnb could do coffee table book of unique stories
Article #5: Airbnb CEO: ‘We Need More Women Leaders’
- Chesky commented on #metoo campaign
- Proposed solution of having more women in leadership
- No women on board of Airbnb (6 of 8 members are white men)
Article #6: Airbnb Enjoys Spectacular Growth in Africa
- Africa is fastest growing market
- 100K listings
- Cape Town most popular (17K listings)
- Mayor working with Airbnb
- 2M guests in last five years
- Hosts earned $139M last year
- South Africa has most listings
- Morocco comes in second
- 325% growth in Nigeria
- Airbnb conscious of social issues
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Complete Transcript for Get Paid for Your Pad Episode 199
Welcome to “Get Paid for Your Pad,” the definitive show on Airbnb hosting. Featuring the best advice on how to maximize profits from your Airbnb listing, as well as real-life experiences from Airbnb hosts all over the world. Welcome.
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Jasper: Welcome. Another news episode of “Get Paid for Your Pad,” and today I am co-hosting with Nicole Williams, who is the VP of Strategic Partnerships of Hostly. So, Nicole, welcome and good morning in California.
Nicole Williams: Yeah, thank you, and good late evening to you, Jasper. Thanks for having me back.
Jasper: Yeah, as much as I love Asia, scheduling calls with California is a real challenge. It's either, like-
Nicole Williams: Yeah, probably one of the worst parts.
Jasper: Yeah, it's either, like, eleven or midnight, or it's like seven in the morning.
Nicole Williams: Yeah, yeah. Very tough. Thank you for staying awake for me.
Jasper: Yeah, yeah. No worries, no worries. It's all good. I've been having a lot of fun the last couple days putting up my videos for the video log that I started on my YouTube channel. It's really been a lot of fun.
Nicole Williams: Congratulations. That is awesome and ambitious and wonderful.
Jasper: Yeah, I just realized it's quite a commitment 'cause, first of all, I have to think about something to say, and then create the video. Usually it takes two or three times to get a reasonable video; I never feel like it's really good video, but at least it's something acceptable. And then putting it up there and writing an email and stuff … But it's fun, so I'm excited to keep it going.
And as I was doing some research about the whole vlogging thing because I didn't really know much about vlogging … But I looked at some of the most famous vloggers out there, and some of them have millions and millions of views for each video they publish, and these guys are doing it every single day. And it's just funny because I looked at one of the most famous ones, and his recent videos are really cool, they're really well done, and it's very professional, you could tell. But then I kind of scrolled through and watched his first one that he did four years ago, and it was a whole different story: this guy was really shy and didn't really know what to say, and so that gives me some encouragement that over time I'll get pretty good at it, as well.
Nicole Williams: Yeah, you will. It just takes practice. Just like being in the television business when we would get new people coming on camera, and then after a while they were our go-to pros because they just picked it up quickly. So just keep doing it every day.
Jasper: Practice makes perfect.
Nicole Williams: Right. Absolutely.
Jasper: Alright. Let's dive into this week's Airbnb news. I would say the most interesting article that came out was an article on Fortune.com. It's an article published by Leigh Gallagher, who's also known as the author of “The Airbnb Story,” which is a really cool book about how Airbnb became such a big company … I guess she has a good relationship with Brian Chesky because she always manages to get interviews with him, and this time she interviewed with him about the Experiences. You know, Experiences … It's been about a year now, I guess, since it's been launched, right? It was launched in November, 2016 at the Airbnb Open in Los Angeles, if I recall correctly?
Nicole Williams: Right, right. About 30 minutes down the street from me.
Jasper: Oh, right. Yeah, you're in Los Angeles. I always think you're in San Francisco.
Nicole Williams: Yeah, it was here. That was very exciting; they pulled out all the stops for that. Yeah, I mean, she's saying it's still relatively small, and I think he's defending that it's small and saying that it's purposefully … they've been keeping it small. I mean, it's also … Airbnb's been around ten years or almost ten years, and Experiences has been around one year, so it's … Of course, it's not going to be as big. But I guess the number is … There's three thousand experiences compared with four million homes, is what she was comparing it to in her article, but I don't really think you can make that comparison. I kind of agree with him.
Jasper: Yeah, well, there's a number of arguments that he's making. First of all, he says they've earned about a half a million dollars from social impact experiences. Now, I don't think those are all the experiences; I think the social impact experiences are kind of a subset of the total amount of experiences that are out there, but I think there's something to be said for both arguments. She's kind of … saying, like, “Well, no one's really talking about it; it doesn't really seem to be taking off.” And he's saying, “Well, you know, when our homes business was one year old, we didn't have any traction. And now, with Experiences, we already have three thousand hosts, there's ten thousand people in the waiting list” … Or “tens of thousands of people,” to be correct. Brian is definitely expecting a lot of it.
