Tao Peng, president, Airbnb China
Airbnb made its ambitions to conquer China clear with the appointment of Tao Peng as president of Airbnb China in July. In the second half of 2018, the number of guest arrivals in Airbnb listings in China increased nearly 3X, and by 2020, the home-share giant expects China to be the top origin market for the company globally.
Peng has founded a number of companies in the travel space including Breadtrip, a social application for recording and sharing trips, and more recently, CityHome, a service for short-terms rentals across China.
In February, Airbnb released travel trends around the Chinese New Year - including a 100% increase in guest arrivals, increased ADR, millennials choosing Airbnb, etc. What do those trends/numbers signify for Airbnb’s Chinese business generally?
Our mission is to create a world where anyone can belong anywhere, and we have been deepening our commitment to China. We have a dedicated strategy for China that is built around supporting healthy travel and ensuring the economic benefits of travel and tourism go directly to people and communities.
There are few major trends that shape the landscape for Airbnb in China:
- China is the "the world's largest outbound tourism market and the world's fourth largest tourist destination," according to the China National Tourism Administration. We expect China to be our top origin market globally by 2020.
- China is becoming a more popular destination. As the AP has noted, China is set to overtake France as the world's number-one tourist destination by 2030 as a growing middle class in Asia looks to spend more on travel. Much of the sustained boom in travel and tourism, which has outpaced growth in the global economy for eight years, is centered in the Asia Pacific region, where trips are expected to grow by 10% this year.
- Another important driver for us in China are Chinese millennial travelers. There are 400 million Chinese millennials - more people than there are in the United States - and today, 60% of our user base in China is under 35.
- Finally, we are seeing impressive growth in family and group travel in China. As we saw during the Chinese New Year, nearly 60% of reservations made by Chinese guests for Chinese New Year travel are for groups of three or more travelers.
Occupation
President, Airbnb China
What are the main regulatory challenges Airbnb faces in the China market that don’t apply elsewhere?
As stated, China is the "the world's largest outbound tourism market and the world's fourth largest tourist destination," so working in this market is an exciting challenge.
The short-term rental (STR) industry is still in the early stages in China, and we are working incredibly hard to ensure this industry grows in a healthy and sustainable way:
- We are working closely with the local government and have memorandums of understanding in place with cities across China including Shenzhen, Guangzhou, Shanghai, Chengdu, Chongqing and Guilin.
- Since June 2017, we have worked with China Tourism Academy to boost the development of Chinese tourism.
- Last year, we launched the Airbnb Guilin Rural Community Tourism program. The project, focused in Jinjian Village in Longsheng County, Guilin, is aimed at promoting rural tourism in Guilin. Airbnb and the Guilin government will work together to identify and promote new economic opportunities for locals through home-sharing.
- Last year, we also partnered with China State Information Center and work together to promote a policy framework conducive to healthy long-term development of the industry.
Home-sharing delivers economic opportunities directly to the Chinese people and brings more travelers to communities they might have missed. We are excited to work in partnership with community leaders.
Do you view government regulations in a positive or negative light, and why?
We have long favored clear, fair rules for home-sharing, both in China and around the world.
The sharing economy is growing at an unprecedented rate in China, and the Chinese government has increasingly recognized its importance for sustainable economic development.
Airbnb is patient and deliberate about their work in China: They spent years listening and learning, and that spirit and way of doing things continues to guide our work.
Tao Peng
The sharing economy is expected to continue growing at 40% per year in the next five years in China, and it’s clear that local leaders want to work with international and local companies on creating a positive, safe and transparent model for the industry.
For example, last year Airbnb was a part of the Home Sharing Industry Standard that was officially launched on November 15, 2018.
The standard was initiated by the State Information Center Sharing Economic Research Center, alongside experts and industry players, to jointly promote healthy development of the STR industry. We helped provide guidance as leaders developed and released these rules.
Airbnb co-founder and chief strategy officer Nathan Blecharczyk has said Chinese tourism will be Airbnb largest source of business by 2020 - can you comment on that?
We expect China to be the top origin market for Airbnb globally by 2020. At Airbnb, we have an inherent advantage: Our global network of listings around the world is unrivaled, and it is important to travelers planning their next trip.
We have already seen significant progress. For example, in the second half of 2018, the number of guest arrivals in Airbnb listings in China increased nearly 3X.
Where does Airbnb’s China business fit in among other priorities such as its Homes business, Experiences business - now Transportation business - etc.?
China is a critical priority for Airbnb. Airbnb’s mission is to create a world where anyone can belong anywhere, and we can’t achieve that mission without China.
Our team recognizes that China is unique, and we operate as a separate business unit at Airbnb.
This is unique, and it’s the ideal way to operate because we get the best of both worlds: the resources of a global company with a network of listings around the world and the autonomy we need to move fast and capitalize on this amazing opportunity here.
