Alternative accommodations company Airbnb has signed a memorandum of understanding with the tourism ministry of Maharashtra as the official alternative accommodation partner for the state as it looks to further penetrate the brand and expand its network of homestays in India.
The partnership is significant as it marks the company’s first revenue-sharing agreement with a state government, in this case, Maharashtra Tourism Development Corporation (MTDC). The agreement will see Airbnb sharing a small portion of its booking revenue in Maharashtra with MTDC.
Airbnb declined comment on the quantum of the revenue split.
“The idea is to give homestays across Maharashtra a global footprint. We want to share our best practices through hospitality workshops and sensitisation workshops,” Amanpreet Bajaj, country manager for Airbnb India, told ET.
The government is looking to create at least 50,000 micro entrepreneurs in the hospitality sector in the next three years, with about 15,000 being female hosts through this partnership.
This is not Airbnb’s first tryst with a state government. It had earlier partnered with Gujarat and Andhra Pradesh governments.
However, as a first commercial partnership, Airbnb will provide skill development workshops for hosts on hospitality standards, jointly conducted by one of the world’s most valued startups and the government over the next six months.
The move comes shortly after the company, valued at about $31 billion, launched its experience business category, ‘Trips’, in March this year and is looking to leverage the category in the country to widen its base. Airbnb currently lists 22,000 properties across 100 Indian cities and claims an annual growth of 125% in listings alone in the country.
The partnership with Maharashtra government is the first step in its strategy to build on the brand in India.
“India is a key strategic market for Airbnb globally and we have started investing resources (in branding and marketing) from here on,” said Bajaj, declining comment on the quantum of investment the firm has earmarked for India. “The marketing campaign that we are running this year is by far the largest we have done and we will continue to invest wherever we feel it is appropriate,” he added.
The increased focus on India comes after CEO Brian Chesky said he expects India to be one of the company’s key revenue generators as reported by ET in March. “The reason I am incredibly excited is, say in about 10 years from now, it will be one of the world’s biggest markets for Airbnb,” Chesky had told ET earlier.
Airbnb will look at directing a large part of its India investments towards raising brand awareness as it looks to maintain high growth across domestic, inbound and outbound business in the country. “India is a long-term opportunity and we will continue to invest here. An annual growth of 200% is phenomenal and we will continue to see this for a few more years before it stabilizes,” said Bajaj.
Source: http://brandequity.economictimes.indiatimes.com, 14 June 2017
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