Now, I do think that the comparison between the Experiences being one year old and the home business being one year old back in 2009, I guess … I guess that comparison doesn't really hold either because, when you're creating a new marketplace, it's very, very tough. If you're starting from scratch, and you have no capital … At the beginning, nobody wanted to invest in Airbnb. These guys are selling serials to get by.
Nicole Williams: No publicity. There you go. I mean, these guys are media machines now.
Jasper: Exactly. I mean, you can't really compare … That's like comparing not even apples to pears; it's like comparing apples to … a whole vineyard or something.
Nicole Williams: Yeah. Exactly.
Jasper: We have 50 million people on the Airbnb platform and billions of dollars in the bank … Yeah, it's a little easier to launch a new feature than to build it all from scratch.
But anyway, the other point that he makes, I think, is very valid: he says they purposefully kept it as three thousand Experience hosts, and the reason that they did so is that it's a different business, so they really want to make sure they understand it first. They … They're very hands-on when it comes to the management. They … have an application process. They're in touch with all the hosts to see how they're doing; even if there's somebody who leaves a less than five stars, they contact the host to see what went wrong, what's going on. That makes sense. You want to really learn and make sure you get it right first before you go full-on with the expansion.
Now, when they were doing the homes, of course, they didn't have that option because if you're trying to build a start-up, then growth is the most important metric that the investors will look at. So you can't really … You don't really have the luxury of saying, “Hey, you know what, let's have a thousand hosts, and let's spend a couple years figuring out how this business works,” 'cause by that time you run out of money. I think that makes sense.
Nicole Williams: Yeah.
Jasper: -to notice, as well … Oh, sorry. You go ahead.
Nicole Williams: Oh. No, I was just going to say maybe it hasn't caught on with the customers and people aren't talking about it as much as maybe they anticipated or predicted, but I just got back from the Vacation Rental Managers Association in Orlando … It was last week. And I can tell you that in the industry … In the vacation-rental, short-term industry, it's a buzzword. It's a big buzzword: it's all about Experiences, creating them for your customers. It's not necessarily another source of revenue for some of these smaller businesses, but in every little way, when guests are coming to their vacation rentals, it's … Creating an experience is definitely at the forefront of the industry at this point, it seems like, from what I could gauge there.
Jasper: Interesting. How was the conference?
Nicole Williams: Oh, it was fantastic. It was their National Conference. We had gone previously to the Eastern and Western Regionals, but the National was just another playing field: lot of high energy and big volume and … It was great. It was good for us as a company to network, and I would highly recommend to everyone out there to attend at some point if they can.
Jasper: And this conference is only for vacation rental managers … Are these managers that manage multiple listings, that have companies, or can individual hosts go, as well?
Nicole Williams: No, not for individual hosts, but I … It seems like with Airbnb launching their Vacation Rental Management page–which they announced–and all their services, that this might apply more and more to listeners of the podcast if you're managing multiple … But not necessarily for individual hosts.
Nicole Williams: That's still good that they're going … Hopefully, they'll be having the … I think they already slated Airbnb Open for next year. Is it Australia? Is it Sydney? Did I get-
Jasper: That's the … That's the word on the street.
Nicole Williams: Yeah. That's definitely the go-to for the individual host, but for multiple listings, highly recommend VRMA.
Jasper: Awesome. Well, just to finish up on the article. A few other interesting things is that he mentions that there's a bunch of hosts earning between one hundred thousand and two hundred thousand dollars a year, which is ten times what he actually forecasted himself. He says, “Most hosts on Airbnb earn $7,000…they're more occasional…” So he's saying that, when you're renting out your house, most people are doing it part-time; they're doing it when they're on holiday, when they're out of town, people renting out the spare room. But there's a number of people that are doing the Experiences on a full-time basis, and apparently some people are making six-figure incomes with that. I'm pretty sure that's the vast minority, pretty sure he's kind of cherry-picking with his examples here, but, still, that's pretty crazy to imagine that you could make-
Nicole Williams: Well, is that a profit? Is that profit, or that's total revenue, too? I mean, I don't know if they're … They're maybe taking in a hundred, two hundred thousand a year … How much are the paying for the Experience, too? But you're right: it's still a big number. It's still a big number; it's just curious what the cost of that is.
