Jordi Torres Mallol, General Manager for Latin America, AirbnbSunday, August 3, 2014
‘We are slowly expanding throughout Buenos Aires’
for the Herald
Born: January 27, 1983 in Barcelona, Spain
Studies: Industrial chemical engineer, MBA at the London Business School
Book: The Shadow of the Wind by Carlos Ruiz Zafón
Newspaper: La Vanguardia, (Barcelona)
Magazine: El Jueves, (Barcelona)
Favourite destination: Galápagos Islands
Based in Barcelona but working with his eyes on Latin America, Jordi Torres Mallol told the Herald that the core mission of Airbnb, adding value to the household economy, is a status-quo disrupting strategy for the long term. Far from market saturation, the company expects to see up to 300 percent more travellers use its website this year. He says Buenos Aires has been no exception in a case of aggressive growth, with the Argentine capital seeing a 30 percent rise in registered properties. With accommodation mainly in Palermo and Recolata — but slowly expanding to the rest of the city — average daily rates at the top-end weigh in at US$80-90.
How do you distinguish yourselves from Couchsurfing.com?
At the conceptual level, we may appear similar. We both connect people that want to travel with people that have space available at their own homes, but we provide guarantees that serve to calm potential anxieties this may generate: a 24-hour customer service line, a professional photography service to guarantee properties are as they present themselves, we mediate in any conflict that may arise. These things have allowed us to establish ourselves in more than 190 countries.
When did you begin to operate in Argentina?
This has been an open platform since the first day, in 2008. We have had a direct presence in Latin America as of September last year, when we opened an office in Sao Paulo.
Do you have any plans open an office in the country?
We will be setting up shop for the Spanish-speaking part of the region in Miami. Sao Paulo will then move on to only cover Brazil.
What specific operations are currently conducted from Brazil?
We cover several functions there, trying to maintain a healthy balance between demand and supply as the key to our business. There is a marketing division and also a sales team, which undertakes projects at specific destinations. Another department leads educational campaigns to instruct hosts with regard to providing optimal hospitality. We travel to various cities to take suggestions from clients. Other departments take care of public affairs and government relations, as well as communications.
What is your chief source of income and how did you do last year?
We work with commissions, which make up 100 percent of our revenue. We charge the guest three percent of the rate charged by the host, who isn’t charged anything. I can’t talk about specific numbers, but we had 200 percent more travellers in 2013 on 2012. But we remain very far away from market saturation. Increasingly more people are looking to add extra value to their homes in a sustainable manner. We expect to see 200 to 300 percent more travellers this year.
How does Argentina fare in terms of visits to the country compared to the region?
In Latin America, there is a peculiarity. We have been able to penetrate the international tourism market very well, among other things because people enjoy to see it as a new way to immerse themselves in that place’s cultures, but the truth is that domestic travellers are much more important in Latin America. Airbnb has been adopted as a very natural model for Argentines. Before establishing our office in the region, several thousand properties had already been registered with Airbnb in Argentina. There are now more than 7,000 in total, 5,500 of which are in Buenos Aires, which reflects growth of 30 percent in the last 12 months. Argentina shows one of the highest, most aggressive levels of growth in the region.
What is the most visited destination in Latin America?
Rio de Janeiro has been the biggest grower, rising to 21,000 ads, which makes it the third largest in the world after Paris and New York. We see this as a response to an event as massive as the World Cup. At the 12 cities, about 120,000 people found accommodation through Airbnb. The average Brazilian who opened his home during the World Cup made US$4,000.
What are the average daily rates and the most popular neighbourhoods in Buenos Aires City?
It depends very much on the type of property, but the average rate for a centric property with all-inclusive amenities such as gym and swimming pool is between US$80-90. Palermo and Recoleta are the main neighbourhoods that respond to the tourist demand, but little by little it’s growing to others.
What challenges have you faced in your entry to the Argentine market?
We always follow and abide by local regulation. We maintain healthy dialogue with the authorities, because sometimes regulation changes at the neighbourhood to neighbourhood level. What we see is that our business has a positive effect on regional economies, boosting consumption, for instance, so we communicate that to the government. Ninety-seven percent of profits stay in the hosts’ hands.
Have you observed animosity from more traditional actors, such as hotels and hostels?
There’s always a degree of tension upon the arrival of a new actor that breaks up the status quo. We’re here to stay, because we believe this is a very important new tool for household economies. We see a constructive rather than destructive competition taking place, however. We have increased the size of the pie, and as we grow, we also see hotel occupancy rise. Our market is people seeking more of a boutique experience.
The country became cheaper for foreigners due to January’s devaluation. Do you use this type of information to promote destinations?
Promoting destinations is something purely anecdotal for us, because we have a presence in almost every country. We may implement a campaign on social media, but we don’t really respond to news like the one you’re referring to. It took us four months to reach one million reservations, and now we see that level every month. The devaluation of a currency becomes anecdotal in a context of such aggressive growth.@franma1990