Business Model of Airbnb

Business model of Airbnb by businessgamut
Business Model of Airbnb

Most people try to find a Home even when they are away from home!

If you also do that, Airbnb is the goto app for you while you plan your next travel to another city.

Who does not know about Airbnb, right! It is one of the most talked-about companies in today’s world. Let us learn something more about the living space rental company. We are bringing you, the business model of Airbnb.

So, First thing first, how did Airbnb start?

The two roomies Brian CheskyJoe Gebbia and the Techie Nathan Blecharczyk started Airbnb in San Fransisco in the year 2007.

Well! They were finding it difficult to pay their rent, so they rented out the extra airbed available in the room and rest is history.

Where are they now?

  • Airbnb is present in more than 191 countries and has footprints in 100k+ cities
  • On average, More than 2Million people use Airbnb every night
  • The total guest count has crossed 500Million
  • As per BusinessInsider, Airbnb is valued at $38bn
  • Prominent Investors: Sequoia Capital, Tigar Global, K3, G Squared and many more

Presence of Airbnb by business gamut
Presence of Airbnb

Let’s see how the business of Airbnb runs.

First of all, Airbnb is a platform which allows two parties to participate. The first is the one with the property(Host), and the other is the Guest(renters).

Customer Segments

The Hosts
  • The urban people having extra space or beds in their home
  • The riches who have multiple houses and vacation homes located outside of the city
  • Hotels
  • Experience and Adventure clubs
The Renters
  • People who want temporary but safe homestay in another city
  • Those who like to meet new people
  • Who looks forward to gelling in with the new culture
  • Those who want to stay in hotels
  • People going on vacation

Value Proposition

For Hosts
  • To rent their property hasslefree, for a short duration, as well as for a long duration(Convenience, Accessibility)
  • Earn by sharing the spare beds in the apartment/room (Safely)
  • Meet new people and be part of the Airbnb community
For Renters
  • Get the best place to live in a new city quickly (Convenience, Accessibility)
  • Check out multiple options which suit them (Airbnb recommended)
  • Be part of Experience and Adventure clubs

Channels used for communication

  • The Website, online support
  • iOS and Android App
  • Online Advertisements
  • 24×7 Support

Customer Relationship

  • Mostly Self Service
  • Personal assistance as and when required
  • Online Communities

Revenue Streams

  • Guests(renters) pay a service fee, between 6 to 12 %
  • A transaction processing fee of 3% is charged to the host
Revenue streams of Airbnb by businessgamut, Business gamut,
Revenue Streams

Key Resources

  • The Platform and infrastructure
  • The Customers, and the community
  • The Brand Equity
  • Intimate Customer knowledge

Key Activities

  • Maintainance of Platform
  • Facilitating transactions
  • Security assurance
  • Community connect
  • Marketing and Onboarding of the new hosts

Key Partnerships

Cost Structure

  • Platform maintenance cost
  • HR, Insurance and support activities
  • Marketing and business development cost
  • The marginal cost of adding users is negligible
  • Expanding to new cities is a cost centre
  • Overall it is a Value-driven lowcost structure business

This is it; we hope you have a good understanding of the business model of Airbnb after reading the Business model of Airbnb by Business Gamut.

If you have any query or suggestions, the comment section is open for your valuable insights.
Please read our other blogs on the business model here!

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