Airbnb, the world’s leading service to rent out rooms or properties over the Internet, has announced plans to rapidly accelerate its growth in Africa, particularly in key markets such as Kenya and South Africa.
The service has already seen its listings more than double in the continent in the last year, while the number of users in the region has increased by 145%. Now, the San Francisco-based company want to capture an even bigger share of the 60 million tourists that visit Africa each year.
Airbnb’s CEO Brian Chesky was one of the attendees at last month’s Global Entrepreneurial Summit 2015 in Nairobi – also attended by U.S. president Barack Obama and his Kenyan counterpart Uhuru Kenyatta, as member of a group of U.S. business leaders committed to helping to develop the next generation of entrepreneurs around the world.
A vibrant startup scene
“We were really taken aback by the strength and vibrancy of the startup scene in Nairobi and the entrepreneurs we met at the GES Summit,” Nicola D’Elia, general Manager Middle East & Africa for Airbnb, told CNN.
“We found the spirit of entrepreneurialism in Kenya to be very similar to San Francisco and Silicon Valley,” D’Elia added. “In fact, it’s newer, more nascent and more exciting too.
Kenya alone has over 1,400 listings on the platform, with the greatest concentration in Nairobi (788). People in the country are also embracing Airbnb as a way of traveling, with the number of Kenyan guests using Airbnb tripling in the last 12 months.
South Africa leads the way
Airbnb’s largest African market is currently South Africa, with 9,400 homes listed – an increase of 138% in the last 12 months – while the number of guests has grown by 257%.
The country is also home to two of the five largest markets for Airbnb in Africa: Cape Town and Johannesburg.
“This growth has largely been driven organically by word of mouth,” D’Elia said. “By building a team to focus on the region, we hope to further accelerate this growth.”
Finding tailored solutions
The expansion in Africa comes in the wake of Airbnb’s recent launch in Cuba, which has already become its fastest growing market.
Some of the initiatives employed to overcome challenges around internet literacy and mobile payment infrastructure will be applied to Africa as well.
“One of my first priorities is to look at payments and how we can create solutions more tailored to Africa. M-pesa has been hugely successful here and we will certainly be looking closely at it along with other local payments services,” said D’Elia.
A regulated future?
Sharing services like Airbnb operate outside of traditional regulations, which can be a boon or a bane: “Whilst an unregulated environment could mean great opportunity, it can also mean uncertainty, as regulations can change overnight, sometimes on the flimsiest of grounds,” Trevor Ward, a specialist consultant in the hospitality and leisure industries with a special focus on sub-Saharan Africa, said than an unregulated environment could mean great opportunity, but also uncertainty, noting that “regulations can change overnight, sometimes on the flimsiest of grounds.”
“Africa is composed of 54 very diverse nations, with huge differences among them and different legal systems, which will bring questions regarding whether Airbnb is legal, illegal or unregulated – and the lack of knowledge on the part of the regulators won’t help,” he added. “I do believe it needs to be regulated in some way.”
Nevertheless, the competition with traditional offering could also spark some benefits: “There are huge opportunities in some destinations, where hotel prices are incredibly high compared to the product offered. Encouraging home stays fosters greater understanding between peoples. Bringing even small amounts of money to communities can make a big difference (one night’s stay can equal a month’s school fees).
“Today’s renters of a room are tomorrow’s hotel owners. Increasing domestic and intra-african travel brings greater demand for accommodation, at a price point where many of the existing offers are very poor, or worse.”