Airbnb Revenue Model

Want to start Airbnb Clone with Airbnb’s Revenue Model that has high earning scopes? Check out which are the business model and revenue model of Airbnb and how does it makes money.

While talking about the Airbnb, we must recall its history and know the facts that how it started.

How did Airbnb start?

In 2007, Brian Chesky and Joe Gebbia moved from New York to San Francisco. They started finding troubles while paying rent, due to unemployment, so they started finding new ways to earn. Meanwhile, they have noticed strange activity around them, i.e, all hotel rooms were booked due to a local industrial conference in the city. It was the moment where they found rays of hopes to earn with an innovative concept in the market. The starting concept was only to serve a place with the bed and breakfast to the visitors at $80/night. In the initial stage, Nathan Blecharczky, a Harvard graduate & Technical Architect, joined them as the third founder of Airbnb.

How did they get fundings?

Airbnb Success Timeline

They redesigned their website and again launched in August 2008 with some new features to earn more money. To survive in the beginning, they started selling cereals & earned $30,000. They got their 1st fund from YCombinator of $20,000. Soon after, they decided to move to new york to get big market. In January 2009, they got some new investors with better suggestions and finally, Airbnb gets into traction. They change its concept from sharing spaces to all types of accommodations. From march 2009 they cross the figure of 2500 listings with nearly 10,000 registered users on its site. Rest is all history, Airbnb is available in more than 191 countries and 80,000 cities with more than 150 Million Users as of April 2019.

What does the Business Model of Airbnb include?

Along with partners, activities, resources and customer relations, Airbnb also includes Value propositions and customer segments in its Business Model. Let’s see what does it contains:

  1. Value propositions:On Airbnb’s platform, property owners/ hosts can list their space and earn out of it. Airbnb also provides insurance for the listed properties. Airbnb provides numerous options for travelers to choose a better place at an affordable price and let them stay with the local people to explore more. Rate and review system is provided on both ends, hosts as well as travelers/guests.
  2. Customer Segments:Airbnb’s customer segment mainly has two parts: Hosts and Guests.
    Hosts can lists properties, share experience and can also work as a freelance photographer. They can earn money through renting a property and sharing their experience with travelers. They can also do freelancing photography jobs with Airbnb and click high-quality pictures of properties.
    Guests can book a space for themselves from the listed properties. Filters like location, amenities, rent, space, etc. are available for guests to choose living space at ease. Different payment options are also available.

What are Airbnb Revenue Models?

Airbnb does not charge any kind of property listing fees from hosts neither they charge any searching fees from guests. Airbnb’s business model is designed in such a way that all kinds of monetary transactions and bookings are done on its platform.

Airbnb earns commission in two ways:

  1. Commission from property owners/hosts

On confirm property booking, Airbnb charges 3-5% of commission from hosts/ property owners. Airbnb also charges 20% of service fees from the hosts who share experience on its platform.

  1. Transaction fees from travelers/guests

When traveler books any space, Airbnb charges between 5% to 15% transaction fees.

Where would be Airbnb in the coming years?

Airbnb already has its presence in more than 80K cities, worldwide, and still working to expand their presence. Undoubtedly Airbnb has a bright future as it is already a multi-billionaire company. It is very much successful in changing the mindset of people from hotel bookings to space booking or sharing a space for living. Airbnb has shown much healthy growth throughout its journey and expected to grow more. Worldwide revenue of Airbnb is expected to reach the US $436.9Billion by 2022.

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