Airbnb goes mainstream with Rio Olympic contract

RIO DE JANEIRO (Reuters) - With an official contract to provide rooms for the 2016 Olympic Games in Rio de Janeiro, online home-rental marketplace Airbnb Inc is creating a model to solve accommodation problems at mega-events, co-founder Joe Gebbia said on Friday.

The company, one of Silicon Valley’s most successful start-ups since it was founded five years ago by a trio of graduates, will provide at least 20,000 rooms during the Olympic Games. Gebbia said he hoped to make that 25,000 or 30,000 rooms by 2016.

“We help cities to expand their offering and make better use of the resources they already have,” Gebbia said in an interview in Rio after announcing the partnership.

In Airbnb, a site where home owners rent out properties on a temporary basis, Olympic organizers have found a solution to one of the biggest challenges for Rio: a massive lack of rooms. It also takes some of the sting out of criticism that mega-events force hosts to build hotels for just a few weeks.

Airbnb paid to become an Olympic partner and will be listed as an official accommodation provider with a link on Rio 2016’s ticket-buying webpage.

“When we started (our bid for the Games) the major problem was accommodation ... and we started with faith that we would solve the problem some way or another,” said Sidney Levy, chief executive of the local Olympic organizing committee, noting that Airbnb was a small company then.

Olympic organizers are embracing a trend that is already changing tourism, especially in Brazil. During the soccer World Cup last year more than 100,000 people stayed in Airbnb-listed rooms. Hosts, on average, took in $4,000 during the tournament, which lasted almost a month.

Rio de Janeiro has been one of Airbnb’s fastest growing markets with the room count jumping from 800 in 2011 to 20,000 now. The city has the company’s fourth largest number of listings, behind Paris, New York and London.

As for quality control, Gebbia said Airbnb provides guidelines for new hosts, while reviews help to maintain standards. Renters are protected from fraud as long as they remain within the Airbnb website, he added.

Gebbia dismissed market chatter that Airbnb, one of Silicone Valley’s most talked about start-ups, might be looking to make an initial public offering (IPO).

“It’s not on the cards at all. The focus is on growing the business. That’s the best use of our time right now,” Gebbia said.

Additional reporting by Rodrigo Viga Gaier; Editing by Richard Chang