Jasper: Yeah, one of the examples is two chefs in Florence, in Italy. They have an experience where they pick up people at the train station, they take them to their house, and they learn how to make pasta at home. And they cook together, and they eat together, and I can definitely imagine that there's people who would be willing to pay a decent amount of money to have that type of experience. I guess if you do it every day, you get a couple customers, you create this experience, and you get enough people to keep you busy every single day, then it's possible to make that type of money.
Nicole Williams: Yeah, absolutely.
Jasper: Alright. Well, let's see … The last thing I want to mention is … So Brian Chesky's really expecting a lot from the Experiences. He really thinks it's going to be big, and also he mentions that Airbnb's overall strategy is really to do what Amazon did to retail: they want to be a one-stop shop to travel. And they're looking at about one hundred services that they could potentially offer in the future. It's exciting to see what they will come up with in the future and if they can really become that one-stop shop for travel or if it turns out that they should stick to their core business, which is, of course, the homes.
Nicole Williams: Yeah. It'll be interesting to watch, for sure.
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Jasper: Let's move on to the next news article. Well, I remember four months ago, we talked about the fact that Airbnb appointed a new head of Airbnb's China business. Now, four months later, he's already gone.
Nicole Williams: Yeah. Oi.
Jasper: That was a short event.
Nicole Williams: I think the search lasted much longer than he was actually even there holding the post.
Jasper: Yeah, yeah. Exactly. So he's left. It is not completely sure why he left and if he left on his own account or that he was fired. I think you mentioned that it seemed like it was his own decision, was it?
Nicole Williams: Mm-hmm (affirmative). Yeah, seems like it. I was searching his name. A bunch of the news articles … It's like he pulled the plug, it sounded like, is the way it was written. So … Yeah, Airbnb's not commenting, so I don't know if we're going to get more details on that or not, but if it was Airbnb that was pulling the plug, you'd think that they might have somebody already kind of teed up there to oversee it because now it looks like co-founder Nathan is going to be overseeing that region.
Jasper: Yeah, it's … The article … Well, it's interesting because that news article about Nathan came out a couple days ago, but the article states that “the firm's current regional director for the Asia Pacific region will take over the role in an interim capacity.” But then, as you mentioned, a couple days ago, October 19th, there's an article that came out that Airbnb is announcing that Nathan Blecharczyk will become chairman of Airbnb China, so I don't know exactly what that means … What the difference is between the head of Airbnb's China division and chairman of Airbnb China.
Nicole Williams: Yeah.
Jasper: I don't know what exactly what that means, but-
Nicole Williams: It probably means somebody's on the ground there and somebody's not. Somebody's overseeing from San Francisco.
Jasper: But it's kind of sounds like they knew this guy was going to leave, and it kind of shows how important China is to Airbnb that they're sending their co-founder now to oversee the operations. But still, I feel like they're … How do you say that? The odds are kind of against them because there's just very few examples of start-ups that been successful in China. I mean, we all know that the Chinese government, as well as the Chinese consumers, they tend to favor Chinese companies, and so it's really hard for these foreign companies to do really well; plus, they have all these competitors. One of them raised three hundred million dollars a couple weeks ago. Well, definitely the fact that the guy who was in charge for them in China is now leaving after four months is definitely not a good sign, I would say.
Nicole Williams: Yeah, especially when they were so excited to bring him on board; it was a big announcement, and they were searching a long time. So yeah, it's not a good sign at all.
Jasper: Well, there was a article in the Lonely Planet about an Airbnb host in Tokyo, Japan who found out that one of his guests that was staying at his place was an artist. And so he sent a message, and he said, “Do you know what, I would really love if you could, while you're staying at my place, if you could maybe create a little bit of art on my wall.” So the guy had a white wall that he wasn't using and also his door that … He wanted to have something on there. The artist really took that to heart and created a pretty amazing piece of art, I have to say. It looks pretty epic. And so the host offered him a free stay in return. Have you seen the pictures?
Nicole Williams: Yeah, it's amazing. It's really incredible.
Jasper: Yeah, it's-
Nicole Williams: Very lucky, lucky host to have such a talented guest.
Jasper: Yeah, absolutely. Well, when I first saw the headline, it says “This Airbnb guest left behind an incredible mural” … Did I pronounce it right? … “on the host's wall.” Initially, when I saw the headline, I thought, “Okay, this wasn't coordinated. This is something that left-”
Nicole Williams: Right, right. I was thinking the same thing.
Jasper: And … But then, as I read the article, I realized that the host actually asked him to do it, so … Anyway, I thought it was kind of cool. The article on the Lonely Planet.
Let's see … What else do we have going on?
