Did you know that Airbnb started as a simple platform to offer mattresses and home-made breakfast? Today, it has revolutionized the way people travel.
Airbnb is an American online marketplace that connects travelers with those local inhabitants of a place who want to rent their property. The travelers get two benefits: an affordable place to stay at and the chance to get a brush with a place’s culture.
To get an idea of the company’s services penetration, get this: the platform has over 4,500,000 listings in over 65,000 cities in 191 countries. What’s more? Airbnb offers the widest variety of unique spaces globally for everyone at all price points.
Founded on August 1, 2008, the company grew as a tech masterpiece in a short time span. Having received massive funding, it is now a part of the billion dollar club.
Besides, it is now the world’s most loved hospitality brand. That is because Airbnb‘s business model is unique, profitable, and adapts to the customer needs.
Airbnb’s key resources are people. In other words, it is a people-centric brand. By people, we mean its employees and its clients. This has enabled the stakeholders to grow the brand incredibly fast at zero marginal cost.
All Airbnb hosts ensure that the guests do not feel like strangers at the new place. They guide the guests about places to visit in the area, the cuisines to try, etc.
As such, they ensure that the guests no longer feel like guests by the time they leave the host’s abode. Quality services define Airbnb.
The Airbnb business model operates on the demand (for the hosts) and supply (to the customers) chain system.
Airbnb envisions making travelers feel that they belong to the place they visit. In this endeavor, they have added a new product to their business model – Airbnbmag.
It is more than just an average guidebook. Costing $15, the magazine is a result of partnership between Airbnb and Hearst.
The magazine is designed to bypass the tourist stomping grounds & help the travelers uncover a place through the eyes of a local.
Airbnb’s business model also includes business-ready homes that fulfill certain requirements for home amenities, type, check-in, responsiveness, reviews, & host commitment.
This feature is specifically designed for travel managers of the companies to provide better transparency & more accurate reporting for their firm.
Three main costs involve Airbnb’s room & board structure:
A monthly salary is paid to every employee. Other amounts are also paid as part of the salary.
As mentioned earlier, the Airbnb team has hired freelance photographers. This they’ve done so that prospects look only at the best-quality photos on the platform.
A decided amount is paid to the photographers for this service.
The business costs of setting up the websites, servers, etc., are typically paid by the firm that booked you through Airbnb. Besides financial costs, the other expenses include monthly electric bills & other small rent.
In 2019, Airbnb divided its fee model into two parts: a host-only fee and a shared Airbnb host and Airbnb guest fee.
Airbnb has multiple options to host you on your stay.
Here, the guests can choose from a number of living options:
In such a setting, you may live in a house with others but have your own bedroom. A host renting out one room of their home must provide information about the house rules, the number of other home occupants, & the shared spaces.
Under this option, no part of the living space is shared with other guests. Guests who book this kind of stay expect privacy. However, there may still be a shared outdoor space.
This is a good option for travelers on a budget. In this setting, a guest may sleep in one room with two or three beds open to other travelers.
While booking, you can avail the instant book facility. Through it, you can book a host’s property without going through an approval process.
Airbnb also offers unique stays; you can stay in a non-traditional space like a boat or a yurt.
Airbnb for Work
This is available to companies looking to plan employee trips. Hosts with good reviews, workstations, quality WiFi, and other facilities are likely to show up on Airbnb for Work.
Anyone can access these properties by toggling to the “work trip” section of the company website. Properties located near metro or city centers are Airbnb for Work hotspots.
These properties are for guests who want top-of-the-class living experiences. Besides high-quality accommodations, guests want the vacation rental to have activities & amenities.
These homes go through a rigorous verification process.
Airbnb offers free listings to the property owners. Travelers browse the various properties in a specific location as per their budget & requirements.
The bookings & monetary transactions are carried out on the Airbnb platform.
The company gets its revenue share from these transactions through two sources:
Airbnb deducts a flat 10% commission from hosts for every booking done via the platform. Hosts also have to pay a 3% fee for the processing of the payments of guests.
About 6 to 12% of the booking amount is set as service fee by the company for travelers for every confirmed booking. This fee is non-refundable.
Airbnb states that if booking in large numbers, people can save money on booking fees.
Based on the area’s tax laws, users are also charged a Value Added Tax. It is calculated on the final value of goods & services.
The tax laws vary across countries. So, the company does not charge VAT for every booking. Further, guests who pay in a different currency than the host has chosen are subject to changing exchange rates determined by Airbnb.
Hosts are charged VAT based on the income earned from various bookings.
Want to build your own P2P marketplace like Airbnb? Talk to our expert team of professionals at Code Brew Labs.July 6, 2022