Airbnb targets Africa’s boom

NAIROBI: Hot on the heels of Uber’s pulling up in Kenya, home-sharing platform Airbnb is now open in Africa.

The company, which allows users to list their spare rooms to travellers who do not wish to stay in a hotel has pitched tent in the continent, convinced the region is the platform’s next growth space.

Business Beat had an exclusive interview with Nicolai D’Elia, Airbnb’s boss for Africa, who spoke about the company’s growth prospects in the continent on the back of its growing tourism industry and technology boom.

“Africa is definitely a key part of our next growth phase. This is a market with 54 countries and almost a billion people, with growth prospects that are higher than almost every other region in the world,” said Mr D’Elia.

Before joining the Airbnb executive team two months ago, D’Elia was Facebook’s head of international growth and partnerships in the emerging markets of Europe, Middle East and Africa.

He added that aside from a favourable macroeconomic climate, Africa has a vibrant tourism industry and infrastructure gaps that provide the perfect opportunity for users of the $25 billion (Sh2.6 trillion) start up.

“The total travel market in Africa is estimated to get to more than $50 billion (Sh5.2 trillion) in the next half decade,” he said.

“There are already 60 million people who travel to Africa every year, and these numbers are expected to grow both in terms of people who travel into Africa and people who travel within Africa.”

South Africa has the largest number of listings for the continent at 9,000; Nairobi accounts for 1,500 of the total 27,000 listings.

In Nairobi, guests can chose rooms ranging in cost from Sh1,500 per night to Sh10,000, with listings spread across several addresses, including Langata, Kileleshwa, Embakasi and South B.

Other listings also exist outside the city, particularly in the coastal areas, such as beachfront houses in Nyali, Watamu, Lamu and Malindi.

AFFORDABLE SPACE

Airbnb grew out of the founders’ need for affordable living space, and grows through referrals.

“We have been growing at 250 per cent year on year in terms of listings in Africa, and this is quite healthy and we want to accelerate this growth,” D’Elia said.

He added that the primary mission of Airbnb is to create a world where “everyone can belong anywhere” by staying at other people’s homes when they travel.

“This means being present in every country and region in Africa, and investing in these places to grow communities. Hosts not only share their rooms, but also their culture, traditions and values with the people they let into their houses,” he said.

D’Elia noted that this immensely benefits a country’s tourism industry, particularly in destinations that do not have mature accommodation infrastructure.

Currently, Kenya has a bed-capacity gap of between 10,000 and 15,000. In addition, the tourism sector is just starting to climb out of a four-year slump that led to the closure of several hotels at the Coast, though some are starting to reopen.

Airbnb is expected to offer tourists, particularly those from within the country, a cheaper alternative to conventional hotel accommodation.

However, its growth has brought challenges in other parts of the world, particularly its central operating model, which is seen to directly rival conventional hotel business.

Like ride-sharing platform Uber, Airbnb has disrupted traditional business establishments, with the hotel industry viewing the platform as a giant online hotel that operates above conventional regulations. Further, tax authorities in the US and some countries in Europe are cracking down on Airbnb landlords.

Some home owners have also complained of finding their properties trashed and there have been safety concerns, the latest being a sexual assault allegation where a 19-year-old guest claimed his Airbnb host imprisoned him and later sexually assaulted him.

CONSTRUCTIVE RELATIONSHIPS

D’Elia, who has also worked as innovation manager at global telecoms umbrella body GSMA, said trust is at the centre of Airbnb’s operating model and it would work with regulators in all territories it is present.

“As far as we know, there are no regulations here in Kenya and other African countries that we have explored that are against home sharing,” he said.

“We are at the beginning of our journey and we are building constructive relationships with the relevant government stakeholders, showing them that there is a definite positive impact on cities and communities if we are able to let hosts become micro-entrepreneurs.

He added that despite being disruptive, companies like Airbnb and Uber are not setting out to kill traditional business models, but to complement them.

“Like here in Kenya, there is a lot of development in infrastructure that is invaluable in propping up traditional brick and mortar businesses. We should, however, be able to build conditions that support entrepreneurship, which include access to capital, training and good governance.

“If we have all these things in place, we can have both systems working in tandem with each other.”

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