Tech hospitality major Airbnb has been rapidly expanding its offerings with hotels being the latest segment added to its platform. Experts predict that in the next decade, it is poised to beat the biggest hospitality majors and some, such as Accor Hotels, have even tried to pick up a stake in the 10-year-old company, which has on its platform 4.5 million properties across 81,000 cities and over 300 million guests.

In India, despite facing regulatory hurdles, Airbnb is well on its way to make a mark with even branded room aggregators such as Oyo Rooms and Treebo Hotels now coming onto its platform.

In an interview, Amanpreet Bajaj, Country Manager, Airbnb, outlines the journey so far and what lies ahead in India for the world’s largest accommodation platform. Excerpts:

How have Indians taken to Airbnb so far compared to international travellers, who are more familiar with your platform? Are the numbers skewed more towards the latter in India today?

Home-sharing as a concept is picking up in India for travellers, especially hosts in cities beyond metros. The rise in personal income levels, a growing economy, affordable air travel and deeper internet penetration are leading to the emergence of a more adventurous Indian traveller.

In fact, almost a million Indians have travelled using Airbnb in the last two years — testimony to the new-age Indian traveller’s willingness to experience the world in unique ways, and how Airbnb is enabling this process of discovery.

Airbnb gives them the opportunity to discover the world differently. Going beyond logistics, travellers can choose to live like locals do, anywhere in the world. India also has a 230 million urban millennial population on the lookout for more exciting ways to travel that creates a huge demand in the market.

The success of Airbnb in India so far is reflected in the incredible growth we have witnessed among the host and guest community alike.

With over 30,000 listings in the country, Airbnb listings in India have grown by 115 per cent over the past year. Also, there has been almost 2x growth in the number of nights booked on Airbnb in India since 2016.

In the last year, we have witnessed 101 per cent YoY growth in inbound guests from around the world but Indian guests too have taken to Airbnb and we saw guests from India travel to nearly 160 different countries, including popular destinations such as France, Italy, the UK and the US. Closer home, we have also seen 2.1x growth in domestic travel taking place on Airbnb within India.

How is Airbnb in India helping women towards entrepreneurship since women hosts globally have earned almost $10 billion from the platform?

In India, in particular, an average Airbnb woman host earns $1,200-1,400 a year, which is double the income earned by an average Airbnb host in India. This shows the potential of how much women can earn through such platforms by working from their homes and doing what they already do so well, sharing their hospitality with their guests.

We also partnered with Self Employed Women’s Association (SEWA) in November 2016 — the first of its kind in India — to showcase Airbnb’s commitment to enable economic empowerment for female entrepreneurs and promote digital inclusion in rural areas across India. Through the partnership, we have been focussed on bringing the benefits of home sharing to SEWA members and creating economic opportunities for them in rural areas, while distributing tourism spends to parts of India that have not traditionally benefited from tourism and hospitality.

The idea behind the SEWA partnership was to give independent, self-employed women the chance to earn a livelihood/supplementary income by opening up their homes to travellers from across the world. We started with 8 women hosts in 2016, this figure has doubled and grown to 18 in 2017 and we have also moved beyond Gujarat to the North East.

Do you think neighbouring countries such as Sri Lanka and Maldives have better ticket sizes and are more professional towards the home-stay segment compared to India?

In India, the response to Airbnb and the value it adds to travel experiences has been tremendous.

Each time we have entered a new market, popular opinion has declared that we would not succeed based only on the precedent set by our previous successes.

As mentioned earlier, home-sharing as a concept is increasingly becoming popular in India as more and more Indians are looking for a unique travel experience.

Right now our biggest focus is to get more people acquainted with the value that Airbnb can add to their travel experiences, and to reap the benefits of home-sharing. We are on a steady growth trajectory in India as we continue to expand our network.

Since you are listing hotels now, how are you handling GST in this segment, which is considered to be high at 28 per cent?

Airbnb has been collecting service tax on our platform on behalf of all hosts until the introduction of GST. Since July 1, 2017, Airbnb collects GST on behalf of all our hosts as per the slabs determined by the GST Ccouncil depending on the accommodation charge per unit per night . Since the determination of GST is based on the price of a unit and not based on any particular accommodation category, our existing systems for collecting GST works equally well for hotels as it does for any other type of accommodation.

Details of our process below:

“As per the notification released by Ministry of Finance on June 28, 2017, Airbnb hosts who expect their annual commercial turnover from sale of goods and services to be at or below ₹20 lakh (at or below ₹10 lakh in special category states identified under Article 279A(4)(g)) are currently exempt from registering for GST purposes. For these hosts, Airbnb will remit the entire GST collected from the guests directly to the tax authorities.

Hosts who expect their annual commercial turnover from sale of goods and services to be over the GST registration threshold of ₹20 lakh (or ₹10 lakh in special category states identified under Article 279A (4)(g)) are required to obtain a GST number and remit the entire amount of GST owed on the transaction to the tax authorities. For any host that has provided Airbnb with their GST registration number, Airbnb will collect the GST from the guest at the time of booking, and will pay out taxes to hosts about 24 hours after the guest’s scheduled check-in time.”

Commission rates from hotels are low compared to home stays, so what is the advantage of bringing them on to your platform?

Our community is hundreds of millions of people strong and we can help independents and small hospitality providers who’ve been left behind by the Online Travel Agencies (OTAs) attract new business. Hence, hotels too have much to benefit from listing themselves on Airbnb:

We have huge brand affinity and perhaps more organic traffic than any other travel company in the world.

Practically speaking we also offer a number of clear benefits:

Lower fees (3-5 per cent on the host side depending on cancellation policy and 5-15 per cent on the guest side) — compared to nearly 30 per cent in some cases with OTAs

Benefit from all of our trust features, including guest profiles and reviews as well as trusted payments

No contracts — full control over when and how inventory appears on Airbnb

Do you see competition from mid-market hotel brands like Lemon Tree Hotels and Ginger?

We’d like to refrain from commenting on competition but we believe that one of the advantages of the brand is that we have been a global platform right from the start, with a network of guests and hosts that span the globe.

What is the kind of growth that Airbnb is seeking from India this year and on the back of what would this get attributed?

Airbnb’s CEO Brian Chesky, during his visit to India early in 2017, reiterated that India is rising to become one of the key markets for Airbnb. He predicted that in about 10 years from now, India will be one of the world’s biggest markets for Airbnb. In order to achieve this vision, Airbnb is working towards delivering magical travel by empowering more people to become hosts and transforming luxury travel.

Moreover, Airbnb is determined to be present at various untouched locations across India. Early this year, Airbnb signed MoUs with the North Eastern Council (NEC), the North East Tourism Development Council (NETDC) and two key livelihood initiatives, North East Rural Livelihood Project (NERLP) and North Eastern Region Community Resource Management Society (NERCRMS), with the aim of creating hospitality micro-entrepreneurs across key destinations in the North East of India. This is just a step closer to achieve our larger vision of boosting tourism in otherwise inaccessible destinations, and we will continue to work with key stakeholders and communities in India to promote responsible and sustainable tourist.

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