As Africa's sharing economy grows, Airbnb points tourists in new directions

Nearly two years ago, Mengesha Tesfaye was scrambling to make ends meet shining shoes in Lalibela, a picturesque Ethiopian town known for its medieval-era rock-hewn churches. Then, one morning, he struck up a conversation with a French tourist, who had a strange idea for how he could earn a bit of extra cash.

Why didn’t he try renting out his spare room to passing tourists? There was a website, she explained, where he could advertise his place and visitors could arrange to stay. Nearly as odd as her idea was the name of the site itself, a jumble of letters he couldn't quite parse: Airbnb.

“I had never heard of this Airbnb, but I thought it might work,” he says. He knew his simple room – which has electricity, but no indoor plumbing – couldn’t compete with the professional hotels in town, but he thought he could offer something they couldn’t: a chance to see how local people lived. “I could take people around to drink coffee, drink honey wine, see the old village,” he says. It worked: Today, “The Lovely Africain Room” in Lalibela, which rents for $10 a night, has a perfect five-star rating. 

Mr. Tesfaye is part of Airbnb's newest push – to make landfall in the world’s most underdeveloped tourist destination, sub-Saharan Africa.

So far, it appears to be working. The 7-year-old firm has approximately 40,000 listings across the continent, and the number of bookings in South Africa – the leading market – has grown 259 percent over the past year. Morocco is close behind, with thousands more listings scattered from Kenya to Mauritius.

The company, which is US-based, is part of a wider trend in Africa toward a technology-fueled "sharing economy," networks allowing consumers to crowd-source everything from cab rides and wifi to antiques and tractors. Ride-share giant Uber, for instance, is now in South Africa, Nigeria, and Kenya, while several thousand wifi users in South Africa have recently joined a global service called Fon, which allows them share their extra monthly bandwidth in exchange for access to a network of free hotspots worldwide tapped from other members' connections. In Nigeria, meanwhile, a start up called Hello Tractor is using text messages and mobile money to connect rural farmers to rentable tractors.

While there are early rumblings of discontent from the accommodation industry, Airbnb’s presence has not yet drawn the ire it has elsewhere over its rental policies.

That, in part, may be because it is tapping into a relatively unfilled niche here. Sandwiched between the sparse, gritty local budget hotels and the ritzy international chains where 24-hour generators and luxury items can raise costs per room, the service has fed into a longstanding demand for reliable, mid-range accommodation in many African cities. And in doing so, it has unwittingly taken advantage of another continental tradition – its hospitality.

“In West Africa there’s a history of opening your home to strangers,” says Joe Addo, a Ghanaian architect who rents the spare rooms in the airy, angular home he designed and built for his family in the suburbs of Accra.  “For that reason, I feel that Airbnb could transform the tourism industry in sub-Saharan Africa, particularly because we don’t always have the proper hotel infrastructure to support the guests who come in from around the world.”

Indeed, many of the site’s African hosts offer experiences far off the beaten tourist track. There’s the 51^st  floor penthouse in Africa’s tallest apartment building, in downtown Johannesburg, where your $50 stay includes dinner and a brief on the building’s chaotic history from your host ("If you're looking for Europe in Africa, keep looking – this is not the spot for you," the description reads). Or the Kigali art gallery with a long history of teaching art to genocide survivors and impoverished youths, where the walls are splashed with color and the hallways crowded with paintings.

“It’s a win-win,” says Charles Kizito, who manages the gallery, Ivuka, and maintains its Airbnb listing. “Visitors get to stay somewhere interesting and we’re able to do community outreach for our gallery and pay for operating expenses when sales are slow.” Over the past year, he says, he’s made about $8,000 renting out his two spare rooms, which each go for $25 per night.

This, indeed, is exactly the kind of proprietor Airbnb says it was designed to facilitate – micro-entrepreneurs looking to make a little cash while sharing their space with passing visitors. In Africa, this model is especially valuable in markets where tourism infrastructure may not yet have caught up to demand, says Nicola D’Elia, Airbnb’s general manager for the Middle East and Africa

To date, he says, Airbnb has not encountered any legal hurdles in Africa. But that doesn’t mean the local hospitality industry is unconcerned.

“It hasn’t had a major effect on us yet,” says Tshifhiwa Tshivhengwa, CEO of the Federated Hospitality Association of South Africa, which represents the hotel industry. “But I worry that the playing field is not level. Our accommodation providers are paying taxes, meeting health and safety regulations, adhering to zoning laws, and we cannot have other providers playing outside those rules.”

So far, Africa remains only a sliver of Airbnb’s total global business, which spans 190 countries and includes some 1.5 million rentals. But Mr. D’Elia says he foresees that demand will continue to rise in coming years, particularly as the site’s name recognition grows among domestic travelers who may never have encountered Airbnb in its original locations.

For his part, Tesfaye, in Ethiopia, hopes he will be able to leverage the service’s growing popularity to help him achieve his ultimate career goal – to become a tour guide.

“This is my training,” he says. “This is just the beginning.”