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Tourism boom fuels growth in novel lodging scheme in Philippines

Publication Date : 06-06-2014

 

Thinking of where to stay for that next business or leisure trip to the Philippines?

Hotels and serviced apartments are obvious choices but for the more adventurous traveler, why not try a furnished tree-house for $141 a week in Boracay? If space is an issue, a private island in pristine El Nido, Palawan, with a white sand beach and a two-story villa for $1,680 a week might fit the bill.

Such properties in the country have been gaining exposure ever since listing with travel lodging website Airbnb, which started to aggressively expand its presence in the Asia-Pacific last year.

Jia Jih Chai, Airbnb country manager for Southeast Asia, said their decision to expand services to the Philippines and the region has already started to pay off for Airbnb, which claims to have catered to 11 million guests worldwide.

Chai, who flew to Manila from the company’s Singapore office for the recent 23rd World Economic Forum on East Asia, told the Inquirer in an interview that Airbnb's Philippine business had already grown by 300 per cent year-on-year.

While he declined to give specific figures, he noted that the company would continue to track growth as travel was expected to pick up, led by the expansion of budget air travel and easing restrictions following the anticipated economic integration of the region next year.

Prospect

“It’s [coming] from a small base but it’s very interesting growth,” Chai said, referring to its Philippine operations. “I think we could almost sustain this kind of growth for a while.”

He said Airbnb has more than 2,000 listings in the Philippines, with about half that figure coming from Metro Manila alone.

This is relatively small compared to the 50,000 rooms listed in the region and 600,000 rooms it has worldwide, mainly in more developed markets like Europe and the United States, where the website was founded.

Asia Pacific, nevertheless, remained a key part of its strategy, especially as they start to open up the Chinese market, Chai said.
“Asia is a huge and important region for us. But right now, it’s not a big contributor to our business,” he said.

The travel statistics showed plenty of promise, with about a quarter of global travel coming out of the region, Chai said, adding that this could grow to 30 percent over the next five to 10 years.

“We want to be positioned for this new traveler market,” he said.

Opportunities

That increase presents a big opportunity for companies like Airbnb and tourism in general given that four out of five trips in the Asia-Pacific were destined to locations within the region, he said.

Airbnb requires users to sign up and security is a key consideration with hosts (the property owner) and guests required to verify IDs by connecting to social networks and scanning official identification.

The website charges hosts a 3-per cent service fee while guests are charged 6 to 12 per cent.

It also gives a so-called host guarantees against damage for up to $1 million in certain countries. However, the Philippines was not listed among these in its website.

The Philippine market, meanwhile, has been mainly drawing tourists but Chai said a new class of business traveler has been emerging.

“These are more from the creative class: photographers, musicians and scriptwriters. We find they use Airbnb quite a lot,” he said.

Growing market

Another positive aspect about these travelers [is that] they stay for weeks at a time, Chai said.

He said the business had a long way to go in drawing more traditional travelers but he said the market was big enough to accommodate services like Airbnb.

“Hotels will serve certain types of needs and Airbnb will serve certain types of needs,” he said, referring to the more authentic experience of residing in a local’s home versus an international hotel chain.

“We think we’re growing the pie rather than taking from it,” he added.

 

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