It would be interesting to learn about the business model of Airbnb – one of the largest community-driven hospitality companies. Established in the year August 2008, Airbnb functions with the mission of creating a world where anyone belongs to anywhere.
The business model of Airbnb offers homes and experiences around the world, so you can have a marketplace to discover, list, and book unique places and experiences.
In this post, we will be diving deep into the world of Airbnb and understand its business model, so we can gauge how it functions, offers services, and channelizes its revenues in a profit-driven manner.
Let us start unravelling the journey of Airbnb here and now.
Introduction to the Business Model of Airbnb (Air-b-n-b)
Did you know that Airbnb started as a company that would provide mattresses to the people and also provide the breakfast items as well?
However, the company soon went on to provide the means to travel for the company.
Airbnb is something that has an efficient and community-oriented business model for those who want to know about it. Not only is the business model unique, but it is a pretty profitable means as well.
Not just that but it has risen to such a level that it is now known to be one of the most desirable and loved options for facilitating bookings and financial transactions to listing and booking a space in an efficient and equally convenient fashion.
The hospitality brand is something that has grown to be quite popular amongst the people and hence is known to everyone.
Airbnb offers a marketplace where people can rent out their homes to the guests that are looking for accommodations in that location.
Hosts can make income from their property while guests can get inexpensive accommodations with ease.
What Exactly Is Airbnb?
Airbnb stands for Air –bed, and breakfast.
To know all about the business model of Airbnb, you need to have an understanding of the company for sure. This is an online marketplace which works for both sides of the web. The travellers can easily connect with the local hosts of the company in the best way.
The inception of the Business Model of Airbnb
The founders (Brian Chesky, Joe Gebbia, Nathan Blecharczyk) of the company came with the idea of it because they weren’t able to afford the basic expenses such as rent or other expenses and now it has turned into a giant of a business venture for the people.
The website was pretty simple in the beginning, and it just offered the people with some mattresses and home-made items for breakfast nearby. However, with the pouring in of more and more people, there is no doubt that it rose to the strands of publicity in the best way.
The website money grew very much, and they experimented with a lot of other things such as the cereal boxes and so much more. Also, there were some images of the rented location provided on the website as well.
Now, when we look at the growth of the company, there is no doubt that you will be amazed by the result.
Contemporary Global Presence of Airbnb
Airbnb is headquartered at 888 Brannan Street, in San Francisco, California.
There are about over 65,000 cities in 191 countries that have the branches of the Airbnb in the best way.
It enjoys 4,500,000 listings around the world.
Revenue- $2.6+ billion
Operating income- $450+ million
Net income- Increase $93+ million
Number of employees- 12,736 (2019)
Seeing such an immense presence around the world, there is no doubt about the fact that you will be pretty much impressed with the things we have to say in here. Let us now deep dive into the world of Airbnb and understand key idiosyncrasies-
Deciphering the Business Model of Airbnb
The business model, which is used for the Airbnb business is the one which is known as the Aggregator Business Model in the best way.
This is not really a linear business model which is present in the other companies such as Hilton and Marriott and so much more. The traditional businesses with the hotel type have to make sure that they are investing more and more millions on the building as well as maintaining all the amazing properties of the website as well.
The key resources which are provided for the Airbnb are all for the people, and hence they don’t have to actually do all of that in order to make sure that they have the best results for sure. So, that is one of the main reasons why the business can grow at an incredible rate and that too at an affordable cost too.
The biggest asset for the Airbnb business model is considering the human being as the capital and opting for Human Capital Management. There is simply not a single speck of doubt about the fact that it is going to be one of the best things for the companies who want to have the best ideas.
Working of Airbnb Business Model in 3 Simple Steps
The business model of Airbnb revolves around the framework three simple steps:
1) Hosts who are ready to rent out their available space
2) Travellers who are ready to book the listed available space that suits their inclinations
3) Freelance photographers go to the major cities to click HR photographs of the property
So, all this begins when people list all their favorite spaces which are available on the amazing platform and that too for some extra money. This will be the rent that they get from the properties that they have on the listings.
With the Airbnb platform, the travellers will also be able to easily connect with all the bookings of home-stays as well as the local hosts too. So, they don’t have to spend much money on the process, and they have a pretty free lifestyle for sure. So, there is no doubt about the fact that this business model is going to be one of the best things for the company.
There are some personal profiles which are provided as well as some of the best and the most amazing places to stay. They don’t have to spend the money on expensive hotels as well. There is a free lifestyle that people can have in the best way.
Not just that, but people can easily live like the locals and have all the amazing benefits as well.
That is not it because the hosts have some sort of benefits from the amazing website as well. They will be able to rent out the spaces. This is something that can be a great help when it comes to maintaining a reputation as well as the trust of the company for sure.
Not just the hosts and the travellers, but the Airbnb business model is also able to help all the amazing freelance photographers that have a profile there. You will be able to share your pictures from the world.
Also, the freelancers can easily go to a proper property and will have the HD photographs of the amazing properties as well. These are the amazing HD photographs which will be able to improve to click-rate of the photographs in the best way.
How Is Airbnb Able To Make Money?
Airbnb lets the property owners meet the people with the help of the free listings that are provided on the website in the best way.
Travellers will also be able to view all the amazing properties in the best way. All they have to do is find out the location, and they will be able to find the places according to the budget as well as the requirements that they have for sure.
Also, the momentary and the booking transactions are always carried out with the help of the platform of Airbnb, and people have the best results as well. Apart from that, a share of the revenue is provided to the company with the help of the different sources that it has.
#1. Commissions from the Hosts
There are some of the commissions that are provided to the company with the help of the owners and the hosts. The company collects the 10% commission whenever there is a booking done from the people with the help of the hosts that they have for sure.
#2. Commissions from the Guests
There is no doubt about the fact that the travellers also have to pay a proper transaction fee to the people to make sure that their bookings are confirmed without any hassle for sure.
This is the payment that they have to pay to make sure that the payment is processed in the best way. This would be around 3% of the booking amount
However, by opting for the services of Airbnb, there are some other ways in which people will be able to save a lot of money as well. There are some tax laws which are present in the areas as well.
The users have to pay the VAT according to the tax laws of the area. So, this is one of the best ways to make sure that people can save some money on the Airbnb platform.
With the Airbnb Company, the people will be able to feel that they belong somewhere and that is one of the new visions why the company has managed to provide new and amazing products and services for the people out there.
There is also a magazine for the company, which is also a pretty important contributing factor, and that is something that helps the people in understanding all about the business models as well.
So, there is simply not a single speck of doubt that you will be able to have all the benefits that are essential with the company of Airbnb.
How Airbnb gets Travelers and Hosts?
Now you must be thinking about how Airbnb reaches out to its customers. Then the answer is quite simple, just through some of the most common means of today’s times and they are-
- Word of Mouth
- Promotion Offers
- Social Media
- Digital Marketing
- Online Advertising and Social Media Ads
- Affiliate Marketing
- Refer and Earn Offers, etc.
Wrapping it up!
So, these are some of the things that you need to know about the Airbnb business model.
This is a company that has one of the best business models for sure, and we are here to assure you that you will have a lot of information if you follow this particular business model in the best way.
We hope that this article is very informative for you when it comes to an understanding all that you need to about the business model of Airbnb.