India is an exciting new market; population, smartphone penetration, GDP growth important to our business: Airbnb CEO and cofounder

CEO and cofounder of Airbnb, Brian Chesky

The desires of Indian travellers are universal and transcend cultural boundaries; people in India want authentic experiences, to connect with others around the world, to travel, to stay in homes, and to save money, believes CEO and cofounder of Airbnb, Brian Chesky.

“India is an exciting new market for us, our business is doing exceptionally well,” Chesky told The Economic Times.

He also added that, although Airbnb’s penetration in India is much lower than in more mature markets like the US, he believes that the company, which offers peer-to-peer lodging service, is just scratching the surface of what is possible in India.

“There is no reason to think that Airbnb couldn't be as popular in India as it is in the US. Overall nights booked in India have grown by 70% when comparing full-year 2022 with pre-pandemic 2019, while domestic nights in India grew by almost 110%. This growth is largely due to the domestic market,” he said.

Pointing out the advantage of being the most populous country in the world, Chesky said that India will soon have one of the biggest middle classes in the world, hence, he believes it will be one of the biggest growth markets, if not the biggest, in this decade.

He also highlighted how smartphone penetration and GDP growth are important to Airbnb’s business in India. “The real opportunity, I think, will be when the Indian middle class emerges, particularly younger travellers who want to experience the world. Airbnb is a great way for them to do that for the first time. What I find especially exciting about India is its robust culture of hospitality. It is a unique aspect of Indian culture that I believe will only help to further our business growth in the country,” he told ET.

The company posted revenue of $8.4 billion, with a 40% year-over-year growth. Net income stood at $1.9 billion, making the company’s most profitable year ever, as per ET’s report. To this, Chesky hailed Airbnb’s versatility and flexibility to cater to nearly every type of space, geography, and price point.

“The flexibility has enabled us to adapt to changing travel trends and remain relevant in the market.”

He also added that despite economic headwinds, people still have a strong desire to travel and connect with the world. “We have seen an increasing number of people travelling across borders and domestically, to urban and rural areas, as well as national and state parks. Another important trend we have noticed is that people are seeking authenticity and human connection in a world that is becoming more artificial,” he said.

When asked if high inflation and geopolitical uncertainty is changing consumer behaviour in travel, he admitted: “A little bit.”

“Despite the challenges posed by the Covid-19 pandemic and rising inflation, the travel industry has proven to be more resilient than many expected. People still have a strong desire to travel, and this has been reflected in Airbnb's strong business performance,” he said.

The 41-year-old CEO also brought to notice that affordability has become an even more critical consideration for travellers as inflation is affecting the cost of travel, hence people are looking for more affordable options. “This was one of the driving factors behind our focus on Airbnb Rooms, which offers a more affordable option for travellers,” he said.

With respect to the growth areas for investments, the company is looking for international expansion in Asia, especially in India. “China, India, South Korea and Japan within Asia are big opportunities. I think some parts of Africa will be interesting,” he told ET.

“The great thing about our business is it's a highly capital-efficient business. Networks aren't very expensive to scale. So, I don't foresee us having to dig too deep into the cash reservoir anytime soon. But we're always going to be open-minded. Maybe there will be a capital-intensive opportunity where we might want to use the cash flow or a big acquisition. We haven't seen it yet. But we might,” he concluded.