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How Airbnb succeeded in Bali

20 listings to over 7000 in four years

The Airbnb success case
After getting onto Airbnb as one of their first 100 hosts in Bali, I can definitely attest to the enormous growth of sharing economy platforms. As an early adopter, I was able to build a strong review base and it has helped greatly later in the Airbnb search rankings.  Reviews draw bookings which in turn creates more reviews, higher placement in search, more bookings and the virtuous cycle repeats.  When Airbnb arrived in 2011, there were hardly 200 listings. Now, it's ballooned to over 7000
Why did Airbnb work in Bali?
Airbnb was able to grow so quickly in Bali because it solved a huge problem for property owners and travellers. If you, as a villa owner in Bali, wanted to rent your property in the first decade of 2000, this was the old process you'd have to go through. 
Typical Host Experience before Airbnb
  • open the Bali Advertiser and search the classifieds
  • hire a photographer to photograph the villa 
  • hire a contractor to build a website
  • hire another person to SEO the website
  • then pay Google Ads for keywords like bali villa rental which were expensive
  • rehire your website guy to update your website frequently whenever some new tech trend would emerge from Silicon Valley
  • rehire your SEO person whenever Google changed their algorithm and dropped you two pages in your search rankings
This was an era before Fiver and Freelancer, Wix and Facebook. It would take months and thousands of dollars to organize. I estimate that half of the villas never even got their websites up or had pretty awful looking sites built by shady web developers. It wasn't over though. After you got a site and took a booking, you would have to
  • Ask the guest to wire a deposit to your bank account. 
  • Negotiate about the percentage of the deposit, how far in advance it would need to be paid, and who would pay the transfer charges. All done over email. 
  • Wait for the bank transfer to arrive, taking anywhere between 3-7 days. 
  • Secretly wonder if the guests were going to be assholes and trash your villa.
  • Collect the rest of the payment, usually in cash when the guests arrived. 
  • Should they write you a shitty review on TripAdvisor, that'd be it. 
Guest experience wasn't any better
As a guest, you'd be pretty foolhardy to rent from a place that didn't have a review on TripAdvisor, Booking.com or some other large trusted online agency. None of the large online travel agencies (OTAs) at the time had many reviewed listings in the market, with the exception of FlipKey. Given the sheer number of accommodations in Bali, the chances of being disappointed were pretty high. 
Valley of despair
In fact, there were so many failure points, most villa owners would opt out of daily rentals entirely, preferring to leave their villas empty or rent out long term.  Our business would never be possible before Airbnb due to the tiresome administration required to secure each daily booking.  We stuck to primarily people who were looking to live in Bali for a few months, students on overseas study abroad programs were our best customers. 
Things Airbnb did right
When Airbnb came along and offered DIY listing, free photography, and a beautiful website, I think most folks were skeptical at first. Now you could skip over all the steps you had to do previously and monetize your villa in a matter of a few keystrokes. However, quickly it became clear that short term rentals were not only possible but extremely easy and profitable. Airbnb made renting a villa easy, friction-less, and instilled trust.  
Airbnb also began extensive community development programs and invited tons of hosts for regular meetups. A community needs leadership to promote the correct culture, and also to get it in people's mind that they were doing things right. Airbnb gave hospitality talks, awarded well performing hosts publicly, and promoted local festival and events. 
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