Moreover, we have tremendous support from Nate, who remains the chairman of Airbnb China.
How have you grown Experiences in the region, and what particular challenges have you faced in doing so?
We have seen incredible growth in our Experiences business. We started with just 10 Experiences in Shanghai, and we now have more than 1,000 Experiences in China.
China has thousands of years of history in culture and arts, and the opportunities for amazing experiences are virtually limitless.
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For example, you can learn how to make delicious soup dumplings in Shanghai, or explore the Chinese opera, a traditional art form in China, and even try on the makeup.
Hosts in rural and urban cities in China can apply to host an experience, and we think there is a tremendous opportunity to show the world the local, authentic China through different hosts and their different perspectives.
There are more millennials in China than there are people in the United States, and many of those millennials are traveling for the first time. How is Airbnb targeting that specific market?
Today, 60% of our user base in China is under 35, and understanding our community has helped inform our work. Airbnb has partnered with Tencent Video and launched a creative campaign called “Airdrop 100 magical nights.”
In the campaign, Airbnb will offer 100 free nights and experiences to millennials who didn’t get a chance to travel in the past year. In just two days, 10,000 people signed up.
We also use what we learn about millennials when building our products. Most millennials like to book their travel directly on their mobile device.
Accordingly, we are investing heavily in technology, and recently launched a WeChat mini program that allows travelers to book and manage their reservation without leaving WeChat.
How has Airbnb approached customer service in China - particularly through technologies like WeChat and Weibo?
Last year, we announced our China “Service Anywhere” principle: “If you’re in China or from China, you’ll be served swiftly and effectively by a Chinese customer service officer.”
To deliver against this new principle, we significantly expanded our 24/7 global customer service support for Chinese users.
We have a dedicated and bilingual China customer service team, and we also invested in social customer service - including WeChat and Weibo - so however our customers choose to contact us, we can help offer them world-class service.
Tarry Wang Liantao of Xiaozhu recently told us he doesn’t mind Xiaozhu being called the “Airbnb of China” because “we’re quite different from what Airbnb does globally.” What’s your take on that comment?
We generally don’t talk about other companies, but what I can tell you is that we’ve built one of the largest hospitality platforms in the world, and we have an unrivaled global network.
We are proud to have an unrivaled brand and a loyal and growing community in China and around the world.
What are the biggest threats posed by the likes of Xiaozhu and Tujia?
We’re focused on our company and our community. We’ve built one of the largest hospitality platforms in the world, and we have an unrivaled global network, and we’re doing all we can to make our community stronger.
Does it hurt Airbnb to not be aligned with the biggest online players in China - Alibaba, Meituan-Dianping, Ctrip?
We have seen incredible growth in China, and the number of Chinese hosts and guests continues to surge. We’re very proud of what we’ve accomplished, but we’re nowhere near finished.
How did your experience at companies like Breadtrip and CityHome prepare you for this role at Airbnb?
I was excited and honored to join Airbnb because I wanted to continue to redefine the way people travel and to achieve our shared mission. I believe travel can change a person.
I’ve traveled a lot - I’ve visited more than 50 countries - and I was an Airbnb host before I joined the company.
Doing business in China isn’t easy, and if you don’t deeply believe in your mission and your work, you won’t succeed.
Tao Peng
As Airbnb grows stronger and becomes an end-to-end travel platform, I’m excited to leverage my experience and deep understanding of the Chinese travel industry to grow Airbnb China.
At CityHome, we provided all the necessary operational services for property owners and hosts. That experience taught me about what makes a host successful and what high-quality home-sharing looks like.
I use those lessons every day.
What's your best advice for anyone starting an online travel business in China?
I think, as with any business, you have to start with the customer at the core. You need to listen to what customers are saying and develop a deep understanding of what they need.
You also have to understand and champion your mission. Doing business in China isn’t easy, and if you don’t deeply believe in your mission and your work, you won’t succeed.
Many Western online travel brands have tried - and failed - to survive in the market. What is Airbnb doing differently to last?
All of my colleagues in China and around the world understand that China is a unique and challenging place in which to do business.
One of the reasons why I came to Airbnb is because the company was patient and deliberate about their work in China: They spent years listening and learning, and that spirit and way of doing things continues to guide our work.
There are a lot of things that make Airbnb different - from the services we offer to the way we approach growth in this market - and I’m cognizant of the challenges, but confident that we can succeed
What is something about you that we wouldn’t learn from your resume?
I am a hardcore traveler and Airbnb host. I believe travel can change a person. I’ve traveled a lot - I’ve visited more than 50 countries - and my experiences have made me passionate about the work I do.
What keeps you awake at night?
I sleep well! I’m proud of the team we have built at Airbnb and optimistic about our future.