Uber may have become the latest in a long line of Western tech firms to have failed in China, but fellow gig economy darling Airbnb is determined to succeed in the Middle Kingdom.
Today, the company announced a new brand for its China-based business and the local launch of Trips, its travel services feature. Beyond those changes, the firm pledged to increase its local presence via plans to triple its headcount in China and double its investment in the country.
First up, Airbnb China, the standalone company that raised funding from China Broadband Capital, Sequoia China and others, is renaming its local service to “Aibiying” (爱彼迎）which the company said means “‘welcome each other with love.”
Trips, meanwhile, is a service that helps give Airbnb customers ideas for things to do and see whilst they are traveling. It is now live in Shanghai, its first stop in China, having recently gone live in Delhi, India — another market of focus — this month.
Airbnb claims three million homes on its platform from some 191 countries. It said it has around 80,000 listings in China, where it has catered to close to 1.6 million arrivals.
Beyond a destination, Chinese tourists are a major global force. A recent report co-authored by Visa estimates that China’s travel spending came in at $137 billion last year. That figure is forecast to increase by 87 percent over the next 10 years, taking China’s spending to double that of the U.S., and more than the UK, Russia and Germany combined.
Airbnb said that it has seen over 5.3 million Chinese travelers stay at Airbnb listings worldwide, with outbound travel to its properties up 142 percent in 2016 alone.
That goes some way to explaining why Airbnb is ramping up its on-ground presence with plans to triple its current staff roster of 60. China is also where it operates its only engineering center located outside of the U.S., and it plans to heavily invested in staffing the center up, whilst also doubling its investment in China itself.
“There’s a whole new generation of Chinese travelers who want to see the world in a different way,” Airbnb CEO Brian Chesky said in a statement. “We hope that Aibiying and our Trips product strikes a chord with them and inspires them to want to travel in a way that opens doors to new people, communities and neighborhoods across the world. I’m really excited about our future here.”
Airbnb recently secured $1 billion in new funding at a valuation of $31 billion and, interestingly, it revealed that its business is now profitable as of the final part of last year. While its network may be beginning to tip the scales in terms of reach and revenue, it is very much an underdog in China. Local player Tujia, valued at a more lowly $1 billion, battled China’s many Airbnb clones to occupy the top spot.
Tujia, which includes Expedia-owned HomeAway, claims 400,000 listings and a focus sharpened on the Chinese market, both in terms of customers and home owners. While Airbnb has added support for Alipay payments and WeChat communication, Tujia takes a more service-minded approach in line with the expectations of Chinese tourists. That includes dedicated guest check-in staff, cleaning staff, and even managing properties directly, as its CEO Melissa Yang explained in this 2015 interview.
While Airbnb may be the choice for Westerners visiting China, Tujia has a dedicated focus on being where Chinese tourists want to be, and its reach does extend worldwide through its alliance with HomeAway, the Airbnb rival bought by Expedia for $3.9 billion in 2015. However, Airbnb remains the dominant force in almost every country aside from China. That makes its quest to grow in the country a tantalizing one, particularly given the high rate of failure of U.S. tech giants in China.
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