Nicole Williams: This would be … This is kind of, like … These are the quirky things from Airbnb that it would be so cool if Airbnb kept track of and had some Airbnb historian, and they created some coffee table book with all these amazing … kind of interactions or things that happened between hosts and guests and … You know, like the love story that we talked about before that happened in Detroit and … I would just love to see an Airbnb coffee table book.
Jasper: Yeah, that would be really epic.
Nicole Williams: Yeah, cool stuff.
Jasper: I'm sure everybody has seen the #metoo posts on all the social media, and Leigh Gallagher … I guess she did pretty extensive interview with Brian Chesky 'cause she also asked him some questions about what he thinks about all the controversy. So there's an article where Brian Chesky actually states that he thinks that one of the solutions or something that would contribute towards a solution is to have more women in leadership positions in the company. So I was reading this article, and he literally says, “I work every day. I work really hard to get more women on the board,” for example. And so I was just curious to see how many women there were actually on the board of Airbnb, and I was kind of surprised to find out that the number was zero.
Nicole Williams: Yeah, eight board members: six of them are white men.
Nicole Williams: There you go. That's not diversity.
Jasper: No, not really. Well, I mean … And … I think for any position, they should always hire the best person, I'd say. Whether that's a woman or a man or whatever skin color, in my opinion that doesn't really matter; it's … you just want to get the most qualified person. But it's kind of interesting that he's just kind of providing lip service by saying, like, “Yeah, you know. I think we should have more women” and “We're doing all we can” and “I'm working really hard to get more women on the board.” And then it's kind of weird to see that there's … actually not a single woman on the board right now, so …
Nicole Williams: Yeah, you're right. It's absolutely … What leg is he standing on? I don't understand. I don't know. Maybe somebody will put him to his words; that's the best we can hope for there, I guess.
Jasper: Yeah, I guess so, too.
What else has been in the news? There's a bunch of news stories about Africa. Now, Africa is, I guess, one of the fastest growing markets around the world in terms of percentages. Back in 2012, there was hardly any listings, and now they're up to about a hundred thousand. They've made an agreement with the city of Cape Town. It's one of the most popular places in Africa for Airbnb guests to go; it has 17 thousand listings, so that's quite a bit. One of the co-founders was down there … Or was it the head of Public Relations, maybe, was down there? And so they're doing a big tour. The South African government and the mayor of the city of Cape Town is very excited to work with Airbnb, so that's … It's good to hear some positive news on sort of the cities and Airbnb because a lot of the times it's all about restrictions and “They're trying to shut it down,” et cetera. So that's good news.
In the last five years, more than two million people have found holiday accommodations through Airbnb, and African hosts earned one hundred … no, 39 million dollars last year, according to new Airbnb study.
Nicole Williams: That's great. That's awesome. I wonder if they're going to have to go through a … executive search to find somebody to oversee that region. I hope they have better luck.
Jasper: Yeah. That's funny. I got … I'm looking at some graphs, as well, where it shows how Africans are benefiting from Airbnb. South Africa has by far the most amount of listings, about 45 thousand or so. And then number two is Morocco, which is interesting. That's all the way on the other side of the continent, so I guess that most of the listings are either all the way in the south or all the way in the north. And then Kenya, Tanzania, and Nigeria are mentioned, as well, but those are … all have much lower amount of listings.
Nicole Williams: Yeah. In Nigeria, 325 percent growth over the past year; that's the fastest growing country. That's amazing.
Jasper: Yeah. Well, it's the fastest growing, but it looks like the amount of listings is extremely small, though.
Nicole Williams: Very small.
Jasper: It's like if you grow from one to ten, that's like, “Wow, one thousand percent growth!”
Nicole Williams: Yeah. Put it in perspective, Jasper!
Jasper: The other thing Airbnb is doing is they're really paying attention to now the social problems in these countries; they're putting some money into social projects and trying to educate younger people in the bad neighborhoods in Cape Town, as well. So they're definitely trying to do some good in South Africa.
Nicole Williams: Very cool.
Jasper: Alright. Well, with that, we've come to the end of this episode. Time always goes so fast.
Nicole Williams: It was fun, Jasper. Good stuff today.
Jasper: Absolutely, Nicole. And I wish you a good day. I'm going to pass out; I'm going to go to sleep. Tomorrow, there will be another day … another video. Look forward to chatting to you again in a couple weeks.
Nicole Williams: Alright. I'll be watching your videos.
Jasper: Awesome. And for the listeners: thanks for listening. And, of course, go check out my videos on YouTube. If you want to keep updated, you can also subscribe to my email list; I'm sending out daily email these days. Might be a little bit too much for some people, but if you are interested, then go ahead and sign up at getpaidforyourpad.com. And with that, we've come to the end. Thank you for listening, and see you next time.
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