Airbnb’s UK boss says the company is at the heart of the country’s sharing economy. And with expansion into new demographics, it looks like the business is here to stay.
Airbnb is the ultimate bedroom start-up. It began with a simple initiative in 2008, which saw its founders hosting businessmen during a conference that had maxed out local hotel capacity in San Francisco. Now it’s a global peer-to-peer website that has connected 50 million guests with a place to stay.
London has been a big part of the expansion story. Within a year of setting up an office in 2012, Airbnb claimed it had an economic impact in the capital of £500m and that it was supporting 12,000 jobs.
And although the site now has a presence in 190 countries, London remains Airbnb’s second largest market based on the number of outbound travellers, and third largest based on the number of listings (33,000) on the site.
It is also proving to be a solid base for expansion across the UK, with a growing number of listings from Brighton, Bristol, Bath, Manchester, York, Edinburgh and Glasgow.
But the company’s UK and Ireland general manager, James McClure, is quick to emphasise that Airbnb isn’t the preserve of trendy 20-somethings – even if its office is currently located in Shoreditch.
“The stat [in our research] that surprised me most was that the average age of an Airbnb host in London is 50,” he says. “And when we asked our hosts what the money they get from Airbnb allows them to do, more than half of them say it actually helps them to pay the bills or stay in a home that they wouldn’t be able to otherwise.”
Others use the extra income to fund their own start-ups.
“It comes back to the pure economic idea of getting maximum value out of assets,” says McClure, rather chiming with the times.
Airbnb guests in London typically spend 41 per cent of their holiday cash in the local area where they are staying – which is more likely to be Bethnal Green than Mayfair – helping local businesses and diversifying tourism revenues.
It will come as no surprise then, that McClure doesn’t see Airbnb as a new model that will kill the market for traditional hotels. Instead, he believes the company’s growth is incremental to the wider industry – and part of the trend in hospitality to cater more broadly for different consumer tastes.
Sharing for growth
Airbnb is also one of the companies at the heart of UK’s growing ‘sharing economy’ – and it was one of the founder members of trade body Sharing Economy UK (SEUK).
“Technology has enabled us to connect people who have space that they want to share with people who are looking for it. In essence, it’s a very simple idea,” McClure explains. “We have the benefit of doing it in a very interesting time, with companies in very different industries using similar models and depending on things like the currency of trust online.
“The UK has been very forward thinking in a lot of this – and it’s emerging as the centre for the sharing economy,” he adds.
McClure is looking to SEUK to boost this position by navigating some of the issues – such as tax, regulation and trust – and introducing some of its concepts to a broader audience. He says the UK government can play its part by encouraging its own employees to use sharing-economy companies as a way to help cut costs.
From an Airbnb perspective, he says discussions with government and regulators “are always very productive”. And the company has benefited from an increase in the tax allowance for those renting a spare room. He calls that “an appropriate tax”, considering its contribution to tourism and local revenues.
A mainstream alternative
The more people become familiar with the sharing economy, the better the prospects become for Airbnb too. The company’s growth to date has largely been driven by word of mouth, but the numbers suggest it is gradually becoming a more mainstream alternative.
McClure’s plans for expansion across the UK – and into new demographics – will help too.
This summer, Airbnb was the official accommodation provider of the Edinburgh Fringe, aligning itself with arts and culture enthusiasts. It is also targeting popular family and domestic tourism spots, such as Cornwall, Devon and the Lake District. And it’s going after the market where it all began – business travel.
Yet at the root of it all, McClure is adamant that Airbnb’s success will remain dependent on its values and its community. “We’re trying to create a world where people can feel like they belong anywhere – and live like a local,” he says.
James McClure is a speaker on the Disruptive Innovation panel at the CBI's Annual Conference.