Airbnb Business Model — What Makes It Unique Among Travellers

When it comes to vacation rental online marketplace, Airbnb is the name of the game. You must have heard this and may have even utilized its service. But, have you ever wondered what makes the company so popular? Yes, you thought it right —business model. The Airbnb business model is the talk of the town and every entrepreneur and startup looks to decode what makes the company so successful and profitable.


So, if you are considering starting your business, then the business model can play a crucial role to achieve your business success.


We have worked it out for you by decoding what business model Airbnb follows and what makes it so profitable and popular.


But first, let’s understand;


What is Airbnb?

Airbnb is a community based online marketplace, offering customers to make an arrangement for their lodging, primarily homestays, or tourism experiences.


How does Airbnb Function?

Airbnb helps travellers home-like travelling experiences by helping you rent a property. Initially, the idea was criticized and did not receive much hype as letting unknown people stay home was not a good idea at all. However, Airbnb successfully changed the dynamics of renting homes. That means the credit goes to the business model that was convincing enough for guests and hosts.


So, let’s come to the crucial points;


Airbnb Business Model

When it comes to the business model, it must be able to create, capture and deliver the value and Airbnb business model is the fine example of it.


Any can say that Airbnb is the customer base company while it captures the trend (mostly that is suitable to its customers) and delivers the value to its customers.


So, let’s discuss the Airbnb business model in detail;

Airbnb business model —customer segment

It was started on the idea of providing homey feel home to travellers by connecting them to those looking for renting out their primary residence to travellers.


Initially, there were some trust issues at the initial stage, though it was fully resolved by resolving the dots. A robust system of identity verification determined the trust issue. Along with identity verification, Airbnb also provides reviews of both guests and hosts to provide clear perspective to both.


The value proposition of Airbnb

Lower prices than traditional hotels and an infinite variety of housing offers are the main driving factors of the company. It allows customers to choose from a range of houses that suits their journey needs, apart from typical hotels. If customers need a room with single, double beds, they can easily find it at cost-effective rates.


Key partners

Even though Airbnb is not a real estate rental company, it connects hosts and guests together, too without spending big bucks behind the operation and real estate costs. The primary vital partners of the company are food delivery service providers and companies, payment partners and customers.


Crucial Activities that Airbnb business model applies

Unlike hotels involved in hospitality management activities, Airbnb’s crucial activity involves lobbying, customer service, and marketing platform maintenance. It needs to market as it connects both parties —hosts and guests together. Importantly, it knows where to market its business —online. Most of its customers are available across social networking sites; therefore, the company promotes its services across online platforms.


Resources that Airbnb applies

updated marketplace business model


Airbnb channels

Of course, Airbnb app and its website are two channels that enable hosts and guests to provide and receive services conveniently. Guests can book their accommodation while hosts can list their home on the sites and allow customers to make reservations.

Customer relationship of Airbnb business model

The Airbnb community is the brainchild of maintaining customer relationships. With the community, the company ensures that guests behave nicely and politely to hosts’ houses. Meanwhile, if Airbnb will compensate for any damages caused by guests, and, that strengthens its ties between hosts and guests.


Simplified cost structure wins the competition battle

Three things that Airbnb spends money behind, they include;

● On marketing its services

● Website and property maintenance

● Fight the legislation


online marketing


maintenance of its website and property


legislation fighting


Revenue generation

If we talk about revenue, Airbnb reached 4.7 billion USD in 2019 with 35 billion U.S. dollars in the same year.


So, does Airbnb make money?

That’s a question everybody wants to know, though the company never reveals it. But, we can help you understand how it makes money.


Airbnb charges 3% from hosts when someone makes reservations using Airbnb websites or its app. Whereas, it charges a massive 5 to 15% from customers based on the type of rooms and horse they look for in particular locations.


Final thoughts

When it comes to the business model, it can differ from business to business and therefore, if you want to start your own business, you may need to go through plenty of resources and get the best ideas out of it. Hope you get what you look for through this article. And, if you are starting your own venture, then we wish you very good luck.

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